Obama, Congress leaders to meet Monday on economy

By Donna Smith

WASHINGTON (Reuters) - Both President-elect Barack Obama and Vice President-elect Joe Biden will huddle with Democratic and Republican congressional leaders on Monday to try to advance a huge economic stimulus bill that Obama hopes can be enacted quickly, despite Republican reservations.

Leadership aides in Congress said the meeting is set to begin around 3 p.m. EST on Monday.

But in the runup to the meeting, Republicans on Capitol Hill were warning their Democratic counterparts that legislation to improve the worsening U.S. economy should not spend too much money on government-funded projects and should not be rushed through Congress without adequate review.

Democrats have been hoping to deliver the plan -- which could cost $675 billion to $775 billion or more -- to Obama on January 20, the day he becomes president, or shortly thereafter.

The newly elected Congress is to be sworn in on Tuesday -- two weeks before Obama. Hearings could push a final package well into February.

The Democrats, who have a majority in Congress, want the economic stimulus to include tax relief for the middle class and spending on schools, roads and other infrastructure. States, which increasingly are having difficulties paying health care costs for the poor, also would get federal money.

But Republicans have voiced concern about possible waste and say the tab could reach $1 trillion.

"I am concerned by media reports that suggest the Democrats' emerging proposal may cost taxpayers up to 1 trillion in new government spending, with little debate or public scrutiny of the still-unseen legislation," House Republican Leader John Boehner said in a statement on Friday.

"Let's be clear: it is essential that this legislation be debated in a fair, open, and honest way," he said.

At least five Democratic governors say $1 trillion is necessary. The five, from New York, New Jersey, Massachusetts, Ohio and Wisconsin, said on a conference call on Friday they would like the package to include $250 billion for education funding, $250 billion for social services such as the Medicaid health insurance program, and $500 billion for infrastructure.

DEFINING INFRASTRUCTURE

Massachusetts Gov. Deval Patrick said infrastructure should be defined to include public housing, the power grid, and electronic medical records as well as roads and bridges.

Although the Democrats increased their majority in the 100-member Senate in the November election, they still need Republican support to advance legislation.

A Senate Republican aide, who asked not to be identified, said Democrats could gain stronger, bipartisan support with an economic stimulus measure costing less -- about $500 billion.

Global financial markets rallied on Friday, partly due to hope that a stimulus bill will move through Congress soon.