President Barack Obama warned 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 in The Washington Post, the president argued that each day without his stimulus package, now exceeding $900 billion in the Senate, Americans lose more jobs, savings and homes.
He 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 op-ed titled, "The Action Americans Need."
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 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.
Additionally, the Obama administration decided on a new package of aid measures for the financial services industry, including a bad bank component, and is expected to announce them next Monday.
The plan will be "smaller" than originally expected, according to a source, and centered around government guarantees and insurance of troubled assets, what's called a "ring fence" concept.
"Everybody seems to like that," said the source. "There's a lot of internal conflict about whether this [the bad bank] makes sense ... they realize they have to do something with the bad bank."
Keep track of what Obama has been doing since taking office:
Day 16: Obama Imposes New Pay Rule (Feb. 4)
- Obama imposed tough new rules to rein in corporate pay, capping executive compensation at $500,000 a year for companies receiving taxpayer funds and limiting lavish severance packages paid to top officials. (Full Story)
- Republicans tried to push back against the ballooning size of Obama's stimulus plan, even as he warned that the financial crisis will turn into "a catastrophe" if the bill isn't passed quickly. Obama summoned centrist senators to the White House to discuss a plan to cut more than $50 billion in spending from the measure, which breached the $900 billion barrier in the Senate. (Full Story)
- An ex-aide to Commerce Secretary nominee Judd Gregg is under investigation for allegedly taking baseball and hockey tickets from a lobbyist in exchange for legislative favors. This comes at a particularly bad time for Obama's administration, a day after he had to defend his selection process because two high-profile nominees withdrew due to tax problems. (Full Story)
Day 15: Withdrawls, Withdrawls... But the Show Goes On (Feb. 3)
- Former Senator Tom Daschle has withdrawn his name for Secretary of Health and Human Services. The action comes after Daschle admitted failure to pay past taxes. "Now we must move forward," Obama said in a written statement accepting Daschle's request to be taken out of consideration. (Full Story)
- Obama's choice to oversee budget and spending reform, Nancy Killefer, also withdrew her nomination Tuesday because of tax reasons, according to a letter released by the White House. (Full Story)
- A group of Republican senators offered a $445 billion alternative plan to boosting the ailing economy, about half of which would be in the form of tax cuts. The stimulus package would include cutting payroll and income taxes for a year, as well as lowering the 35 percent corporate tax rate to 25 percent and offering home buyers a tax credit worth $15,000 or 10 percent of the purchase price, whichever is less. (Full Story)
- The Obama administration is still struggling with the details of a bad bank concept that is expected to be part of a package of industry and consumer measures to be unveiled next week, according to a source familiar with the situation.(Full Story)
- New U.S. Attorney General Eric Holder said he would prosecute Wall Street crime but was not planning any "witch hunts" despite mounting outrage among Americans over corporate excess. "We're not going to go out on any witch hunts," Holder told reporters. (Full Story)
Day 14: Obama Targets CEO Pay (Feb. 2)
- The Obama administration indicated that it will not unveil new measures to aid the financial services industry this week, but will instead move on the issue of Wall Street bonuses and executive compensation. (Full Story)
- Fighting to save his Cabinet nomination, Tom Daschle pleaded his case in a closed meeting with former Senate colleagues after publicly apologizing for failing to pay more than $120,000 in taxes. Obama said he was "absolutely" sticking with his nominee for health secretary, and a key senator added an important endorsement. (Full Story)
Day 13: Obama's Bill 'Wastes a Ton of Money': Sen. Kyl (Feb. 1)
- The U.S. Senate's No. 2 Republican warned his party's support for Obama's economic stimulus bill was eroding and "major structural changes" were needed to win Republican support. "You have to start from scratch and reconstruct this," said Sen. Jon Kyl of Arizona. He said the proposed bill, with a price approaching $900 billion, "wastes a ton of money." (Full Story)
