Obama may find Europe reticent on some US goals

WASHINGTON – President Barack Obama's first European trip could dampen his hopes that a new diplomatic style will convert once-reluctant allies into cooperative global partners.

From taking in Guantanamo Bay prisoners to sending more troops into Afghanistan's most difficult regions and spending their way out of economic crisis, European nations remain reticent about some of the toughest U.S. priorities.

Obama jets across the Atlantic on Tuesday on an eight-day, five-country trip that will be dizzying even by the usual peripatetic standards of presidential foreign travel.

He will attend international summits on complex, urgent topics — the global financial meltdown and the fight against terrorists in Afghanistan and Pakistan. He plans individual meetings with leaders important to U.S. strategic interests, from nations including Russia, China, Britain, France, Germany, South Korea, Saudi Arabia and India. Obama also will make his first stop in a Muslim nation, Turkey.

Wildly popular around the globe but relatively inexperienced in foreign affairs, Obama also will squeeze in a Buckingham Palace audience with Queen Elizabeth II, joined by his wife, Michelle; deliver a speech in France on the trans-Atlantic relationship and an address in Prague on weapons proliferation; and holding a round-table session with students in Turkey.

When Obama went to Europe last summer as a presidential candidate, he was received like a rock star and his welcome this time is expected to be no less enthusiastic.

Since taking office, Obama has made down payments on several campaign promises that had endeared him to Europe, such as addressing global warming, ending the Iraq war and closing the U.S. prison camp at Guantanamo Bay, Cuba. Each had stoked acrimony toward former President George W. Bush.

Obama unveils agenda for first overseas trip

WASHINGTON – As President Barack Obama embarks on his first overseas trip as president, he is vowing to listen to his foreign counterparts and lead by example when world powers meet in Europe this coming week to address the economic crisis and work to stem future financial catastrophes.

Obama's jam-packed agenda includes a speech in France on the U.S. trans-Atlantic relationship. He'll deliver another one in the Czech Republic on proliferation. Then he's off to hold a roundtable in Turkey with students. He also has plans to meet with Saudi Arabia's King Abdullah, as well as a slew of other heads of state as part of a rigorous schedule.

"It's an opportunity ... to not just confront the inherited challenges that the administration took on, but also to re-energize our alliances to confront the looming threats of the 21st Century," said Denis McDonough, the administration's deputy national security adviser for strategic communications.

While economics certainly will dominate discussions, advisers said nuclear proliferation, cyber threats, climate change, energy security, terrorism, and Obama's new strategy for Afghanistan and Pakistan also will be discussed at G-20, European Union and NATO gatherings.

Thus far, Obama's only foreign trip as president was a daylong visit to Canada.

As a White House candidate last summer, Obama traveled to the Middle East and Europe in what was then his first high-profile step onto the international stage. He drew huge crowds everywhere he went, including an enormous one estimated at more than 200,000 in Berlin.

Expected to be gone nearly a week, the president leaves Washington on Tuesday for London to take part in the economic summit of 20 major and developing nations that together represent more than 85 percent of the global economy. Advisers said the goal was to manage the current crisis by restoring growth and to prevent a future downturn by reforming financial regulations.

"The president and America are going to listen in London as well as to lead," White House spokesman Robert Gibbs said.

Discussions are expected to be intense as there are wide differences between the U.S. and Europe over how to stabilize and grow economies.

While in London, Obama plans meetings with British Prime Minister Gordon Brown, Chinese President Hu Jintao, Russian President Dmitry Medvedev, Queen Elizabeth II, and Conservative Party leader David Cameron. Obama is also scheduled to meet with Saudi Arabia's Abdullah, Indian Prime Minister Manmohan Singh and South Korean President Lee Myung-bak.

Later in the week, Obama is slated to travel to Strasbourg, France, and Kehl, Germany, where he will meet with French President Nicolas Sarkozy and German Chancellor Angela Merkel, and participate in a NATO working group. He also will deliver an address on the United States' trans-Atlantic alliance and take questions from students.

More NATO meetings are on tap for the weekend before Obama flies to Prague, capital of the Czech Republic, for a European Union summit. He is slated to hold talks with Czech Republic President Vaclav Klaus, former Czech President Vaclav Havel and prime minister Mirek Topolanek, who resigned Thursday after his three-party coalition government lost a parliamentary vote of no confidence.

Also in Prague, Obama plans to deliver a speech on nuclear proliferation.

He then will travel to Ankara, Turkey, where advisers said Obama will make clear that Turkey is a "vital" member of NATO and a close ally of the United States.

While there, he plans meetings with Turkish President Abdullah Gul and Prime Minister Recep Tayyip Erdogan before holding a round-table in Istanbul on Tuesday with students in what advisers called an attempt to reach out to young people in Europe and Southwest Asia.

Obama seeks to rein in Wall Street, broaden agenda

WASHINGTON – President Barack Obama and congressional Democrats are stepping through an economic minefield and sowing the ground with unprecedented initiatives that capitalize on the recession to rein in Wall Street and broaden government's reach.

Nothing better illustrated this watershed than the bustle and scope of the past few days.

