Obama warns lawmakers that 'catastrophe' looms

WASHINGTON — President Barack Obama warned lawmakers Thursday that the economic crisis could become a "catastrophe" unless they stop bickering and act, while the Senate's Democratic leader predicted that the president's economic-stimulus package will pass.

"Do we have the votes? We believe we do," said Senate Majority Leader Harry Reid of Nevada.

He thought — and Republican leaders agreed — that once lawmakers finish slogging through amendments to the plan, now estimated at $920 billion, final votes were likely as soon as late Thursday night or Friday.

Obama made a strong pitch Thursday for the measure's passage, citing data that reflect an increasingly ailing economy. The Labor Department is to report January unemployment figures Friday morning, and the numbers are sure to underscore that the economy is contracting severely.

"These numbers that we're seeing are sending an unmistakable message. And so are the American people," Obama said. "The time for talk is over. The time for action is now, because we know that if we do not act, a bad situation will become dramatically worse."

The economic tailspin, he said, "could turn into catastrophe for families and businesses across the country. And I refuse to let that happen."

The president also took on his critics. "We can't go back to the same worn-out ideas that led us here in the first place," Obama said, singling out Republican calls for more tax cuts.

Republicans alone have added about $100 billion to the bill. GOP senators won approval to give some taxpayers a break from the alternative minimum tax this year, costing $70 billion; providing a tax credit of up to $15,000 for new home buyers ($19 billion) and adding funds for the National Institutes of Health ($6.5 billion).

Republicans defended their additions, saying such measures would be pumped directly into the economy. Sen. Lamar Alexander, R-Tenn., said the GOP was giving Obama "exactly what you asked us to do.

"What we're giving you is what we believe is an improvement, number one, fix housing first with low interest mortgages and a tax credit for home buyers," he said, adding that the Republican changes "let people keep more of their own money, that's called tax relief."

Sen. Lisa Murkowski, R-Alaska, explained why it's been so hard to get a compromise: Republicans are looking at the entire bill and essentially trying to rework it, while Democrats are looking for surgical strikes, ways to cut specific programs.

"This should not be about buying somebody's vote," she said. "I want more port money, but if they put in money for ports, will I sign on? Absolutely not."

The plan also includes $139 billion for aid to education; $40 billion for roads and transit; $30 billion for social welfare programs such as expanding unemployment insurance and food stamps; $39 billion for renewable energy projects and a rebuilt electricity grid; $22 billion to computerize U.S. medical records; $87 billion to reimburse states for Medicaid; and much more.

Obama sees the package as not only spurring jobs and growth to fight the recession, but also beginning to retool broad sectors of the U.S. economy for the 21st century.

Many senators, including Obama supporters, however, were uneasy about the size of the plan. If the Senate approves the bill, negotiators from the House of Representatives and the Senate are expected to meet privately to craft a less expensive compromise. The House last week passed an $819 billion stimulus plan.

Lawmakers from both parties want to slice the size of the Senate package.

Underneath all the frenzied activity, though, lay the reason why it's so hard to reduce the bill's size: All lawmakers think their favorite programs are crucial.

Among the disagreements: Whether to cut education aid. Negotiators are split.

Sen. Jim Webb, D-Va., said his staff went through the Senate bill thoroughly and found $100 billion that wouldn't be quickly pumped into the economy. Sen. Ben Nelson, D-Neb., has a list of possible cuts, and freshmen senators met with White House officials to make suggestions.

Republicans tried unsuccessfully to cut the package in half.

"We have strayed badly from the original intent of creating a situation to reverse the terrible decline and economic ditch," said Sen. John McCain, R-Ariz. "We have spending programs and policy provisions which have nothing to do with stimulating the economy and creating jobs."

Sen. Ben Nelson, D-Neb., a leader of the bipartisan centrists seeking compromise cuts, said late Thursday that "getting an agreement has proven much more difficult than anybody anticipated because members have different ideas." He said he, Republicans and the White House continue to negotiate, but have no firm number for how much their package could save.

Sen. Mel Martinez, R-Fla., who's been involved in the talks, wasn't optimistic. "Time is running short," he said.

Many Republicans were notably angry when Obama challenged their philosophy.

"It's incredible that he said that," said Sen. Jim DeMint, R-S.C.

He's among the group of hardcore Republicans who are convinced that Democrats won't listen to anything they say.

"This is not bipartisanship that I envisioned after the election was over," said Sen. Lindsey Graham, R-S.C. "There would be many people up here that will never vote for a compromise product, and they may have a good reason. But we don't have a process to get to a compromise that makes sense."


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Stimulus bill likely to shrink as Obama, GOP trade ideas

South Carolina's DeMint, Sanford stir up stimulus opposition

Obama looks to nation's mayors for stimulus support

Which GOP governors back Obama on stimulus? Republicans

House passes stimulus plan, but with no Republican votes

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