- Discussions between the Obama administration and financial industry representatives continued for a third day with the focus moving to new terms on lending, transparency and executive compensation for companies receiving financial aid, according to a source familiar with the situation. (Full Story)
Day 12: Your Weekly Address (Jan. 31)
- In this week's address, Obama urged the swift passage of an American Recovery and Reinvestment Plan and announced that Geithner is preparing a new strategy for reviving the financial system, which will not only ensure that CEOs aren't abusing taxpayer dollars, but also get credit flowing and lower mortgage costs. (Watch the video here)
Day 11: Obama Administration Meets with Wall Street Execs. (Jan. 30)
- Officials from the Obama administration held meetings with Wall Street executives on how to create a new government bank to buy bad assets from major financial firms. However, people with direct knowledge of the talks said there is no consensus on how such an entity would work or whether a plan could materialize any time soon or possibly ever. (Full Story)
- Republican Senator Judd Gregg of New Hampshire confirmed that Obama may nominate him as U.S. commerce secretary. A source said Obama had backed off Silicon Valley executive John Thompson, who just days ago was viewed as the front-runner. (Full Story)
- The Obama administration said it expects the U.S. House to approve legislation that would delay until June the planned nationwide transition to digital television. The Senate has approved legislation to delay the transition because of worries that some 20 million mostly poor, elderly and rural households that have older television sets receiving analog signals are not ready for the change. (Full Story)
Day 10: Obama: Wall Street Bonuses are 'Outrageous' (Jan. 29)
- Obama said it is "irresponsible and shameful" for Wall Street bankers to be paid huge bonuses at a time when the America is dealing with economic hardship. He reacted harshly to reports that corporate employees got paid more than $18 billion in bonuses last year. Obama said he and Treasury Secretary Timothy Geithner will have direct conversations with corporate leaders to make the point. (Full Story)
- Vice President Joe Biden told CNBC that the final stimulus bill, which is now in the Senate, will "get better," and he "expects Republicans to vote for it." "We're not giving up on bipartisan support," Biden said. Biden went on to say that the bill may end up having additional infrastructure spending and tax cuts but didn't say what those tax cuts might be. (Full Story)
- Gov. Rod Blagojevich was unanimously convicted at his impeachment trial and thrown out of office, ending a nearly two-month crisis that erupted with his arrest on charges he tried to sell Obama's vacant Senate seat. Blagojevich becomes the first U.S. governor in more than 20 years to be removed by impeachment. (Full Story)
Day 9: Stimulus Package Passes Vote in House (Jan. 28)
- Moving with remarkable speed, the Democratic-controlled U.S. House of Representatives approved $819 billion in spending increases and tax cuts at the heart of Obama's economic recovery program. Unhappy Republicans, however, said the bill was short on tax cuts and contained too much spending, much of it wasteful and unlikely to help laid-off Americans. (Full Story)
- Obama met with business leaders to keep up a lobbying campaign for passage of his economic plan, which could be the signature domestic initiative of his first term as he struggles to deal with the worst financial crisis in decades. Obama said it was important to act swiftly to boost the troubled U.S. economy, adding that it was facing "enormous problems." (Full Story)
- Republicans in the House, however, offered an alternative proposal to boost the struggling U.S. economy. The cost of their proposal is approximately $478 billion. (Full Story)
Russia has halted a plan to retaliate against a proposed U.S. missile defense shield by stationing its own missiles near Europe's borders. The suspension of plans, if confirmed, would show Russia is extending an olive branch to Obama after rocky relations under his predecessor. (Full Story)
Day 8: The Stimulus Package Plan Moves Forward (Jan. 27)
- Obama said he wants the House to pass legislation that hits his goal of spending 75 percent of the $825 billion stimulus plan within 18 months. The bill that the House is considering would only spend 64 percent of the money in that period, according to an analysis by the Congressional Budget Office. (Full Story)
- Geithner announced new rules to limit lobbying by companies that receive government financial assistance in one of his first moves after being sworn into office. The rules restrict lobbyist contacts in connection with applications for or disbursement of the Treasury's $700 billion bailout program. The rules will use as a model the protections that limit political influence on tax matters, and require the Treasury to certify each investment decision is based only on investment criteria and facts of the case. (Full Story)
