Obama works on stimulus budget

WASHINGTON,(AFP)

President Barack Obama will meet Saturday with his economic team to discuss the government’s budgetary priorities as he makes a concerted effort to bolster the flagging US economy.

Obama said on Friday that his economic stimulus plan was “on target” to clear Congress by mid-February. But he faced complaints from Republicans who warned it was too expensive and will not work.

“We are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with, and dealt with rapidly,” Obama said, flanked by Republican and Democratic leaders in the Roosevelt Room of the White House.

Republicans, who say they are being shut out of framing an 825-billion-dollar Democratic version of the stimulus in the House of Representatives, issued their own version of the plan after requesting the meeting with Obama.

The president said he understood there were divisions in Congress and will meet Republicans on Capitol Hill next week, but argued everyone was at least in agreement that something needed to be done fast.

Republican House Majority leader John Boehner left the meeting saying it was productive but was skeptical that some of the spending in the bill would kick-start the crisis-mired economy.

“I’m concerned about the size of the package and I’m concerned about some of the spending that’s in there,” he said.

“How you can spend hundreds of millions of dollars on contraceptives — how does that stimulate the economy?“You can go through a whole host of issues in this bill that has nothing to do with growing jobs in America and helping people keep their jobs,” Boehner added.

Obama said the stimulus plan, which includes tax cuts and a vast infrastructure spending program and is supposed to save or create three to four million jobs, was “on target” to be on his desk by the President’s day recess in mid-February.

White House spokesman Robert Gibbs said Obama was “certainly going to listen to any ideas ... the president will also go to Capitol Hill the beginning of next week to talk to Republican caucuses and solicit their input and their ideas.”

Republicans lack the votes to stall the stimulus package, but the president is hoping for thumping majorities for his first major piece of legislation to both shock the economy into action and bolster his political leverage.

The Republican version of the stimulus plan relies on cutting the lowest individual tax rates from 15 to 10 percent and from 10 to five percent.

It includes tax deductions for small businesses that have been rejected by Democrats in the Senate and a ban on tax increases to pay for new spending, Republican aides said.

The Republican alternative includes a home-buyers credit for those who make a minimum down payment of five percent.Obama set his sights on the economy after the frenetic first two days of his administration that saw him tear down key planks of the “war on terror” and foreign policy of his predecessor, George W. Bush.The president also said that he had been receiving grave news about the state of the economy during his new in-depth daily economic briefing, which he instituted after taking office on Tuesday.

“Frankly, the news has not been good — each day brings I think a greater focus on the problems that we are having not only in terms of job loss but also in terms of some of the instabilities in the financial system,” he said.

Obama also warned that the second half of a 700-billion-dollar finance industry bailout being debated in Congress must contain more accountability than that seen in the first half of the plan used by the Bush administration.He complained that some Wall Street executives from companies that had received public bailout money had recently upgraded offices and private bathrooms, according to press reports.

Obama said Congress must “put in place the kinds of reform elements, oversight, transparency, accountability, that’s going to be required in order for the American people to have confidence in what we’re doing.”

The president was joined at the meeting by House Speaker Nancy Pelosi, Boehner, Senate Majority Leader Harry Reid and Republican Senate Majority Leader Mitch McConnell.

Highlighting the severity of the recession inherited by Obama’s fledgling administration, government data showed Thursday that US jobless claims hit a 26-year high last week and home building fell to half-century lows in December.