US President-elect Barack Obama vowed to retool a $700 billion financial rescue plan to save more families from foreclosure, and his aides met congressional leaders on Sunday to chart fresh spending measures to restore a fragile economy.
"When you look at how we have handled the home foreclosure situation and whether we've done enough in terms of helping families ... we haven't done enough there," Obama told ABC's "This Week" in an interview broadcast on Sunday. Obama said his staff was working closely with congressional leaders to modify terms of the financial rescue plan and draft a broader economic stimulus package that could, taken together, inject more than a trillion dollars into the ailing economy.
"We're going to have a collaborative, consultative process with Congress over the next few days," said Obama, who takes over as president from President George W. Bush on January 20. "We're not trying to jam anything down people's throats," he said.
Senate Democrats were meeting behind closed doors on Sunday to discuss the stimulus package with Obama economic and legislative advisers, including Lawrence Summers, the incoming national economic adviser.
Last week Obama's top aides visited Capitol Hill to allay lawmakers' concerns about the roughly $800 billion package. With those big spending plans will come budget deficits. Nancy Pelosi, speaker of the House of Representatives, has suggested that lawmakers might have to increase taxes on the wealthy to cover that shortfall.
ECONOMIC CLOUDS GATHER:
Government figures last week showed the unemployment rate surged in December to 7.2 percent, capping a year in which employers slashed 2.6 million jobs from their payrolls, the most since 1945. Obama wants passage of a stimulus plan by mid-February, saying it is crucial to reviving the economy.
The Bush administration has already allotted the first half of the $700 billion financial rescue fund, and the Obama team could soon seek the remaining $350 billion.
The Troubled Asset Relief Program has chiefly been used to give banks fresh capital so they can return to normal lending but Obama and his Democratic colleagues on Capitol Hill want more of that money to go directly to consumers. Billions of TARP funds would go to prevent foreclosures, spur consumer borrowing and help local governments win loans under a plan from Democratic Rep. Barney Frank, chairman of the House Financial Services Committee.
Congress must give its approval to unlock the rest of TARP funds and lawmakers who have been skeptical about the program have said they may oppose it. "Until there is a demonstrated need in our economy and a plan to address that need, I think it would be irresponsible for them to release that money," House Minority Leader John Boehner, an Ohio Republican, told CBS's "Face the Nation".
Obama faulted the TARP program for having insufficient oversight but said that he was committed to restoring financial markets to health.
"Keeping (the) flow of credit is critical," he said. As his economic team met inside the Capitol, outside there was a full-blown rehearsal of Obama's inaugural ceremony going on. Stand-ins for Obama and other top officials went through the program as the real leaders will do on January 20.
In his ABC interview, Obama said the bulk of his stimulus plan would go toward spending on public works projects and on such initiatives as laying down broadband lines and making homes and government buildings more energy efficient. Obama said such projects delivered "the most bang for the buck" because they provided jobs to people, enabling them to spend more, which has ripple effects throughout the economy.
Obama's spending promises virtually guarantee record deficits for years to come, the president-elect has acknowledged. Pelosi said increasing taxes on the wealthiest Americans was one way to cover that shortfall. "I want a repeal of the tax cuts for the highest-income people in America. I don't think we can wait until they expire. I think they need to be repealed - not in this legislation. That's a subject for another day," she told CNN's "Late Edition."
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