Obama faces Republican rancour as economy reels

United States President Barack Obama enters his first full week in office on Monday battling to win over Republicans hostile to his signature plan to haul the US economy out of a paralysing recession.

Obama’s $825-billion stimulus Bill, which is set for debate in Congress this week, has become a litmus test of the new Democratic president’s pledge to drain Washington of partisan rancor.

Before heading to Capitol Hill to lobby for the bill in person on Tuesday, Obama was on Monday hoping to add a crucial name to his Cabinet with the Senate expected to confirm his pick for Treasury secretary, Timothy Geithner.

Praising the former head of the New York Federal Reserve, Vice-President Joseph Biden said on CBS programme ”Face the Nation” on Sunday: ”I think he’ll get a strong bipartisan vote in the Senate.”

Despite criticism of Geithner’s failure to pay some US payroll taxes earlier this decade, the Senate’s finance committee voted last week for his nomination, and the new Treasury boss will immediately have his work cut out.

In his first presidential radio address on Saturday, Obama raised the spectre of double-digit unemployment, a massive erosion of family incomes and an entire generation losing its potential if Congress does not act on the stimulus Bill.

”In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse,” he said, appealing to all to ”act as citizens and not as partisans”.

Republicans lack the votes to defeat the stimulus package, but they could make life difficult for Obama in the Senate through stalling tactics that might push the Bill beyond his target date of mid-February.

In any case, the new president is hoping for big majorities for his first major piece of legislation to both strengthen his political hand and drag the economy out of its longest recession since World War II.

House of Representatives Speaker Nancy Pelosi indicated that her patience with Republican objections was wearing thin.

Vowing to bring the stimulus package to a vote by the full House ”this week,” Pelosi said: ”Because the Republicans don’t vote for it doesn’t mean they didn’t have an opportunity to [speak out].”

Economists, ”from right to left, they have told us that the investments that we make create more jobs than tax cuts,” she told ABC’s ”This Week” programme.

But adamant that deeper tax cuts rather than government spending are the way forward, influential Republicans dug in their heels.

House Minority Leader John Boehner, who was part of a congressional delegation that met Obama at the White House on Friday, remained unconvinced.

”If it’s the plan that I see today, put me down in the ‘no’ column,” he said on NBC’s ”Meet the Press,” insisting that most of his House colleagues would also vote against.

”I just think there’s a lot of slow-moving government spending in this programme that won’t work,” Boehner said, attacking planned spending on states’ family-planning initiatives and on sprucing up Washington’s National Mall.

Pelosi said she made ”no apologies” for including such spending in the stimulus package, drawing a scornful response from Republican Representative Mike Pence of Indiana.

”Bipartisanship should mean more than having the opportunity to vote on Democrat Bills,” he told CNN, touting the Republicans’ alternative of ”fast-acting tax relief for working families and small businesses”.

Pelosi said meanwhile that Obama’s administration may need to stump up more funds to bail out the stricken banking industry beyond the $700-billion now in the works.

But US banks will have to hand over more equity in return for ”some increased investment” from the taxpayer under the Troubled Asset Relief Program (Tarp), she said.

Biden said that after intense criticism of how the Tarp’s first tranche of $350-billion was handled, the second half would be spent more wisely.

Once he is confirmed by the Senate, Geithner ”will then report back to the president and to me as to whether or not he thinks that 350 (billion) is enough,” the vice-president said.

Also on Monday, Obama was expected to issue new regulations, allowing several US states to set tougher car emissions and fuel efficiency standards, US media and congressional officials said.

According to these reports, the presidential directive would grant California and 13 other states the right to regulate tailpipe emissions in a departure from a policy pursued by the Bush administration. — Sapa-AFP

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Jitendra Joshi
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