Obama focusing on stimulus, foreclosure crisis

WASHINGTON (AP) -- President Barack Obama promotes his economic agenda this week with trips outside Washington to sign the $787 billion stimulus package and to tackle the home mortgage foreclosure crisis.

As he struggles to lift the country out of its worst economic downturn since the Great Depression of the 1930s, Obama termed passage of the stimulus measure a "major milestone on our road to recovery." Of perhaps equal importance will be his effort to reverse the collapsing housing market that triggered the financial crisis.

The stimulus package, which passed with no GOP support in the House and the minimum three Republican votes in the Senate, aims to save or create as many as 3.5 million jobs through massive government investment while boosting consumer spending through modest tax cuts.

The mortgage plan is intended as a counteroffensive against the housing collapse that has seen millions of people default on loans and lose their homes. Lending froze as banks and investment houses realized they were holding trillions of dollars in bad assets.

Under an emergency $700 billion program passed late last year, the Bush administration used half to forestall a financial collapse. But the flow of credit did not ease and use of the money was criticized because it was poorly administered and overseen.

Obama is now working to leverage the second portion of the bailout money into a program that could result in $2 trillion in government and private sector cash infusions to help banks and investment houses clear away "toxic" holdings and thereby spur lending.

Obama's senior White House adviser said Sunday that people soon will see positive effects of the stimulus plan. Speaking on "Fox News Sunday," David Axelrod said signs that the stimulus program is working will be obvious as work begins on infrastructure and other programs.

Yet, Axelrod warned, it's going to take time for the effects to register in employment statistics and the economy is likely to get even worse before it begins to rebound. White House spokesman Robert Gibbs agreed that the economy hasn't bottomed out yet. But he predicted the stimulus will put the country on the road to recovery.

Gibbs also said Obama will continue "unprecedented" outreach to Republicans, whose opposition to the stimulus measure has found them with dismal poll numbers among Americans suffering under the recession.

Sen. John McCain, nevertheless, said Obama failed to include Republicans in writing the big economic stimulus bill. The Arizona Republican said the stimulus spending will create what he calls "generational theft" - huge federal deficits for years to come.

McCain, who lost the presidential race to Obama, said Obama the president is backtracking on promises of bipartisanship and was off to a bad start. "Let's start over now and sit down together," said McCain, who appeared with Gibbs on CNN's "State of the Union."

By signing the stimulus bill into law Tuesday in Denver and detailing his mortgage rescue proposal the next day in Phoenix, Obama is continuing to take his message directly to the public. Both actions show he is trying to sidestep the partisanship still gripping Washington despite his efforts to soften the Republican opposition.


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