Obama's treasury secretary, Timothy Geithner, touched off a Wall Street rally with a long-awaited plan to help rid banks of their toxic assets. Geithner rolled out a comprehensive overhaul of financial regulations in hopes of avoiding another meltdown. Congressional Democrats worked to put their own imprint on a budget full of ambition but saddled with deficits.

In each case, the policies showed a pumped up role for government: leveraging money from the private sector, taking over troubled institutions, better governing ever-expanding financial markets, and promising greater influence over health care, energy and education.

Just as government proved it could flex its muscle, it also showed where it could wilt.

After days of fuming over bonuses paid by insurer American International Group Inc., Obama and members of Congress checked their tantrums and moved on. The House and Senate budgets embraced Obama's policy priorities, but lawmakers delayed difficult decisions on how to pay for them.

The flurry coincided with and was partly motivated by Obama's first overseas trip, which starts with a stop in London for an economic summit Thursday of 20 major and developing nations. There are wide differences between the U.S. and Europe over how to prime economies. Also, China has suggested replacing the dollar with a new global currency.

"We're kind of at a critical point," says former Rep. Mickey Edwards, an Oklahoma Republican and Princeton University lecturer.

"Proposals that are being made are to have the U.S. government much more involved in financial and business decision making," Edwards said. "Whether it's leading up to the G-20 and saying how do we reassure the rest of the world of our leadership, or how do we have a regulatory system that works with what the world looks like now — it's a big moment."

Obama's heaviest lifting came last week as he worked to save his domestic priorities and accommodate deficit-conscious Democrats while also standing squarely behind Geithner's bank rescue and financial regulation plans.

In the face of withering criticism from Republicans, who say his budget borrows, spends and taxes too much, Obama has used the economic crisis to justify his long-term fiscal blueprint, even though his own forecasts envision the country out of the recession by 2011.

"This budget is inseparable from this recovery, because it is what lays the foundation for a secure and lasting prosperity," he said during his prime-time press conference Tuesday.

Sen. Judd Gregg, the top Republican on the Senate Budget Committee, used his party's weekly radio address Saturday to slam Obama's grand spending plans. "We believe you create prosperity by having an affordable government that pursues its responsibilities without excessive costs, taxes or debt." said Gregg, R-N.H.

House and Senate budget writers trimmed some of Obama's spending proposals, cut his budget outlook from 10 years to five years, and refused to endorse administration plans for fees on greenhouse gas emissions and limits on tax deductions for wealthier earners. Still, they at least gave a symbolic endorsement of Obama's call to begin an overhaul of health care, reduce dependence on foreign oil and confront global climate change, leaving the politically crunching details for later.

The Democrats' budget plans also jettisoned $250 billion in spending that Obama had included in his budget as a placeholder for future bank rescues.

Geithner signaled the possibility of seeking more money when he spelled out a public-private partnership designed to leverage up to $1 trillion in purchases of such assets. But the request does not appear imminent. "We will work with the Congress to try to make sure that there are enough resources over time to do this right," he said.

The asset-purchase plan is certainly risky and could mean billions in losses for taxpayers. But it could rescue the banks and make money for both the government and the private investors down the road. That, at least, is Geithner's bet. And the stock market was, for the moment, betting with him. The Dow Jones industrial average shot up nearly 500 points the day of his announcement.

Covered in the afterglow, Geithner rolled out proposed rules for the financial sector, restructuring what many believe is a corroded regulatory framework dating back to the days of Franklin D. Roosevelt.

Geithner called for an entity that could seize large failing institutions, much like the Federal Deposit Insurance Corp. can take over banks. His plan also would set up an overarching authority to monitor Wall Street risk-taking and oversee markets that have operated in the shadows, such as hedge funds and exotic financial products.

As with the budget, the administration is capitalizing on the financial crisis to push for robust new rules. "We have a moment of opportunity now," Geithner said, "and we don't want to waste this opportunity."

Rob Shapiro, a former economic adviser to President Bill Clinton, said the question for the administration is how far it can push the sense of urgency before the public, and by extension Congress, becomes wary of the cost and perceives government intervention as intrusion.

"The hardest problem that they face, and consequently the country," said Shapiro, of NDN, a think tank formerly known as the New Democratic Network, "is the separation between what might be economically necessary and what is politically acceptable.

Obama says US economy sound, reassures investors

WASHINGTON – President Barack Obama on Saturday downplayed divisions between the U.S. and Europe over how to tackle the world's financial crisis and said China should have "absolute confidence" that its sizable investments in the United States are safe.

In a conversation focused heavily on the economy, Obama met in the Oval Office with Brazilian President Luiz Inacio Lula da Silva. It was the latest in a series of talks the president has had with his counterparts around the world before a pair of international meetings where the economic crisis will dominate.

Both leaders will attend the Group of 20 countries summit in London on April 2, and the Summit of the Americas in Trinidad in mid-April.

Obama said the notion that the U.S. and Europe are already taking sides, with America pushing for more stimulus spending and European nations favoring tighter regulation of the financial industry, is a "phony debate."

"I can't be clearer in saying that there are no sides," Obama told reporters after the meeting. He said a full range of approaches, including stimulus spending such as his own recently enacted $787 billion package, and financial regulation, are needed to help revive the global economy.

Financial regulation "is front and center" among the issues he wants to deal with, he said.

