US PRESIDENT Barack Obama will travel to Capitol Hill tomorrow in an effort to persuade reluctant Republicans to back an $825 billion package of tax cuts and spending projects aimed at rescuing the American economy.
Mr Obama’s top economic adviser Larry Summers said yesterday that the economy was in its worst shape since the end of the second World War, warning that the stimulus package will take time to have an effect.
"These problems weren't made in a day or a week or a month or even a year, and they're not going to get solved that fast," he told NBC's Meet the Press.
Mr Summers said the administration would ensure the funds would be dispersed as quickly as possible and vice-president Joe Biden said urgent action was needed as the economy continued to shed 500,000 jobs each month.
“It is worse, quite frankly, than everyone thought it was, and it is getting worse every day,” Mr Biden said. “There has been no good news”.
The vice-president said the economic recovery plan had already won bipartisan support, despite the misgivings of some leading Republicans who complain that the plan is too expensive and could be ineffective. “Roughly 40 per cent of this entire package is tax cuts – that is not what the Democrats wanted – and 60 per cent is spending, economic stimulus – not what the Republicans wanted. But we have come a pretty long way.”
Mr Obama used his weekly radio address to make the case for the recovery plan directly to the American public, describing the economic situation as an “unprecedented crisis”. “I know that some are sceptical about the size and scale of this recovery plan. I understand that scepticism, which is why this recovery plan must and will include unprecedented measures that will allow the American people to hold my administration accountable for these results,” the president said.
“No one policy or programme will solve the challenges we face right now, nor will this crisis recede in a short period of time. But if we act now and act boldly; if we start rewarding hard work and responsibility once more; if we act as citizens and not partisans and begin again the work of remaking America, then I have faith that we will emerge from this trying time even stronger and more prosperous than we were before.”
Senate Republicans have generally been warmer towards the president’s plan than their counterparts in the House of Representatives but Mr Obama’s former rival in the presidential race, Arizona senator John McCain, said yesterday that he could not support the recovery package. “There have to be major rewrites if we want to stimulate the economy. As it stands now I can’t vote for it.”
House speaker Nancy Pelosi said she remains confident that the plan will be passed by Congress and ready for Mr Obama to sign by the middle of next month. She would listen to Republican suggestions but rejected their calls for the plan to include more tax cuts.
"We have a strategic vision for this legislation," Ms Pelosi told ABC News' This Week. " We have listened to [economists'] assessment of where we are. We have listened to what they have said about where jobs are created. And from right to left they have told us that the investments that we make create more jobs than tax cuts."