Friday January 23, 04:28 PM
Obama warns crisis must be dealt with rapidly
By Stephen Collinson
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WASHINGTON (AFP) - President Barack Obama warned Friday the economic crisis may be unprecedented, and must be dealt with rapidly, as he nudged Congress to meet a mid-February deadline to pass a huge stimulus bill.
But Republicans, opposed to a 825-billion-dollar Democratic version of the stimulus went to the White House with their own proposals, containing cuts in individual taxes and offering tax incentives to revive the housing market.
"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.
Obama turned his public gaze on the economy after the frenetic first two days of his administration, which have seen him tear down key planks of the Bush administration's "war on terror" and foreign policy.
The president also said that he had been receiving grave news about the state of the economy on 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.
The Republican version of the stimulus plan relies on cutting the lowest individual tax rates from 15 percent to 10 percent and from 10 percent to five percent.
It includes tax deductions for small businesses -- which have been rejected by Democrats in the Senate and a ban on tax increases to pay for new spending, Republican aides said.
It includes a home-buyers credit for those who make a minimum down payment of five percent.
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 at recent press reports which revealed some Wall Street executives, from companies that had received public bailout money, had recently upgraded offices and private bathrooms.
He 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."
Obama said he realized it was a "heavy lift" for Congress to pass an 800-billion-dollar economic stimulus package quickly but said it appeared lawmakers were on target to send it to his desk by mid-February.
The president was flanked at the meeting by House of Representatives speaker Nancy Pelosi, top House Republican John Boehner, Senate Majority leader Harry Reid and Republican Senate majority leader Mitch McConnell.
The president said he recognized that divisions over how to rescue the economy remained in Congress and between his administration and lawmakers.
He has been hoping to secure a large bipartisan vote for the stimulus package in Congress to register a major political success in the first symbolic 100 Days of his administration.
But growing disquiet among Republicans about the size and shape of the package has called those hopes into doubt.
Obama's comments came a day after the US Treasury secretary-designate Timothy Geithner vowed to revamp the country's financial system to make it stronger and more resilient against market turmoil.
Geithner told members of the Senate finance committee that his "first priority" in improving the US regulatory structure was beefing up the financial system's capacity to withstand shocks.
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.
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