News Service from House Harris

US: Obama pitches his plan to reverse economic slide

WASHINGTON, Jan 24 AP - President Barack Obama took to the airwaves on Saturday to promote his economic aid plan by emphasising how it would benefit ordinary Americans: thousands of better schools, lower electricity bills, and health coverage for millions who lose their insurance along with their jobs.

It was the latest appeal from the new president for a massive spending bill designed to inject almost $1 trillion into the economy and fulfill campaign pledges.

As MPs consider an $825 billion plan and Obama woos them with an eye toward a second economic package, he used his first radio and internet address from the White House to update the public about his goals.

"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future," Obama said in a five-minute address.

"In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."

Obama aides have refused to rule out that the administration would seek a second economic recovery plan - even before Congress approves the first - to patch an ailing economy. Some are considering a sequel to assuage members of their own Democratic Party who fret that too little of the money is being spent on infrastructure that would employ their constituents.

"Look, let's get one done, and start seeing that impact on the economy before I get into hypotheticals about what we might do later on in the year," White House press secretary Robert Gibbs said on Friday.

Along with the speech, Obama's economic team released a report designed to outline tangible benefits of the plan and shore up support. Aides said they wanted people to understand exactly what they could expect if Congress supported the proposed legislation.

The United States lost 2.6 million jobs last year, the most in any single year since World War II. Manufacturing is at a 28-year low and even Obama's economists say unemployment could top 10 per cent before the recession ends. One in 10 homeowners is at risk of foreclosure and the dollar continues its slide in value.

That harsh reality has dominated Obama's first days in office. He scheduled a meeting late Saturday morning with his economic team to talk about the proposed stimulus package and the federal budget.

A day earlier, he invited Democratic and Republican leaders to the White House to hear their ideas on the economy. At that visit, he did not share the details he released Saturday.

"We presented President Obama with our ideas to jump start the economy through fast-acting tax relief - not slow-moving government spending programs," House Republican leader John Boehner of Ohio said in the weekly Republican address. "We let families, entrepreneurs, small businesses, and the self-employed keep more of what they earn to encourage investment and create millions of new private-sector jobs."

Boehner said the Republicans would cut taxes for every taxpayer, dropping even the lowest income tax rates. "That's up to an extra $3,200 per family every year - money that can be saved, spent or invested in any way you see fit," Boehner said. He also proposed a tax credit for home purchases, an end of taxation of unemployment benefits and tax incentives for small businesses to invest in new equipment and hire new employees.

"We cannot borrow and spend our way back to prosperity," Boehner said.

Obama also plans to travel to Capitol Hill on Tuesday to meet with Republican leaders, his latest move to bring along his rival party to pass an economic package that has Republican support.

Many of the goals in the speech and report were familiar from Obama's two-year campaign, such as shifting to electronic medical records and investing in preventive health care. Other parts added specifics.

Obama's recovery package aims to:

-double within three years the amount of energy that could be produced from renewable resources. That is an ambitious goal, given the 30 years it took to reach current levels. Advisers say that could power 6 million households.

-upgrade 10,000 schools and improve learning for about 5 million students.

-save $2 billion a year by making federal buildings energy efficient.

-triple the number of undergraduate and graduate fellowships in science.

-tighten security at 90 major ports.

The plan would spend at least 75 per cent of the total cost - or more than $600 billion - within the first 18 months, either through bricks-and-shovels projects favoured by Democrats or tax cuts that Republicans have pushed.

There is heavy emphasis on public works projects, which have lagged as state budgets contracted. Governors have lobbied Obama to help them patch holes in their budgets, drained by sinking tax revenues and increased need for public assistance such as Medicaid health coverage for the poor and children's health insurance. Obama's plan would increase the federal portion of those programs so no state would have to cut any of the 20 million children whose eligibility is now at risk.

Obama's plan would also provide health care coverage for 8.5 million people who lose their insurance when they either lose or shift jobs.

"It's a plan that will save or create 3 to 4 million jobs over the next few years" and recognises "there are millions of Americans trying to find work even as, all around the country, there's so much work to be done," he said.

But Obama cautioned again against expecting instant results: "No one policy or program will solve the challenges we face right now, nor will this crisis recede in a short period of time."

In his first days in office, Obama was also moving to reverse contentious Bush administration policies.

On Friday, he ended the ban on giving federal money to international groups that perform abortions or provide information about it. The memorandum was issued a day after he ordered the closures of the Guantanamo Bay, Cuba, prison and secret overseas CIA prisons, a review of military trials of terror suspects and a ban on torture.

Liberal groups welcomed Obama's decision on the abortion funding ban, while abortion rights foes criticised the president. Obama's action came one day after the 36th anniversary of the Supreme Court's landmark Roe v. Wade ruling that legalised abortion.

Critics have long held that the rule unfairly discriminates against the world's poor by denying US aid to groups that may be involved in abortion but also work on other aspects of reproductive health care and HIV/AIDS, leading to the closure of free and low-cost rural clinics.

Supporters of the ban say that the United States still provides millions of dollars in family planning assistance around the world and that the rule prevents anti-abortion taxpayers from backing something they believe is morally wrong.