WASHINGTON President Barack Obama pitched his $825 billion economic stimulus plan to business leaders on Wednesday, as the House of Representatives debated the legislation it was expected to pass later in the day.
Amid attacks from Republicans in Congress that Obama and his fellow Democrats have composed a package too flawed to save the stumbling economy, the new president got a boost from corporate heads he met with at the White House.
"The message has to be that the situation is dire," said David Cote, chief executive of Honeywell. "It needs to get done fast," he added, referring to the Democrats' economic stimulus plan. "Everybody is being touched by this."
Obama said the 13 CEOs were "on the front lines in seeing enormous problems in our economy right now." It is important "that we act and act swiftly in order to get this economy back on track," he said, and predicted success in winning passage of one of the most expensive single bills ever considered by Congress.
But it is widely acknowledged that righting an economy that has been in recession for more than a year will be difficult.
On Friday, the government is due to release an estimate of economic performance that economists expect will show the economy contracted at an annual rate of 5.4 percent last year. That would put the U.S. economy closer to the 6.4 percent contraction in 1931, which was followed by 13 percent in 1932, during the Great Depression.
Other executives who met with Obama included the head of Corning Inc, which this week announced 4,900 job cuts, and Xerox Corp., which cut 3,000 late last year.
The House debated legislation written by Obama's fellow Democrats that would spend $825 billion over the next few years with a combination of emergency spending and tax cuts to create and save up to 4 million jobs.
"This $825 billion package is not too large ... in fact it's probably smaller than it ought to be," House Appropriations Committee Chairman David Obey said, noting the horrible shape of the U.S. economy.
Most House Republicans planned to oppose the legislation. and thus cast votes against some of the Democrats' pet projects such as new money for education and alternative energy.
They will offer a competing plan, which is expected to fail, that would scrap the Democrats' hundreds of billions of dollars in spending to jump-start the economy and instead call for a series of tax cuts.
Representative David Dreier, a conservative Republican from California, said the "growth-oriented tax cuts" that members of his party are seeking would be better at jump-starting the economy.
Once the House votes, action moves to the Senate, which is considering a more expensive bill. Its price tag is now about $887 billion because it will include a one-year fix to insulate middle-class taxpayers from the Alternative Minimum Tax, which originally was aimed at the wealthy but is affecting a growing number of middle-class taxpayers because of inflation.
Democrats want to send Obama a bill he can sign into law by mid-February. The bill could change by then, especially if Obama strives to get Republican support.
U.S. stocks rose on Wednesday on optimism that the new administration was moving quickly to stabilize banking and hopes for a stimulus package soon.
The bill the House is debating combines $275 billion in temporary tax cuts to spur spending and business investment, along with hundreds of billions of dollars for job creating investment projects, health industry improvements, expanded aid for the poor and unemployed, and improving education.
While Obama wants a strong bipartisan vote on final passage, that will depend on whether Republicans think they have gotten at least some of what they want, such as more business tax breaks in the bill.
(Additional reporting by Thomas Ferraro; editing by Patricia Zengerle and David Wiessler)