Washington - President Barack Obama warned on Thursday that failure to act on an economic recovery package could plunge the nation into a long-lasting recession that might prove irreversible, a fresh call to a recalcitrant Congress to move quickly.

    In an op-ed piece in The Washington Post, the president argued that each day without his stimulus package, Americans lose more jobs, savings and homes. His message came as congressional leaders struggle to control the huge stimulus bill that's been growing larger by the day in the Senate. The addition of a new tax break for homebuyers Wednesday evening sent the price tag well past $900 billion.

Also see below:     
President Barack Obama | Remarks at US Department of Energy    â€¢

    Senate Democratic leaders hope for passage of the legislation by Friday at the latest, although prospects appear to hinge on crafting a series of spending reductions that would make the bill more palatable to centrists in both parties.

    Obama painted a bleak picture if lawmakers do nothing.

    "This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the newspaper piece titled, "The Action Americans Need."

    He rejected the argument that more tax cuts are needed in the plan and that piecemeal measures would be sufficient, arguing that Americans made their intentions clear in the election.

    "I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change," he wrote.

    His latest plea came on the same day the economy dealt with another dose of bad news: A massive jump in jobless claims and another round of weak retail sales.

    Initial jobless claims rose to 626,000, a 26-year high, the Labor Department said. And the number of claims by people continuing to apply for unemployment benefits reached a new record of nearly 4.8 million.

    The housing tax break was the most notable attempt to date to add help for the crippled industry and gave Republicans a victory as they work to remake the legislation more to their liking.

    "It is time to fix housing first," Sen. Johnny Isakson, R-Ga., said Wednesday night as the Senate agreed without controversy to add the new tax break to the stimulus measure, at an estimated cost of nearly $19 billion.

    Three swing-vote senators met with Obama at the White House on Wednesday to discuss possible cutbacks, but they declined to discuss details of their talks. Obama has made the legislation a cornerstone of his recovery plan.

    For their part, Senate Republicans signaled they would persist in their efforts to reduce spending in the measure, to add tax cuts and reduce the cost of mortgages for millions of homeowners.

    Officials figures were unavailable, but it appeared that the measure carried a price tag of more than $920 billion, making it bigger than the financial industry bailout that passed last year and as large as any measure in memory.

    Despite bipartisan concerns about the cost, Republicans failed in a series of attempts on Wednesday to cut back the bill's size.

    The most sweeping proposal, advanced by Sen. Jim DeMint, R-S.C., would have eliminated all the spending and replaced it with a series of tax cuts. It was defeated 61-36.

    Democrats also upheld a so-called Buy American provision that requires projects financed by the measure to be built with domestically produced iron and steel.

    But with Obama voicing concern about the provision, the requirement was changed to specify that U.S. international trade agreements not to be violated.

    Additionally, Democrats turned back an attempt to strip out a provision that Obama has said was essential. It would provide a tax cut of up to $1,000 for working couples, including those who do not make enough to pay income taxes.

    Isakson said the new tax break for homebuyers was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.

    The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.

    Isakson's office said the proposal would cost the government an estimated $19 billion.

    The provision was the second tax cut approved in as many days targeted to individual industries. On Tuesday, the Senate voted to give a break to consumers who buy new cars.

    The House approved its own version of the bill last week.

Remarks at US Department of Energy

Thursday 05 February 2009

by: President Barack Obama

    The President: Thank you so much. Well, it is a thrill to be here. Thank you, Secretary Chu, for bringing your experience and expertise to this new role. And thanks to all of you who have done so much on behalf of the country each and every day here at the department. You know, your mission is so important, and it's only going to grow as we transform the ways we produce energy and use energy for the sake of our environment, for the sake of our security, and for the sake of our economy.

    As we are meeting, in the halls of Congress just down the street from here, there's a debate going on about the plan I've proposed, the American Recovery and Reinvestment Plan.

    This isn't some abstract debate. Last week, we learned that many of America's largest corporations are planning to lay off tens of thousands of workers. Today we learned that last week, the number of new unemployment claims jumped to 626,000. Tomorrow, we're expecting another dismal jobs report on top of the 2.6 million jobs that we lost last year. We've lost half a million jobs each month for the last two months.

    Now, I believe that legislation of such magnitude as has been proposed deserves the scrutiny that it has received over the last month. I think that's a good thing. That's the way democracy is supposed to work. But these numbers that we're seeing are sending an unmistakable message - and so are the American people. 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. Crisis could turn into catastrophe for families and businesses across the country.

