Monday February 16, 02:13 AM
Obama targets housing after stimulus victory
By Jitendra Joshi
WASHINGTON, (AFP) - President Barack Obama will head west this week bidding to cure America's epidemic of home foreclosures after his gargantuan economic stimulus plan finally cleared Congress.
Aides to the president -- who Saturday called the 787-billion-dollar package of investment and tax cuts "a major milestone on our road to recovery" -- said he would outline his housing plan in Phoenix, Arizona on Wednesday.
The day before in Denver, Colorado, Obama will sign the stimulus package into law, setting the seal on the first major legislative triumph of his presidency just under a month after he took office.
"I think it's safe to say that things have not yet bottomed out," White House spokesman Robert Gibbs told CNN Sunday.
But US states will start getting the stimulus money "relatively quickly," he said, "so they don't have to lay off police officers or firefighters or teachers" and can begin to create alternative energy jobs.
Meanwhile, Gibbs insisted on CBS (NYSE: RBV - news) that Obama would "continue to reach out to Republicans, and he's hopeful that Republicans will start to reach back."
But Republicans, chafing at the largest government spending package in US history, signaled more fights ahead as Obama prepared to take on the stricken housing and financial markets following a weekend break in Chicago.
Senator Lindsey Graham cited estimates that half a trillion dollars could be needed to fix the property sector, whose tailspin from boom to bust has crippled much of Wall Street and ignited the broader economic crisis.
After the first round of a banking bailout and now the stimulus bill, "it makes it harder for everybody here to go back to the public and say, 'Please give us more money, because we seem irresponsible,'" he told ABC News.
But senior Obama adviser David Axelrod said Republican complaints smacked of hypocrisy.
"For eight years when we were doubling the national debt, I didn't hear many of these people moralizing about spending," he said on NBC, noting that barely any Republicans opposed president George W. Bush's Iraq war expenditure.
Obama's stimulus package won just enough support from Republican senators to clear the Senate late Friday after a party-line vote in the House of Representatives.
Next up is the housing market, after officials said Friday that two US banks -- JPMorgan Chase and Citigroup (NYSE: C - news) -- and mortgage finance giants Fannie Mae (NYSE: FNM - news) and Freddie Mac (NYSE: FRE - news) had agreed to suspend home foreclosures.
Along with moratoriums, other ideas in the works would help homeowners write down their mortgage repayments to about one-third of their salary.
While refusing to go into details, Axelrod said: "We want to do what we can to help the American people and to solve this problem, which is at the heart of our financial challenges."
Treasury Secretary Timothy Geithner last week unveiled a plan that could use as much as 2.5 trillion dollars to aid banks, unfreeze consumer credit markets and stem the home mortgage crisis.
But with nearly 10,000 families a day reportedly losing their homes, only a sketchy public-private investment fund was cited under Geithner's plan to buy up mortgage-backed securities held by banks.
And with just 50 billion dollars so far devoted by Geithner for foreclosure relief, many believe Obama will come back to Congress for more funds after this week's announcement in the home repossession blackspot of Phoenix.
"I don't think it will be enough," Democrat Barney Frank, who chairs the House committee on financial services, told CBS.
But, he added, Obama has "a good set of plans coming forward to begin to reduce foreclosures."
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