Moderate lawmakers from both parties were due to resume negotiations seeking to find compromises on stimulus spending that some have criticized as excessive.
The country's economic turmoil was spotlighted anew as Labor Department figures showed employers slashing 598,000 jobs in January, the deepest dive in 34 years.
The unemployment rate jumped to 7.6 percent. Both were worse than had been forecast by Wall Street economists.
A group of about 18 Democrats and Republicans worked late Thursday to slice about $107 billion from the plan.
President Barack Obama wants the final bill on his desk by Feb. 16 and has stressed the urgency of pushing it through to help reverse the downward spiral of an economy that has been in recession since December 2007.
Meanwhile, Obama plans to name business executives, academics and labor leaders to an advisory panel that will help guide his effort to rescue the economy and rebuild the shattered U.S. financial system.
Former Federal Reserve Chairman Paul Volcker was tapped by Obama in November to lead the Economic Recovery Advisory Board, which is modeled on a board created in the Eisenhower administration to advise the White House on intelligence matters.
Volcker is to join Obama for an 11:15 am EST event to introduce the other 15 members of the economic panel.
Jeffrey Immelt, chief executive of CNBC parent General Electric, is among the members.
Keep track of what Obama has been doing since taking office:
Day 17: Stimulus Bill Debate Continues (Feb. 5)
- Obama urged action on a $900 billion stimulus bill before Congress to stave off "catastrophe", as a surge in the number of new jobless benefit claims pointed to an economy in deep recession. (Full Story)
- The US Senate neared a vote on a huge economic rescue package of tax cuts and new spending sought by Obama, with moderate senators saying the final bill should be around $800 billion.(Full Story)
- The Obama administration has decided on a new package of aid measures for the financial services industry, including a bad bank component, and is expected to announce it next Monday, according to a source familiar with the planning.(Full Story)
- Geithner will convene his first meeting as Chairman of the President's Working Group on Financial Markets, but the expanded gathering also will include top banking regulators and White House economic adviser Larry Summers.(Full Story)
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: Withdrawals, Withdrawals... 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)