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Obama pushes stimulus plan, meets economic team

President Barack Obama speaks to reporters in the Roosevelt Room of the White House. (AP)

By Reuters

President Barack Obama sought to build public support on Saturday for an $825 billion economic recovery plan, pledging in his weekly radio address to use the funds to create jobs, improve healthcare and expand renewable energy. 

The new president, who took office on Tuesday amid the worst financial crisis since the Great Depression, also met with his economic advisers on Saturday after several days of lobbying lawmakers for quick passage of the stimulus package he advocates to lift the economy out of a yearlong recession.

In addition to the stimulus plan, the administration is working on reforms and new uses for the second half of the Troubled Asset Relief Program, the $700 billion financial rescue fund that Congress approved last year.

The new money from the fund was expected to be used to stabilize the housing market, strengthen core US banks and support credit markets to spur lending for autos, homes, small businesses, commercial real estate, college students and municipalities.

The plan could be released as early as next week but would more likely come the following week, a Treasury official said. 

With new signs of weakness in the financial industry, The Washington Post said on Saturday that lawmakers were bracing for a request for new funding for the federal bailout program, but the Treasury official declined to comment on the report.

The White House released few details of the economic team meeting, saying only that "the president met with his economic team again this morning to discuss the week's developments on the Economic Recovery and Reinvestment plan and proposals going forward including the budget."

The session included Larry Summers, director of the Economic Policy Council; Peter Orszag, director of the Office of Management and Budget; and other aides and advisers, the White House said. Treasury Secretary-designate Timothy Geithner did not attend because he has not yet been confirmed by the Senate, said one official. The Senate is expected to vote on his nomination on Monday. 

Late on Saturday, the New York Times said the Obama administration plans to tighten the US financial regulatory system, including stricter rules for hedge funds, credit rating agencies and mortgage brokers. 

The broad changes include increased oversight of the complex financial instruments that helped spawn the current economic crisis, the newspaper said on its website.

The newspaper based its story on interviews with officials as well as confirmation hearings for senior administration appointees, and a recent report by an international committee led by Paul Volcker, one of Obama's chief economic advisers.

Obama used his first weekly radio and Internet video address as president to press the case for quick passage of the economic recovery plan. 

Saying more people filed for unemployment this week than at any time in the past 26 years, Obama warned joblessness could hit double digits and the economy could fall $1 trillion short of its full capacity if nothing was done.

"If we do not act boldly and swiftly, a bad situation could become dramatically worse," he said. Obama hopes to sign an economic recovery plan into law within a month.

The White House posted a four-page report on its website, www.whitehouse.gov, on Saturday outlining the impact of the stimulus plan. Aides said the report began to put "meat on the bones” of Obama's previously stated goals.

Obama said the economic recovery plan would save or create 3 million to 4 million jobs while investing in clean energy development, education and improving health care efficiency.

He said he intended to double the US capacity to generate energy from renewable sources like wind, solar and biofuels, and also discussed building a new electricity grid with 3,000 miles (4,800 km) of transmission lines.

"We'll save taxpayers $2 billion a year by making 75 per cent of federal buildings more energy efficient," he said.

The plan also includes a Clean Energy Financing Initiative with loan guarantees and other financing mechanisms that aim to encourage $100 billion in private sector clean energy financing in three years, an aide said. 

The president said the economic recovery program included funds to computerize the country's health records in five years, which he said would improve health care and save billions of dollars.

The recovery program includes what one aide said was "the single largest investment in preventive health care in our nation's history" to ensure people receive immunizations and get help to stop smoking and reduce obesity. Officials did not place a dollar figure on the program. 

Obama said the plan also had financing to modernize schools, repair roads and expand mass transit.