"In my mind, at least, there is no conflict or contradiction between the positions of the G-20 countries and how we're going to be moving forward," Obama said, adding that differences in details were being worked out. "I expect to have a productive meeting."

Treasury Secretary Timothy Geithner, who had pushed for Europe to match Washington's $787 billion package of spending and tax cuts, said Saturday that there was "broad consensus globally on the need to act aggressively to restore growth to the global economy. Geithner spoke in London at a prepratory meeting of finance officials from the rich and developing G-20 countries

Obama speaks of ending cycle of job losses

COLUMBUS, Ohio – President Barack Obama says he won't accept a future of job losses for the United States.

Addressing a graduating class of new police officers in Ohio, the president talked about Friday's grim government report — a spike in the unemployment rate to 8.1 percent and 651,000 jobs lost in February.

Obama said the job numbers underscore the importance of his economic stimulus package that Congress passed with just a few Republican votes.

He said some critics called the plan unwise and unnecessary. He said government leaders have a responsibility to act for future generations.

Obama said the nation has met every challenge with bold action and big ideas and "that's what fueled a shared and lasting prosperity."

Obama challenges lobbyists to legislative duel

WASHINGTON – President Barack Obama challenged the nation's vested interests to a legislative duel Saturday, saying he will fight to change health care, energy and education in dramatic ways that will upset the status quo.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long," Obama said in his weekly radio and video address. "But I don't. I work for the American people."

He said the ambitious budget plan he presented Thursday will help millions of people, but only if Congress overcomes resistance from deep-pocket lobbies.

"I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight," Obama said, using tough-guy language reminiscent of his predecessor, George W. Bush. "My message to them is this: So am I."

The bring-it-on tone underscored Obama's combative side as he prepares for a drawn-out battle over his tax and spending proposals. Sometimes he uses more conciliatory language and stresses the need for bipartisanship. Often he favors lofty, inspirational phrases.

On Saturday, he was a full-throated populist, casting himself as the people's champion confronting special interest groups that care more about themselves and the wealthy than about the average American.

Some analysts say Obama's proposals are almost radical. But he said all of them were included in his campaign promises. "It is the change the American people voted for in November," he said.

Nonetheless, he said, well-financed interest groups will fight back furiously.

Insurance companies will dislike having "to bid competitively to continue offering Medicare coverage, but that's how we'll help preserve and protect Medicare and lower health care costs," the president said. "I know that banks and big student lenders won't like the idea that we're ending their huge taxpayer subsidies, but that's how we'll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won't like us ending nearly $30 billion in tax breaks, but that's how we'll help fund a renewable energy economy."

Passing the budget, even with a Democratic-controlled Congress, "won't be easy," Obama said. "Because it represents real and dramatic change, it also represents a threat to the status quo in Washington."

Obama also promoted his economic proposals in a video message to a group meeting in Los Angeles on "the state of the black union."

"We have done more in these past 30 days to bring about progressive change than we have in the past many years," the president in remarks the White House released in advance. "We are closing the gap between the nation we are and the nation we can be by implementing policies that will speed our recovery and build a foundation for lasting prosperity and opportunity."

Congressional Republicans continued to bash Obama's spending proposals and his projection of a $1.75 trillion deficit this year.

Almost every day brings another "multibillion-dollar government spending plan being proposed or even worse, passed," said Sen. Richard Burr, R-N.C., who gave the GOP's weekly address.

He said Obama is pushing "the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible."

Combative Obama vows to fight for his budget

WASHINGTON (Reuters) – A combative President Barack Obama warned on Saturday he was bracing for a fight against powerful lobbyists and special interests who sought to pick apart the $3.55 trillion budget he wants to advance his agenda of reform.

Obama's spending blueprint, with its massive $1.17 trillion deficit and tax hikes on the wealthy, seeks to squeeze billions of dollars in savings out of current spending through competitive bidding among health insurers and ending subsidies and tax breaks for banks, agribusiness and oil companies.

"These steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business," the president said in his weekly radio address.

"I know they're gearing up for a fight as we speak," he said. "My message to them is this: So am I."

Republicans, in their radio response, warned that Democratic spending priorities threaten to destroy the American dream that hard work can build a better life for each successive generation of citizens.

"This week, the president submitted to Congress the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible," said Senator Richard Burr.

He said Obama's budget commits the government to a billion dollars a day in interest on the debt over the next decade.

"Now, instead of working hard so our children can have a better life tomorrow, we are asking our children to work hard so that we don't have to make tough choices today," Burr said.

Obama said his budget blueprint delivered on the changes he promised in his election campaign: tax cuts for 95 percent of working Americans, a rollback in tax breaks for people making over $250,000, lower healthcare costs, education reform and an expansion in the use of clean, renewable energy.

The president said his budget also reflected the fact the United States faces a financial crisis, a costly recession and a trillion dollar deficit.

"Given this reality, we'll have to be more vigilant than ever in eliminating the programs we don't need in order to make room for the investments we do need," he said.

He said a page-by-page examination of the federal budget had already identified $2 trillion in potential savings over 10 years.

"I realize that passing this budget won't be easy," Obama said. "Because it represents real and dramatic change, it also represents a threat to the status quo in Washington."

