Obama signs stimulus into law, housing moves next

By Jeff Mason and Caren Bohan

DENVER (Reuters) - President Barack Obama signed a $787 billion economic stimulus bill into law on Tuesday as global markets plunged on fears the recession would deepen despite government rescue plans around the world.

Obama, who has described the package as one part of a broad plan to solve U.S. economic ills, was expected to lay out a strategy on Wednesday to stem home foreclosures and address the housing crisis -- one of the chief causes of the financial sector meltdown.

Meanwhile General Motors Corp and Chrysler LLC, pushed to the brink by the financial storm, finished restructuring plans to be submitted to the Obama administration as part of efforts to keep America's biggest carmakers afloat.

U.S. stocks slid, sending Wall Street near lows set in November. Other global markets also sank on fears that government action will not be enough to pull the United States out of recession and avert a deepening worldwide financial crisis.

Obama, whose plan to boost the banking industry was also met with falling stock markets last week, sounded a cautious but confident note in his remarks before signing the bill.

"I don't want to pretend that today marks the end of our economic problems, nor does it constitute all of what we're going to have to do to turn our economy around," he said.

"But today does mark the beginning of the end."

The president has staked his political reputation on the package, a mixture of tax cuts and spending projects, saying its success will determine his success as president.

The White House has said it will take about a month for the money to start flowing. Some economists, however, believe the measures will come too late to have an effect in 2009, when many forecasters predict full-year output will contract.

Press Secretary Robert Gibbs indicated that another stimulus bill might be required at a later date, though he said the administration was not working on one now.

"There are no particular plans at this point for a second stimulus package," he told reporters on board Air Force One, adding, however, that he "wouldn't foreclose it."

The focus on Wednesday will turn swiftly to Obama's housing plans, which will aim to reduce foreclosure rates and help property owners at risk of losing their homes. That plan, unlike the bailout of big money banks, is likely to be popular with average Americans.

STATES REELING, BITTER DEBATE

Some U.S. states are reeling with their own budget problems.

Lawmakers in California, the nation's most populous state, failed to pass a $40 billion budget and state officials began informing up to 20,000 state employees that they could lose their jobs. Kansas is also running out of cash and its governor said it might halt tax refunds.