Stimulus bill: Obama calls for quick action as lawmakers seek changes

With both Democrats and Republicans seeking changes to President Obama's economic-stimulus package the debate has been joined in right earnest by both sides.

The stimulus to the ailing housing industry has emerged as a bone of contention with democrats preparing plans for massive cuts amounting to tens of billions dollars in spending on the industry.

Meanwhile Obama has played down the differences terming them ''very modest''.

Democratic congressional leaders met with him yesterday at the White House to discuss the measures.

According to a White House statement, ''They agreed on the urgency of passing effective legislation in the short term and committed to continue working together to achieve the bipartisan consensus'' that Obama has sought.

In the Capitol, Republicans said that they are not seeking to block the bill but to change it. "Nobody that I know of is trying to keep a package from passing," said Sen. Mitch McConnell of Kentucky, the Republican leader.

The House of Representative had passed a legislation along similar lines last week without Republican support.

Meanwhile Senate Democrats expect to get the minimum two Republican votes that they will need to clear procedural roadblocks in the 100-member Senate.

Once the bill gets passed in the Senate, negotiators from the two chambers will try to resolve differences. The final bill will then be sent to Obama to sign into law.

Obama has said that he wants such legislation by the middle of the month.

However, Senate Republicans are bracing up to fight to and put more emphasis on tax cuts and interest rate-lowering relief for homeowners and to limit new spending.

McConnell said the package could be trimmed and it should focus first on easing the record home foreclosures that have been blamed as the root cause of the deepening recession.

Republicans suggested the package should include a provision to reduce mortgage rates to as low as four per cent as it would attract buyers into the stagnating housing market at the same time lower cost for existing homeowners.

McConnell opposed the proposed "buy American" restrictions aimed at ensuring that

iron, steel and manufactured goods used in infrastructure projects like building roads and bridges are sourced though US manufacturers.

The US Treasury Department is working on new guidelines for Wall Street firms which will be outlined in the next few days, according to officials. These are expected to include new standards for lending and restrictions on executive pay.

Obama said he is expecting a "difficult next few days" as the Senate wrangles over the bill adding, ''We can put America back to work and start digging ourselves out of this deep hole we're in."