The insurance industry would not like having to bid competitively to participate in the Medicare coverage program for the elderly, but it is needed to protect the program and reduce costs, Obama said.

He said banks and big student lenders would not like losing their taxpayer subsidies, but it would save nearly $50 billion and make college more affordable.

And he said oil and gas companies wouldn't like losing $30 billion in tax breaks, but it was needed to fund renewable energy research.

"The system we have now might work for the powerful and well-connected interests that have run Washington for far too long, but I don't. I work for the American people," Obama said.

"I didn't come here to do the same thing we've been doing or to take small steps forward, I came to provide the sweeping change that this country demanded when it went to the polls in November."

Obama picks Sebelius as health secretary

WASHINGTON (Reuters) – President Barack Obama will nominate Kansas Governor Kathleen Sebelius to head the Department of Health and Human Services, a U.S. official said on Saturday.

Sebelius has accepted Obama's offer and the president will formally announce the nomination on Monday afternoon at the White House, the official said, speaking on condition of anonymity.

(Reporting by David Alexander; Editing by Eric Walsh)

Marine One Spending Under Fire

President Obama has talked tough about the need to shed wasteful spending. But will he practice what he preaches? His one-time rival, Sen. John McCain, brought up a pricey presidential project that seems a bit unnecessary — a fleet of 28 new Marine One helicopters that will cost taxpayers around $11.2 billion.

At a recent summit to cut the federal deficit, Sen. McCain suggested that if President Obama wants to help the economy, perhaps he should consider canceling the order. Obama replied that he's already looking into it. Obama then joked that perhaps he's been unknowingly deprived all his life, but his current Marine One chopper seems just fine to him. CNN is reporting that the new helicopters, which were originally ordered by President George W. Bush not long after 9/11, are now on hold (though not officially cancelled...yet).

Naturally, all this talk of gazillion-dollar equipment has people searching. Folks are desperate to know more about the fancy helicopters, what they can do, and why they cost such an exorbitant sum of cash. Queries immediately surged on "marine one photos" and "why is it called marine one." Regarding the second inquiry: It's called Marine One only when the president is aboard.

As for why the president needs 28 of them — apparently, it's a safety precaution. When flying in Marine One, identical choppers travel next to the president's ride. Trickery throws off the bad guys.

But why in the world do these contraptions cost $400 million each? After all, isn't a helicopter just a helicopter? Apparently not. The Washington Post explains that the proposed fleet would be outfitted with "cutting-edge communications equipment, antimissile defenses and hardened hulls." Oh, and a kitchen. You can't forget that.

Analysis: Obama address renews audacity to hope

WASHINGTON – President Barack Obama gave America the audacity to hope again.

After describing the U.S. economy in nearly apocalyptic terms for weeks, pushing his $787 billion stimulus plan through Congress, the president used his address to Congress on Tuesday night to tap the deep well of American optimism — the never-say-die spirit that every president tries to capture in words. And great presidents embody.

"We will rebuild. We will recover, and the United States of America will emerge stronger than before," Obama said, echoing Franklin Delano Roosevelt and Ronald Reagan.

"The answers to our problems don't lie beyond our reach," Obama said. "What is required now is for this country is to pull together, confront boldly the challenges we face, and take responsibility for our future once more."

The themes of responsibility, accountability and, above all, national community rang throughout an address carefully balanced by the gravity of its times. Job losses. Home foreclosures. Credit crisis.

Obama says he will raise pay for troops

WASHINGTON – President Barack Obama says he wants to raise the pay of America's fighting forces and improve health care and benefits for veterans.

The president also says he will soon announce a way to responsibly end the war in Iraq — and a new path for the war in Afghanistan.

Defense and foreign policy were a small part of Obama's first address to Congress, which focused on the economic crisis.

Obama says his plan to close the Guantanamo Bay prison will make America stronger. Ands the president says he will seek what he calls swift and certain justice for terrorists, and vows anew not to allow terrorists a haven to plot against the United States

Official: Obama wants to halve budget deficit

WASHINGTON – Barack Obama wants to cut the federal deficit in half by the end of his first term, mostly by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government, an administration official said Saturday as the president worked to finalize his first budget request.

Obama's proposal for the 2010 fiscal year that begins Oct. 1 projects that the estimated $1.3 trillion deficit he has inherited from former President George W. Bush will be halved to $533 billion by 2013. That's a difference of 9.2 percent of the overall economy now vs. 3 percent in four years.

"We can't generate sustained growth without getting our deficits under control," Obama said in his weekly radio and Internet address that seemed to preview his intentions. He said his budget will be "sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline."

He's expected to outline some broad themes of his budget request Monday at a White House summit on fiscal policy and touch on it during his first speech to Congress on Tuesday evening. He is slated to officially send at least a summary of it to Congress on Thursday, barely a week after his $787 billion economic stimulus plan becoming law.

Obama's budget also is expected to take steps toward his campaign promises of establishing universal health care and lessening the country's reliance on foreign oil.

The official, who spoke on the condition of anonymity because the president has not yet released his budget, said Obama hopes to achieve his deficit-reduction goal by generating savings as he follows through on three core campaign promises over the next four years.