    And I refuse to let that happen. We can't delay and we can't go back to the same worn-out ideas that led us here in the first place. In the last few days, we've seen proposals arise from some in Congress that you may not have read but you'd be very familiar with because you've been hearing them for the last 10 years, maybe longer. They're rooted in the idea that tax cuts alone can solve all our problems; that government doesn't have a role to play; that half-measures and tinkering are somehow enough; that we can afford to ignore our most fundamental economic challenges - the crushing cost of health care, the inadequate state of so many of our schools, our dangerous dependence on foreign oil.

    So let me be clear: Those ideas have been tested, and they have failed. They've taken us from surpluses to an annual deficit of over a trillion dollars, and they've brought our economy to a halt. And that's precisely what the election we just had was all about. The American people have rendered their judgment. And now is the time to move forward, not back. Now is the time for action.

    Just as past generations of Americans have done in trying times, we can and we must turn this moment of challenge into one of opportunity. The plan I've proposed has at its core a simple idea: Let's put Americans to work doing the work that America needs to be done.

    This plan will save or create over 3 million jobs - almost all of them in the private sector.

    This plan will put people to work rebuilding our crumbling roads and bridges, our dangerous - dangerously deficient dams and levees.

    This plan will put people to work modernizing our health care system, not only saving us billions of dollars, but countless lives.

    This plan will put people to work renovating more than 10,000 schools, giving millions of children the chance to learn in 21st century classrooms, libraries and labs - and to all the scientists in the room today, you know what that means for America's future.

    This plan will provide sensible tax relief for the struggling middle class, unemployment insurance and continuing health care coverage for those who've lost their jobs, and it will help prevent our states and local communities from laying off firefighters and teachers and police.

    And finally, this plan will begin to end the tyranny of oil in our time.

    After decades of dragging our feet, this plan will finally spark the creation of a clean energy industry that will create hundreds of thousands of jobs over the next few years, manufacturing wind turbines and solar cells, for example - millions more after that. These jobs and these investments will double our capacity to generate renewable energy over the next few years.

    We'll fund a better, smarter electricity grid and train workers to build it - a grid that will help us ship wind and solar power from one end of this country to another. Think about it. The grid that powers the tools of modern life - computers, appliances, even BlackBerrys - (laughter) - looks largely the same as it did half a century ago. Just these first steps towards modernizing the way we distribute electricity could reduce consumption by 2 to 4 percent.

    We'll also lead a revolution in energy efficiency, modernizing more than 75 percent of federal buildings and improving the efficiency of more than 2 million American homes. This will not only create jobs, it will cut the federal energy bill by a third and save taxpayers $2 billion each year and save Americans billions of dollars more on their utility bills.

    In fact, as part of this effort, today I've signed a presidential memorandum requesting that the Department of Energy set new efficiency standards for common household appliances. This will save consumers money, this will spur innovation, and this will conserve tremendous amounts of energy. We'll save through these simple steps over the next 30 years the amount of energy produced over a two-year period by all the coal-fired power plants in America.

    And through investments in our mass transit system to boost capacity, in our roads to reduce congestion, and in technologies that will accelerate the development of innovations like plug-in hybrid vehicles, we'll be making a significant down payment on a cleaner and more energy independent future.

    Now, I read the other day that critics of this plan ridiculed our notion that we should use part of the money to modernize the entire fleet of federal vehicles to take advantage of state of the art fuel efficiency. This is what they call pork. You know the truth. It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match. And so when you hear these attacks deriding something of such obvious importance as this, you have to ask yourself - are these folks serious? Is it any wonder that we haven't had a real energy policy in this country?

    For the last few years, I've talked about these issues with Americans from one end of this country to another. And Washington may not be ready to get serious about energy independence, but I am. And so are you. And so are the American people.

    Inaction is not an option that is acceptable to me and it's certainly not acceptable to the American people - not on energy, not on the economy, not at this critical moment.

    So I am calling on all the members of Congress - Democrats and Republicans, House and Senate - to rise to this moment. No plan is perfect. There have been constructive changes made to this one over the last several weeks. I would love to see additional improvements today. But the scale and the scope of this plan is the right one. Our approach to energy is the right one. It's what America needs right now, and we need to move forward today. We can't keep on having the same old arguments over and over again that lead us to the exact same spot - where we are wasting previous energy, we're not creating jobs, we're failing to compete in the global economy, and we end up bickering at a time when the economy urgently needs action.

    I thank all of you for being here, and I'm eager to work with Secretary Chu and all of you as we stand up to meet the challenges of this new century. That's what the American people are looking for. That's what I expect out of Congress. That's what I believe we can deliver to our children and our grandchildren in their future.

    Thank you so much, everybody. I appreciate it. Thank you. (Applause.)