Tags: obama | housing | fix

Obama Targets Housing Fix After Stimulus Victory

Sunday, 15 Feb 2009 08:21 PM

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WASHINGTON — President Barack Obama will head west this week bidding to arrest America's epidemic of home foreclosures after his gargantuan economic stimulus plan finally cleared Congress.

Aides to the president -- who Saturday called the 787-billion-dollar package of investment and tax cuts "a major milestone on our road to recovery" -- said he would outline his housing plan in Phoenix, Arizona on Wednesday.

The day before, in Denver, Colorado, Obama will sign the stimulus package into law, setting the seal on the first major legislative triumph of his young presidency.

"I think it's safe to say that things have not yet bottomed out," White House spokesman Robert Gibbs told CNN Sunday.

But US states will start getting the stimulus money "relatively quickly," he said, "so they don't have to lay off police officers or firefighters or teachers" and can begin to create jobs in alternative energy.

Meanwhile Gibbs, underlining that Obama will have signed an ambitious economic bill within just four weeks of taking office, denied that the president's promise of bipartisanship had taken a hit.

"He's going to continue to reach out to Republicans, and he's hopeful that Republicans will start to reach back," he said on CBS television.

But Republicans, chafing already at the largest package of government spending in US history, signaled more fights ahead as Obama prepared to take on the stricken housing and financial markets.

Senator Lindsey Graham cited estimates that half a trillion dollars could be needed to fix the property sector, whose tailspin from boom to bust has crippled much of Wall Street and ignited the broader economic crisis.

After the first round of a banking bailout and now the stimulus bill, "it makes it harder for everybody here to go back to the public and say, 'Please give us more money, because we seem irresponsible'," he said on ABC News.

Senator John McCain, Obama's vanquished rival for the presidency, said on CNN: "These are the worst, most difficult challenges, foreign and domestic, perhaps we have faced certainly in our lifetimes.

"So let's start over now and sit down together."

However, senior Obama adviser David Axelrod said Republican complaints smacked of hypocrisy.

"For eight years when we were doubling the national debt, I didn't hear many of these people moralizing about spending," he said on NBC, noting that barely any Republicans opposed former president George W. Bush's Iraq war expenditure.

Obama's stimulus package won just enough support from Republican senators to clear the Senate late Friday after a party-line vote in the House of Representatives.

In his weekly radio address Saturday, Obama said the bill will "lay a new foundation for our lasting economic growth" by saving or creating more than 3.5 million jobs and enacting investments for the long haul.

Next up is the housing market after officials said Friday that two US banks -- JPMorgan Chase and Citigroup -- and mortgage finance giants Freddie Mac and Fannie Mae had imposed moratoriums on home foreclosures.

Treasury Secretary Timothy Geithner last week unveiled a plan that could use as much as 2.5 trillion dollars to aid banks, unfreeze consumer credit markets and stem the home mortgage crisis.

But with nearly 10,000 families a day reportedly losing their homes, only a sketchy public-private investment fund was cited under Geithner's plan to buy up troubled mortgage-backed securities held by the banks.

And with just 50 billion dollars so far devoted by Geithner for foreclosure relief, many believe Obama will have to come back to Congress for more funds after this week's announcement in the home repossession blackspot of Phoenix.

"I don't think it will be enough," Democrat Barney Frank, who chairs the House committee on financial services, told CBS.

But he added his belief that Obama has "a good set of plans coming forward to begin to reduce foreclosures."

Making his debut on the world stage, Geithner Saturday briefed fellow G7 finance ministers on his recovery strategy at emergency talks in Rome, and called for global coordination to prevent new crises.

Copyright © 2009 AFP. All rights reserved.

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