He has pledged to wind down the Iraq war by withdrawing most combat troops within 16 months of taking office. He also has said he would let the temporary Bush tax cuts expire in 2011 for people making more than $250,000 a year, effectively raising taxes on those people. And, he has vowed to scale back spending and improve government efficiency by eliminating programs that don't work.

The budget projections suggest that Obama hasn't backed off of any of those priorities, despite relatively little movement on them and at least one misstep in his first month in office as he concentrated on lobbying for the economic stimulus plan and rescuing the housing, auto and financial sectors.

Pentagon officials still are trying to determine exactly how to scale back the U.S. troop commitment in Iraq. The president's sweeping economic plan didn't include any of the tax increases Obama, as a candidate, had said he would impose on wealthy taxpayers. And, Nancy Killefer, his selection for a newly created position charged with eliminating inefficient government programs, withdrew amid personal tax issues.

Cutting the deficit by half in a mere four years is a lofty goal at any time, let alone in such dire economic circumstances. The question is whether Obama can do it while also turning around a recession now well into its second year.

Obama has pledged to make deficit-reduction a priority both as a candidate and a president. But he also has said economic recovery must come first.

In his first month in office, he has overseen enormous amounts of spending aimed at stabilizing the economy, reversing the recession and heading off even more turmoil.

Last week, he signed into law the $787 billion stimulus measure that is meant to create jobs but certainly will add to the nation's skyrocketing national debt. He also is implementing the $700 billion financial sector rescue passed on Bush's watch; about $75 billion of it is being used toward Obama's plan to help homeowners facing foreclosure. At the same time, the administration is weighing requests by General Motors Corp. and Chrysler LLC for an additional $21.6 billion. The ailing automakers already have received a combined $17.4 billion in federal loans.

Yet, even as he's spending a ton of taxpayer money, Obama also is pressing the need for getting "exploding deficits" under control.

The nonpartisan Congressional Budget Office says that this year's budget deficit will be at least a record $1.2 trillion — about two times that of the year before. That total includes financial bailouts and rescue plans Congress approved since last Oct. 1, the start of the government's budget year, but not Obama's hefty stimulus package that's now law.

Some private economists are forecasting that the budget deficit for the current year will hit $1.6 trillion. And, the Treasury Department has said that the recession and massive costs for the $700 billion financial bailout have pushed the federal deficit to an all-time high for the first four months of the budget year.

Obama's budget director, Peter Orszag, told lawmakers recently that even after the economy recovers, annual deficits could reach $750 billion or so and steadily exceed $1 trillion by the end of the next decade. And, Obama himself has said, without decisive action, "trillion-dollar deficits will be a reality for years to come."

Obama's Tuesday speech a broad look at economy

WASHINGTON – For President Barack Obama, it's a chance to take a deep breath and paint a big picture after a first month of gargantuan economic proposals, legislative accomplishments and Cabinet missteps.

The president addresses a joint session of Congress Tuesday night, giving a State of the Union-like speech. It lacks the formality of that title only because he's not considered to have had enough time in the White House yet to deliver a full status report.

Regardless, it is one of the most high-profile trappings of the presidency: traveling to the Capitol to speak to representatives of the entire federal government, with the public watching in prime time, about his agenda.

With the recession well into its second year, expect the remarks to be longer on the economy than on foreign affairs. The economy is in just too bad shape for Obama to do anything other than focus mostly on what he's already trying to do about job losses and dwindled savings and frozen credit, as well as what else he has in mind.

The president is expected to show Americans how all the pieces fit together to make the economy sound again. There's the $787 billion just-signed stimulus bill, plus an even more expensive mix of rescues for the financial industry, auto companies and troubled mortgage holders.

He will touch on other priorities he says fit into the bigger picture. Potentially eye-popping expensive plans to broaden health care coverage to eventually insure everyone. Moving the country toward greener energy sources. Expanding education opportunities. Overhauling financial industry regulation.

And, he is all but certain to talk about the national debt and budget woes, stressing the need to get what he calls "exploding deficits" under control by controlling spending. His upcoming budget request will include his goal to slice the estimated $1.3 trillion annual deficit in half by the end of his first term.

"We cannot successfully address any of our problems without addressing them all," Obama said Saturday in his weekly radio and video address. "The road ahead will be long and full of hazards. But I'm confident that we, as a people, have the strength and wisdom to carry out this strategy and overcome this crisis."

Sober themes of responsibility, accountability and transparency are to be woven throughout the speech.

White House press secretary Robert Gibbs summed up Obama's message this way: "We all have a special responsibility to do what we can to put this country back on the right track and to see it through back to prosperous and better days."

Come Tuesday night, Obama will face a Congress that's still fiercely partisan despite efforts to court Republicans.

The Democratic president has achieved three big legislative accomplishments so far, on equal pay, children's health care and the economic package. Each was shaped mostly by Democrats and largely passed along party line.

Yes, his economic rescue effort would have died if not for three moderate senators who broke from the GOP. But overall, his attempts to court the GOP have been mixed.

So, too, his success at rounding out a Cabinet.

He still needs a health secretary. Former Senate Majority Leader Tom Daschle withdrew amid tax problems.

He is missing a commerce secretary. His second choice for the job, Sen. Judd Gregg, R-N.H., changed his mind after first saying yes.