- Symantec president John Thompson is Obama's top choice for commerce secretary.White House spokesman Gibbs said a final decision had not been made. Obama had previously nominated New Mexico Governor Bill Richardson to fill the commerce post, but Richardson withdrew on Jan. 4 in the face of a legal inquiry. (Full Story)
Day 7: Obama's New Climate Policies (Jan. 26)
- Obama told the Environmental Protection Agency to reconsider California's request to regulate greenhouse gas emissions from cars, reversing the climate policies of former President George W. Bush. (Full Story)
- Timothy Geithner won confirmation as U.S. Treasury secretary and vowed to act quickly to protect the U.S. economy from the worst financial crisis since the Great Depression.However, some lawmakers were disturbed by Geithner's late payment of $34,000 in self-employment taxes to vote against the nominee even though they felt he was well suited for the job otherwise. (Full Story)
Day 5: Your Weekly Address (Jan. 24)
- In his first weekly address as President, Barack Obama discusses how the American Recovery and Reinvestment Plan will jump-start the economy. (Watch the video here)
Day 4: Stimulus Package by President's Day? (Jan. 23)
- President Barack Obama said Friday it appears Congress is "on target" to approve a massive new stimulus package by Feb. 16th, President's Day. Obama met with top Democratic and Republican leaders on Friday and said the stimulus package working its way through Congress would be only one leg of an "at least three-legged stool." He said the government needed to move "swiftly and aggressively" as the economy and the financial system struggle. (Full Story)
Auto industry supporters in Congress asked Obama to support another $25 billion in federal loans to help the industry make more fuel efficient cars, seeking over $4 billion in grants and loan guarantees. The White House said Obama and his advisers will evaluate the needs of automakers after reviewing their viability plans in mid-February. (Full Story)
Day 3: House Considers Obama’s Plan (Jan. 22)
- The U.S. House Ways and Means Committee on Thursday began debating $20 billion in energy tax credits and related financial incentives that are in the Obama administration's plan to revive the American economy. (Full Story)
- House Speaker Nancy Pelosi said the house next week would consider the $825 billion economic stimulus package sought by Obama. (Full Story)
- The Senate Finance Committee approved the nomination of Geithner to head the U.S. Treasury, overlooking concerns about his underpayment of some $34,000 in taxes and clearing the way for a final vote on his nomination in the full Senate. (Full Story)
- Obama, who worried after winning office that he would have to part with his BlackBerry because of security concerns, will get to keep the email device after all. (Full Story)
Day 2: Back to Business (Jan. 21)
- In a day flurry of activity, Obama set up shop in the Oval Office, summoned advisers to begin dealing with war and recession and ordered new ethics rules for "a clean break from business as usual." (Full Story)
- Obama froze salaries for top White House staff members earning $100,000 or more, about 100 people in all. (Full Story)
- In his phone calls to Israeli, Palestinian, Egyptian and Jordanian leaders, Obama emphasized that he would work to consolidate the cease-fire between Israel and Hamas in Gaza. (Full Story)
- Obama imposed the New Freedom of Information Act rules, making it harder to keep the workings of government secret. (Full Story)
- Obama also imposed tighter ethics rules governing when administration officials can work on issues on which they previously lobbied governmental agencies, and banning them from lobbying the administration after leaving government service. (Full Story)
- Geithner testifies to the Senate Financial Committee and apologizes for his tax mistakes. He also comments on Obama’s economic stabilization plan. (Full Story)
Day 1: Inauguration Day (Jan. 20)
- The first African-American U.S. president swore to preserve, protect and defend the Constitution against a backdrop of a deep economic downturn, a trillion dollar federal deficit and fears of more bank losses. (Full Story)
- Wall Street ushered in the Barack Obama presidency with a record Inauguration Day slide amid fresh signs the global bank crisis was far from over. An index of bank stocks lost almost 20 percent on fears of more losses. The Dow fell over 300 points to end below 8,000. The S&P slid more than 40 points to finish around 800 and the Nasdaq tumbled over 80 points to close around 1,450. (Full Story)