February 17, 2009 / 8:33 PM / 10 years ago

WRAPUP 3-Obama signs stimulus into law, housing moves next

* Obama to announce housing measures on Wednesday

* Stocks down on fears of deeper recession

* Auto restructuring plans due

By Jeff Mason and Caren Bohan

DENVER, Feb 17 (Reuters) - U.S. 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 (GM.N) 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. [ID:nLH623622]

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. [ID:nN17407183]

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. [ID:nN17365637]

Obama’s stimulus package includes working class tax cuts, infrastructure spending, help for the poor and unemployed and investment in alternative energy.

Obama has predicted that it will save or create more than 3.5 million jobs over the next two years.

At a job networking event in Scottsdale, Arizona, Don Yows, a sales manager who has been unemployed since December, wondered when the package would kick in.

“How long will it take for the economic stimulus package to really start generating jobs?” he said. “Is it 30 days, is it 60 days, is it 90 days, is it six months?”

Though a major success for Obama’s young presidency, the stimulus debate in Congress laid bare bitter divisions over how to boost an economy suffering a rising jobless rate of 7.6 percent and a banking crisis that has nearly frozen lending.

Only three Republicans voted for the measure in the 100-seat Senate, and no Republicans broke ranks to support it the House, arguing it had too much spending and not enough tax breaks. The final plan was split into 36 percent for tax cuts and 64 percent in spending and other provisions.

Republicans lambasted the package for being too expensive and criticized Democrats for pushing it through.

“Congressional Democrats worked behind closed doors to write legislation that will fall short of creating the promised new jobs, but will guarantee a larger debt burden on our children and grandchildren,” Republican National Committee (RNC) Chairman Michael Steele said in a statement.

Obama said the plan’s focus on infrastructure, health care and renewable energy would create jobs while making up for lost time in areas where the country had fallen behind.

“We’re putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long ... work that will begin real and lasting change for generations to come,” he said. (additional reporting by Tim Gaynor; editing by David Storey and Vicki Allen)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below