Also, the Senate has not confirmed his labor nominee. Rep. Hilda Solis' nomination has been held up over questions about tax liens her husband recently paid.

Obama reassures Canada on open trade

OTTAWA (Reuters) – President Barack Obama on Thursday assured Canada, his country's biggest trading partner, that he would not pursue protectionist policies, and the two neighbors agreed to cooperate on cleaner energy technology.

Obama, on his first trip abroad as president, sought in talks with Prime Minister Stephen Harper to allay Canadian concerns raised by a "Buy American" clause in a $787 billion U.S. economic recovery plan he signed this week.

"Now is a time where we have to be very careful about any signals of protectionism," Obama told a joint news conference after several hours of talks with Harper on his one-day visit to Ottawa.

"And as obviously one of the largest economies in the world, it's important for us to make sure that we are showing leadership in the belief that trade ultimately is beneficial to all countries," he said.

He stressed the United States would meet its international trade obligations and told Harper he wanted to "grow trade not contract it."

"I'm quite confident that the United States will respect those obligations and continue to be a leader on the need for globalized trade," Harper said afterward.

Harper said he was willing to look at strengthening the environmental and labor provisions of the North American Free Trade Agreement, something Obama has said he wants. But the Canadian leader said he did not support renegotiating the agreement, which has boosted trade between the two countries.

The two sides announced they would collaborate on environmentally friendly technologies that would help them develop an electricity grid fueled by clean, renewable energy and to tap their vast fossil fuel resources with less pollution. The technology is not cost-effective now.

"How we produce and use energy is fundamental to our economic recovery, but also our security and our planet. And we know that we can't afford to tackle these issues in isolation," Obama said, adding there was "no silver bullet" solution.

GOING FURTHER ON CLIMATE

Environmentalists want Obama to go further and pressure Canada to clean up its oil sands in the western province of Alberta, from which oil is extracted in a process that spews out large amounts of greenhouse gases.

"Tar sands create three times the global warming pollution as conventional oil and are not a viable alternative, no matter how the Canadian government and oil industry portray it," said Susan Casey-Lefkowitz of the International Program Natural Resources Defense Council.

But with his country facing its worst economic crisis in decades, Obama stressed the importance of Canada as the United States' largest energy provider. Most of the output of the oil sands is destined for U.S. markets.

Despite the agreement to stimulate the development of green energy, Harper said it was too early for the countries to talk about a shared strategy for reducing greenhouse gas emissions.

Obama, who took office last month, campaigned on a pledge to reduce U.S. emissions by 80 percent of 1990 levels by 2050.

In contrast to a passive approach by his predecessor, George W. Bush, Obama is committed to tackling global warming, but he said climate change initiatives must be balanced against economic considerations in the midst of a worldwide recession.

A White House official said the joint U.S.-Canadian green energy initiative would work on "elements like carbon capture and sequestration and the smart grid."

Carbon dioxide is the main greenhouse gas blamed by scientists for warming the Earth. Carbon sequestration, which is not yet commercially viable, involves capturing the gas and storing it underground before it enters the atmosphere.

On Afghanistan, where Canada has 2,700 troops as part of a NATO-led force fighting a growing insurgency, Obama said he had not asked for more military help. Obama ordered 17,000 new U.S. troops there this week to battle the insurgency.

Harper said Ottawa, which plans to withdraw its troops in 2011, would expand economic aid to Afghanistan, already Canada's biggest foreign recipient of aid.

Obama to sign $787 billion stimulus bill Tuesday

WASHINGTON – Savoring his first big victory in Congress, President Barack Obama on Saturday celebrated the newly passed $787 billion economic stimulus bill as a "major milestone on our road to recovery."

Speaking in his weekly radio and Internet address, Obama said, "I will sign this legislation into law shortly, and we'll begin making the immediate investments necessary to put people back to work doing the work America needs done."

At the same time, he cautioned, "This historic step won't be the end of what we do to turn our economy around, but rather the beginning. The problems that led us into this crisis are deep and widespread, and our response must be equal to the task."

The bill passed Congress on Friday on party-line votes, allowing Democratic leaders to deliver on their promise of clearing the legislation by mid-February. Obama could sign the measure as early as Monday.

"It will take time, and it will take effort, but working together, we will turn this crisis into opportunity and emerge from our painful present into a brighter future," the president said.

Obama "now has a bill to sign that will create millions of good-paying jobs and help families and businesses stay afloat financially," said Sen. Max Baucus, a Montana Democrat who was a leading architect of the measure.

"It will shore up our schools and roads and bridges, and infuse cash into new sectors like green energy and technology that will sustain our economy for the long term," he added in a statement.

Hours earlier, Senate Republican Leader Mitch McConnell offered a different prediction for a bill he said was loaded with wasteful spending.

"A stimulus bill that was supposed to be timely, targeted and temporary is none of the above," he said in remarks on the Senate floor. "And this means Congress is about to approve a stimulus that's unlikely to have much stimulative effect."

Alaska Sen. Lisa Murkowski, in the GOP radio address Saturday, contended Democrats settled "on a random dollar amount in the neighborhood of $1 trillion and then set out to fill the bucket."

