* Senate vote on stimulus bill expected on Tuesday
* Obama says speed needed to avoid catastrophe
* Geithner signals new requirements for banks
By Jeff Mason
WASHINGTON, Feb 7 President Barack Obama
pounded Republicans on Saturday for policies that fueled the
U.S. economic crisis, while welcoming a Senate deal on his
stimulus bill that ideologically split lawmakers hope to finish
Obama said quick action on the package was imperative to
avoid catastrophe and praised the group of moderate senators
from both political parties for coming up with a compromise.
Senate Democrats agreed late on Friday to trim spending
proposals and support tax cuts in a roughly $800 billion bill.
They rolled back an earlier $937 billion proposal by culling
what critics, mostly Republicans, called billions of dollars in
unwarranted spending. [ID:nN05403943]
Nancy Pelosi, speaker of the House of Representatives,
predicted there would be a finished product by Feb. 16. A
Senate vote is scheduled for Tuesday, one day after Obama gives
his first full news conference as president.
"Democrats and Republicans came together in the Senate and
responded appropriately to the urgency this moment demands,"
Obama said in his weekly radio address.
"In the midst of our greatest economic crisis since the
Great Depression, the American people were hoping that Congress
would begin to confront the great challenges we face. That was,
after all, what last November's election was all about."
Senators continued to spar over the price tag as they
debated the package in a rare Saturday session.
Republican Senator Jeff Sessions said it would cost some
$40 billion a year just to service the additional debt that
resulted from the spending portions of the bill.
"How big is $40 billion? That's the annual road budget, the
annual highway budget for the United States of America. That's
a lot of money," Sessions said.
Senator Barbara Boxer, a Democrat, retorted that
Republicans did not complain about debt from the Iraq war
started by Obama's Republican predecessor, George W. Bush.
Pennsylvania Senator Arlen Specter predicted the bill would
pass the Senate vote with his support and that of at least two
other Republicans -- Susan Collins and Olympia Snowe of Maine.
"If the federal government does not act, there will be
very, very severe effects not only on Wall Street but on Main
Street," he told a news conference in Philadelphia. "I believe
that it (the bill) provides the essentials to do the job."
The new chairman of the Republican National Committee,
Michael Steele, promoted tax cuts and accused Democrats of
seeking to spend too much with the stimulus package.
"Democrats have controlled both branches of government for
less than a month, and you have to wonder if all that power has
gone to their heads," Steele said in the Republican radio
address, adding that families would be helped the most by
keeping more money in their pockets.
Obama showed little patience for Republican arguments and
continued his aggressive posture of recent days, which he has
used to wield the political capital from his Nov. 4 electoral
victory over Republican John McCain.
"We can't expect relief from the tired old theories that,
in eight short years, doubled the national debt, threw our
economy into a tailspin, and led us into this mess in the first
place," Obama said in his radio address.
HELP AND CONDITIONS FOR BANKS
Aside from the stimulus bill, Treasury Secretary Timothy
Geithner is expected to unveil steps on Monday to help U.S.
banks battered by the financial crisis with government
insurance of bad assets, a plan to shift toxic securities off
bank balance sheets and money to modify homeowner mortgages.
Estimates of the banking system's potential capital needs
top $1 trillion, far above the $350 billion the government has
left in the Troubled Asset Relief Program set up in October.
Geithner told lawmakers on Saturday financial institutions
that get government help will have to make loan modifications
and meet other new standards, Democratic sources said.
But some experts cautioned that the new plan for banks will
be difficult to get through Congress, tough to implement and
may ultimately fail.
More evidence that the United States is in its worst
economic crisis in more than 70 years came in Friday's report
that nearly 600,000 jobs were lost in January. [ID:nN06435445]
Once the Senate passes the stimulus bill, differences with
the version approved by the House will have to be ironed out.
Pelosi acknowledged potential resistance in the House to
parts of the Senate bill, especially the scaling back of some
expanded aid to states, but was confident of passage of the
stimulus measures by mid-February.
Obama said the legislation deserved scrutiny but that speed
"The scale and scope of this plan is right, and the time
for action is now," Obama said in the radio address. "If we
don't move swiftly to put this plan in motion, our economic
crisis could become a national catastrophe."
(Additional reporting by Rick Cowan, Jon Hurdle and Susan
Cornwell; Editing by John O'Callaghan)