US Economic Stimulus Plan Appears Unlikely This Year

A broad economic stimulus bill, which President-elect Barack Obama wants Congress to pass promptly, is not likely to be approved by the Senate during its short legislative session this week, a top Senate aide said Monday.

AP

Jim Manley, a spokesman for Senate Democratic Leader Harry Reid, said he was hopeful, however, that the Senate would be able to pass legislation extending jobless benefits for the long-term unemployed.

"Unfortunately it doesn't look like the Republicans will allow us to pass a comprehensive stimulus package," Manley said. "Hopefully we will be able to pass an extension of unemployment insurance benefits."

Separately, Treasury Secretary Henry Paulson said he doesn't plan to ask for Congress for authority to use the second half of the $700 Wall Street bailout fund.

"I'm going to do what we need to do to keep the system strong but I'm not going to be looking to start up new things unless they're necessary, unless they make great sense," Paulson told the Wall Street Journal.

Decisions about the rest of the money will likely fall to President-elect Barack Obama after he takes office.

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Many Republicans in the Senate and House have criticized the Democrats' plans for additional economic stimulus—including billions of dollars for road and bridge rebuilding—saying the money would not effectively jump-start the economy in the short-term.

But the U.S. Conference of Mayors has estimated that 4,591 infrastructure projects, at a cost of $24.4 billion, are "ready to go" and that they would immediately create jobs and "stimulate main street economies."

Obama, who will be sworn in as president on Jan. 20, has called on Congress to use this week's post-election session to approve a broad economic stimulus bill and some Democrats have talked about spending at least $150 billion.

Obama said if Congress does not pass such a measure this year, it would be at the top of his agenda once he becomes president.

In September, the House approved up to 20 weeks of additional benefits for the long-term unemployed, at a cost of about $6.5 billion.

Congress, meanwhile, is focusing this week on some kind of bailout for the auto industry.

The White House said Monday that it supports help for auto makers but opposes using money from the $700 billion Wall Street rescue program. Democrats want to use part of the fund for emergency loans to help prop up the Big Three carmakers. A vote on the issue is expected later this week

Also Monday, the Philadelphia Federal Reserve said the U.S. economy fell into recession last spring and will contract sharply this quarter as more than 200,000 workers per month are added to the rolls of the unemployed.

The latest Survey of Professional Forecasters removed some of the glow from an earlier report showing industrial output rebounded in October after hurricane disruptions produced a stunning fall in September.

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