26 Jan 2009

Obama hopes to sign stimulus plan within a month

8:51 pm on 26 January 2009

US President Barack Obama hopes to sign his $US825 billion economic recovery plan into law in less than a month.

Mr Obama pledged in his first weekly radio address to use the funds to create jobs, improve healthcare and expand renewable energy.

It includes the renovation of 10,000 schools in America, updating 5,000km of electricity transmission lines and the computerisation of health records within five years.

Mr Obama used his first weekly internet and radio address as president to press the case for quick passage of the plan.

"I am pleased to say that both parties in Congress are already hard at work on this plan, and I hope to sign it into law in less than a month," he said.

Mr Obama warned that the economic problems would not recede in a short period of time, but expressed confidence that bold action will help put the country back on track.

"If we act as citizens and not partisans and begin again the work of remaking America, then I have faith that we will emerge from this trying time even stronger and more prosperous than we were before," the president assured.

The comments came after US unemployment claims hit a 26-year high and home building fell to half-century lows, highlighting the scale of the challenge faced by the new US administration.

Gloomy figures

The Labor Department reported on Thursday that the number of initial unemployment claims in the week that ended 17 January soared to 589,000, the highest level since November 1982.

Last year, the US economy lost a total of 2.6 million jobs, propelling the national unemployment rated to a 16-year high of 7.2%.

Meanwhile, the number of housing starts plunged from November to December by 15.5% to an annualised rate of 550,000 units, according to the Commerce Department.

President Obama warned that if nothing was done, the unemployment rate could reach double digits and the US economy could fall one trillion dollars short of its full capacity.

But he argued that his stimulus plan, which aims to boost vast sectors of the economy while creating between three and four million new jobs, would inject new life into the shrinking economy.

Obama meets party leaders, advisers

The stimulus package is being considered by Congress, and Mr Obama met both Democratic and Republican congressional leaders on Friday to facilitate its passage.

Republicans said they were concerned about the size of the package, saying it could seriously aggravate the budget deficit, projected by the Congressional Budget Office to reach a $US1.1 trillion dollars in fiscal 2009.

The new president met his economic advisers on Saturday but did not immediately release details of what was discussed at the economic team meeting or who attended.

Mr Obama's economic team is also working on a plan for the remaining half of a $US700 billion bailout that Congress approved last year to help US financial firms.

The plan is expected to help distressed banks as well as providing aid for people who face losing their homes.

The plan could be released as early as next week but would more likely come the following week, a Treasury official said.