Pelosi warns stimulus must pass by mid-February

By John Crawley and Lisa Lambert

WASHINGTON (Reuters) - Congress must approve a sweeping economic stimulus package by mid-February or the United States will face a deepening crisis and more job losses, House Speaker Nancy Pelosi said on Wednesday.

Democrats wanted to present President-elect Barack Obama with a plan on January 20, his first day in office, but the target has slipped with political realities taking hold.

At a Democratic-sponsored forum on suggestions for a recovery plan, Pelosi said lawmakers must ensure any response has a rapid and meaningful impact on the reeling economy.

"Failure to act quickly will only lead to more job losses and more economic pain for America," Pelosi said.

She did not discuss a figure, but Democrats have talked about spending roughly $775 billion over two years. The focus would be on public works projects, aid to cash-starved state governments and more help to the poor and unemployed who have been hit hard by the year-long recession.

Obama plans to propose $310 billion in tax cuts for the middle class and businesses as part of the package.

Some governors and economists are pushing for a larger plan of around $1 trillion, while many Republicans want a more modest bill, possibly in the range of $500 billion.

Obama has been framing a package around discussions with congressional leaders, including Republicans.

"We expect that it will be on the high end of our estimates, but will not be as high as some economists have recommended because of the constraints and concerns we have about the existing deficit," Obama told a news conference.

TAX CUTS VS SPENDING

Sen. Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee, told reporters that he would support a larger stimulus if certain measures were included.

Gregg expressed concern about the potential influence of special interests and conservatives generally favor a stimulus heavier on tax cuts than spending.

Few details about the plan have trickled out since Congress returned to Washington this week, but Pelosi made it clear that it will be sweeping and innovative.

"This is not your grandfather's public works bill," Pelosi said, referring to the brick-and-mortar job creation programs during the Great Depression of the 1930s.

Minnesota Rep. James Oberstar, the Democratic chairman of the Transportation Committee, has said classic public works infrastructure spending could total $85 billion. That would include $32 billion for highways and bridges.