Still days from taking office, US president-elect Barack Obama scored his first victory in Congress, winning Senate approval to spend the second half of the massive US$700 billion fund to bail out the nation’s teetering financial system.
Majority Democrats also proposed on Thursday increasing to US$825 billion Obama’s plan for a second package to stimulate the economy through a combination of federal spending and tax cuts. Passage of both measures would leave Obama with a US$1.175 trillion war chest to use against the most dramatic slide in the US economy since the 1930s Great Depression.
Obama on Thursday was to tour a northern Ohio company that manufactures parts for wind turbines, a fitting backdrop to promote alternative energy dollars included in his mammoth stimulus package.
Obama’s campaign-style event was the first of a series he’s expected to hold to generate support for his plan to pull the country from recession.
Citing an economy in crisis and worsening, Obama has spent the past two weeks securing lawmakers’ backing for the eye-popping plan that has drawn skepticism from both Republicans and Democrats because of its price tag and tax provisions. He’s now taking his pitch directly to the public — and trying to sell the sweeping package to lawmakers’ constituents.
Obama was headed into his inauguration on Tuesday with powerful momentum and a clear mandate to steer the course of the US in the midst of a fearsome economic crisis.
A Senate committee overwhelmingly approved the nomination of former rival Democratic candidate Hillary Clinton as secretary of state and the upper chamber’s Judiciary Committee gave Attorney General-designate Eric Holder a relatively easy hearing and was expected to sign off on his appointment as well. Both Cabinet positions will require a vote in the full Senate where both are expected to be approved.
The Senate voted 52-42 to release the second US$350 billion of the financial bailout plan that was put in place late last year as a number of US financial institutions failed or teetered on the brink of collapse.
The Bush administration’s handling of the first half of the US$700 billion package soured many in Congress and the public because most of the money went to big financial institutions to the detriment of smaller investment houses and banks, and homeowners that are faced with mortgage foreclosures.
Earlier this week, the president-elect lobbied hard on Capitol Hill for the release of the money, threatened to veto any bill that blocked its release and promised to alter priorities for its use.
He committed to spending as much as US$100 billion to help those faced with losing their homes. Obama said he understood congressional frustration and that he would shake up the program.
“My pledge is to change the way this plan is implemented and keep faith with the American tax payer by placing strict conditions on CEO [chief executive officer] pay and providing more loans to small businesses, more transparency so that taxpayers can see where their money is spent, and more sensible regulations that will protect consumers, investors and businesses,” Obama said.
House speaker Nancy Pelosi and Senate Majority Leader Harry Reid have pledged to have the economic stimulus bill ready for Obama’s signature by the middle of next month.