Obama, who was spending the weekend in Chicago, planned to fly back to Washington on Monday. His schedule for the week ahead includes trips to Denver on Tuesday to talk about his economic agenda and a visit to Phoenix on Wednesday to present a plan to fight foreclosures.

In a struggle lasting several weeks, lawmakers in the two political parties both emphasized they wanted to pass legislation to revitalize the economy and ease frozen credit markets. But the plan that the administration and its allies eventually came up drew the support of only three Republicans in Congress — moderate Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania.

Their support was critical, though, in helping the bill squeak through the Senate on a vote of 60-38, precisely the number needed for passage. Democratic Sen. Sherrod Brown cast the 60th vote in favor in a nearly deserted Senate, hours after the roll call began. He arrived after a flight aboard a government plane from Ohio, where he was mourning the death of his mother earlier in the week.

The House vote was 246-183.

The legislation, among the costliest ever considered in Congress, provides billions of dollars to aid victims of the recession through unemployment benefits, food stamps, medical care, job retraining and more. Tens of billions are ticketed for the states to offset cuts they might otherwise have to make in aid to schools and local governments, and there is more than $48 billion for transportation projects such as road and bridge construction, mass transit and high-speed rail.

Democrats said the bill's tax cuts would help 95 percent of all Americans, much of the relief in the form of a break of $400 for individuals and $800 for couples. At the insistence of the White House, people who do not earn enough money to owe income taxes are eligible, an attempt to offset the payroll taxes they pay.

In a bow to political reality, lawmakers included $70 billion to shelter upper middle-class and wealthier taxpayers from an income tax increase that would otherwise hit them, a provision that the nonpartisan Congressional Budget Office said would do relatively little to create jobs.

Also included were funds for two of Obama's initiatives, the expansion of computerized information technology in the health care industry and billions to create green jobs the administration says will begin reducing the country's dependence on foreign oil.

Friday's events capped an early period of accomplishment for the Democrats, who won control of the White House and expanded their majorities in Congress in last fall's elections.

Since taking office on Jan. 20, the president has signed legislation extending government-financed health care to millions of lower-income children who lack it, a bill that President George W. Bush twice vetoed. Obama also has placed his signature on a measure making it easier for workers to sue their emplo

House and expanded their majorities in Congress in last fall's elections.

Since taking office on Jan. 20, the president has signed legislation extending government-financed health care to millions of lower-income children who lack it, a bill that President George W. Bush twice vetoed. Obama also has placed his signature on a measure making it easier for workers to sue their employers for alleged job discrimination, effectively overturning a ruling by the Supreme Court's conservative majority.

President seeks grass-roots support for stimulus

WASHINGTON – President Barack Obama faces a barrage of questions on his plans to reinvigorate the economy with a massive stimulus bill and additional billions in bailout money for the financial markets.
Trips Monday and Tuesday to cities hurting under the economic meltdown and a prime-time news conference Monday night show that Obama and his advisers are worried about a looming Senate vote on the stimulus bill, which failed to gather meaningful Republican support during rare weekend debate. The question-and-answer sessions with citizens and later with news reporters will allow Obama to appeal directly for grass-roots backing of his plans.
Both trips were added to Obama's schedule as difficulties with the legislation on Capitol Hill increased. Originally, aides had insisted his time would be better spent in Washington to shepherd the bill rather than traveling the more traditional presidential route around the country, pressuring lawmakers from his bully pulpit.

The $827 billion Senate version of the plan was expected to pass the Senate on Tuesday. However, it must be reconciled with the House version, which totaled $820 billion in spending and tax cuts. With Senate and House negotiators preparing to deal, Obama is likely to push for a bill on his desk for his signature by mid-month.

To focus on the stimulus bill, the Obama administration postponed to Tuesday the unveiling of the second part of the $700 billion bailout of the financial industry. Instead, Obama focused on campaigning for the stimulus bill with his trips to areas hit hard by the economic crisis.

Two key players in crafting the version now before the Senate — Maine Republican Susan Collins and Nebraska Democrat Ben Nelson — said Monday morning they believe this is the best that can be achieved in the current circumstances.

"This bill is not perfect," Collins acknowledged in a nationally broadcast interview. "We're not claiming that. But in fact I think this bill will help to create 3.5 million jobs. ... We're facing a crisis and it makes no sense to have a partisan divide."

She said the measure on balance is "a good bill. It is needed and I think it will make a difference."

Appearing with Collins on NBC's "Today" show, Nelson said, "I think the things we have focused on will help turn this economy around."

The House and Senate bills overlap in many ways, but the Senate bill has a greater emphasis on tax cuts, while the House bill devotes more money to states, local governments and schools. The differences are likely to mean difficult negotiations when House and Senate conferees meet later in the week to try to reconcile the two measures.

The Senate stripped $108 billion in spending, including $40 billion in aid to state governments for education and other programs. The bill retained items that also probably won't do much for the economy, such as spending $1 billion to fix problems with the 2010 Census.

Still, the bill retained the core of Obama's plan to combine hundreds of billions of dollars in spending to boost consumption by the public sector with tax cuts designed to increase consumer spending. Much of the new spending would be for victims of the recession, in the form of extending unemployment insurance through the end of the year and increasing benefits by $25 a week, free or subsidized health care, and increased food stamp payments.

