Obama Economic Chief: House, Senate Stimulus Chasm Still Means Trouble

One of President Barack Obama‘s top economic advisers forecast Sunday a difficult struggle with Congress over Senate cuts of $40 billion for state and local governments from the administration’s massive spending and tax cut package to stimulate the failing economy.

The $827 billion Senate version of the plan — designed to bring the economy out of the worst downward spiral since the Great Depression — was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure.

By STEVEN R. HURST, Associated Press Writer

Lawmakers were likely to begin reconciling those differences later this week, with Obama still pressing to have the stimulus measure on his desk for signing by mid-month.

But without the infusion of federal money to state and local governments, the country may still face “a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs,” said Lawrence Summers, chairman of the White House National Economic Council.

The Senate measure was pared back from more than $900 billion to entice a handful of necessary Republican votes in support of the legislation. The House bill passed without a single Republican vote in its favor, a rebuke to Obama’s vow to take the debilitating partisan heat out of Washington politics.

Republican Sen. John Cornyn of Texas said he expects Obama’s stimulus package to pass the Senate, but he warned that it could damage the U.S. economy in the future.

A stark critic of Obama’s approach to repairing the badly damaged economy, Cornyn said he believes passing the measure with minimal Republican support must be a major disappointment to Obama. He argued that the president’s stimulus package is loaded with pet Democratic spending projects and is “just spending as far as the eye can see.”

Republicans claim that Democrats have failed to learn the lessons of history, arguing that an Obama-style stimulus did not work in the 1930s, when President Franklin D. Roosevelt faced similar economic upheaval.

Read the rest:
http://news.yahoo.com/s/ap/20090208/ap_o
n_go_pr_wh/obama_economy

One Response to “Obama Economic Chief: House, Senate Stimulus Chasm Still Means Trouble”

  1. Suggestions4Obama.com Says:

    I do not understand why people are having diffculty understanding. The number of unemployed people (11.6 million) and the unemployment rate (7.6 percent) rose in January. Over the past 12 months, the number of unemployed persons has increased by 4.1 million. The Department of Labor reported today that nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent. Payroll employment has declined by 3.6 million since the start of the recession in December 2007, …. most of this mess happening only in past three months! And some wonder Obama is pushing so hard for a stimulus package. Is the Herbert Hoover approach, do nothing, all we need, leading us to a twelve year depression ??

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