Obama: Congress must act boldly and now on economy

WASHINGTON -- President-elect Barack Obama implored Congress on Thursday to "act boldly and act now" to fix an economy growing weaker. Leading lawmakers set an informal goal of mid-February for enacting tax cuts and government spending that could cost as much as $1 trillion.

Democrats complained openly about the incoming administration's proposed tax cuts and Republicans warned against excessive new spending, both parties letting Obama know they intend to place their own stamp on the economic recovery effort.

A call for a $3,000 tax break for job creation drew particular criticism in a private meeting, and numerous lawmakers said Obama had not ticketed enough of his tax proposal for energy projects.

But there was little or no dispute about the need for action, and Obama's remarks coincided with a pair of government reports showing fresh weakness in an economy already in crisis. An updated reading on unemployment was expected to bring even more bad news today.

"If nothing is done, this recession could linger for years," with unemployment reaching double digits, Obama said in a speech at George Mason University in suburban Virginia. "A bad situation could become dramatically worse."

Less than two weeks from taking office as the 44th president, Obama has become increasingly vocal in recent days about the need for steps to revitalize the economy, even though he has continued to defer to President Bush on matters of foreign policy.

Obama's aides and congressional Democrats have worked for weeks on legislation to create jobs, help the unemployed, cut taxes and aid cash-strapped states.

The measure probably will include a bewildering array of provisions -- from subsidies to help the newly unemployed afford their health care to a massive new effort to improve the energy efficiency of federal buildings.

Obama said this week he hoped to be able to sign legislation by early to mid-February. House Speaker Nancy Pelosi, D-Calif., promised lawmakers she would cancel next month's planned Presidents Day vacation if necessary.

"We are not going home without an economic recovery package," she said at a news conference. Senate Republican leader Mitch McConnell of Kentucky, at a difference appearance, agreed that allowed enough time to get the job done.

"But we ... don't want to make big mistakes that exacerbate the -- the problem we already have, which is a dramatic, eye-popping deficit," he added.

Lawmakers in both parties were digging into the details -- few of which have been made public -- and not always liking what they saw.

Democrats emerging from a private meeting of the Senate Finance Committee had little positive to say about Obama's tax cut proposals. Sen. Kent Conrad, D-N.D., was critical of a proposed tax break for workers and their families.

"Twenty bucks a week. How much of a lift is that going to give?" he said. Nor did he sound positive about a proposed tax break for businesses to create jobs. "If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," he said.

Conrad and others said Obama's blueprint included about $10 billion in tax incentives related to energy, out of about $300 billion overall -- a slice they said was too small.

Sen. Ron Wyden, D-Ore., added, "Just giving people $500 or $600, while certainly welcome when there is all this economic hurt, may not be the best stimulus." He cited evidence that taxpayers used money from the last economic stimulus measure to pay down their debt, rather than make new purchases.

Republicans noted forecasts of a record $1.2 trillion deficit for the current year and said too much additional spending could be harmful. "We can't buy prosperity with more and more government spending," said Rep. John Boehner of Ohio, the House Republican leader.

In his speech, Obama said more bad news was just ahead. He predicted that on Friday, "We are likely to learn that we lost more jobs last year than at any time since World War II."

There were two government reports released within hours of his speech, both showing more weakness in the economy.

One said consumer borrowing -- credit card use and items such as new auto loans -- plunged by $7.94 billion in November, a record amount in dollar terms.

A second said more men and women were drawing jobless benefits last week than at any time since the 1982 recession. Joblessness was 6.7 percent in the government's most recent report before Friday's new figures.

In his speech, Obama said there was plenty of blame to go around for the current economic situation. He cited "an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, D.C."

Yet he also projected an air of confidence about the future.

"We can restore opportunity and prosperity. We should never forget that our workers are still more productive than any on Earth," he said. "Our universities are still the envy of the world."

Pelosi, at her news conference, outlined a schedule for the House to follow. It envisioned committee action in the next few weeks, followed by a vote in the full House after Obama's inauguration on Jan. 20.

Senate Majority Leader Harry Reid of Nevada has also talked of getting legislation to the White House by early February.