"The president's top man on the economy is the president," Larry Summers, the chairman of the White House National Economic Council, said on "Fox News Sunday." Summers added: "He listens to advice from all of us, and he sets his direction."

For his first direct pitch to citizens, Obama scheduled a town hall meeting in Elkhart, Ind. He was to return to Washington for the news conference Monday night. On Tuesday he plans to visit Fort Myers, Fla., an area hit hard by foreclosures.

"Americans across this country are struggling, and they are watching to see if we're equal to the task before us. Let's show them that we are. And let's do whatever it takes to keep the promise of America alive in our time," Obama said in his weekly radio and Internet address.

The Elkhart-Goshen region in northern Indiana saw its unemployment rate soar to 15.3 percent in December, up a whopping 10.6 percentage points from December 2007. The region has been bruised by layoffs in the recreational vehicle industry. Hundreds of workers have lost their jobs at RV makers such as Monaco Coach Corp., Keystone RV Co. and Pilgrim International.

White House spokesman Robert Gibbs said the meeting would give the president a chance to hear Americans' concerns about the bill, which was set to have a key vote in the Senate on Monday afternoon.

"I think this is another chance for the president to talk directly to the American people about what he thinks is at stake," Gibbs said. "Watching millions lose their jobs, and having in front of Congress — and hopefully in front of him soon — a plan to save or create millions more jobs and get people back to work, putting money in people's pockets, getting help for state and local governments so they don't have to lay off firefighters or teachers or police officers."

Stimulus package faces Senate procedural vote

WASHINGTON – The economic stimulus package is poised to move forward in the Senate today. The $827 billion package seems assured to clear a key procedural hurdle, but not by much. Just three Republicans are expected to join Democrats in supporting the package, barely giving it the 60 votes needed.

Most Republicans will vote no, unhappy not only at the pricetag, but also that they weren't more involved in putting the package together.

Final Senate approval will set the stage for what could be tough negotiations to iron out differences with the House over tax cuts and spending.

Republican congressional leaders and a key House Democrat are voicing misgivings — but for different reasons — over the Senate version of an economic recovery plan costing more than $800 billion.

Sen. John Ensign of Nevada and Rep. Mike Pence of Indiana, both members of Republican leadership teams, complain that the legislation has too much spending and not enough in tax cuts.

A top House Democrat, Rep. Barney Frank of Massachusetts, says the Senate bill cuts spending necessary to protect the jobs of policemen and firefighters.

The Senate cut $40 billion in aid to state governments contained in a House version of the legislation.

The Senate is expected to pass its bill on Tuesday. It then has to be reconciled with the House version.

Ensign, Pence and Frank spoke on NBC's "Meet the Press."

Obama set for first White House news conference

WASHINGTON (AFP) – President Barack Obama Monday aims to grab back lost momentum with his first White House press conference and a trip to unemployment-blighted Indiana with his stimulus plan facing a key Senate test.

Obama hopes to drive the 800 billion dollar plus package through Congress before the end of the week, and is warning of an imminent economic catastrophe if his self-imposed deadline is allowed to slip.

His campaign-style blitz, with a quick trip to 2008 electoral battleground Indiana before the 8 pm (0100 GMT) press conference is a key test of Obama's leverage after insurgent Republicans hijacked the stimulus debate last week.

It will also allow him to take his case for the plan directly to American voters who gave him a mandate for change last November, after spending the first three weeks of his presidency largely lobbying lawmakers in Washington.

Obama will Monday travel to Elkhart, Indiana, which has been hammered by the economic crisis, where the unemployment rate has rocketed from 4.7 percent to 15.3 percent over the last year.

He is set to hold a town-hall style meeting similar to the scores of such events he took part in during two years on the campaign trail, a day before a similar planned event in a suffering corner of Florida.

Obama is expected to highlight the painful job losses in Elkhart and also point to a sheaf of infrastructure projects included in the stimulus bill which he says will create or safeguard more than three million jobs nationwide.

On Saturday, the president welcomed signs of a tentative deal by senators on the stimulus plan, following news that the US economy shed a staggering 598,000 jobs in January.

"If we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe," Obama said.

The Democratic-led Senate was Monday expected to decide on a key procedural motion to override Republican blocking tactics and put the package to a full vote, possibly Tuesday.

The Democrats control 58 votes in the Senate and need 60 to break through a Republican "filibuster." They appear to have the support of at least three Republican moderates -- Susan Collins, Olympia Snowe and Arlen Specter.

Despite the outlines of a compromise brokered with the help of the centrist Republicans, senior opposition senators were adamant that Obama's mix of infrastructure spending and tax cuts would prove a massive waste of money.

"We are going down a road to financial disaster. We'll pay dearly," Richard Shelby, the top Republican on the Senate's banking committee, told CNN Sunday.

"Until we straighten out our banking system ... this economy is going to continue to tank," the Alabama senator added.

Obama to detail compensation limits on executives

WASHINGTON – Call it the maximum wage. President Barack Obama wants to impose a $500,000 pay cap on executives whose firms receive government financial rescue funds, a dramatic intervention into corporate governance in the midst of financial crisis.

The new restrictions, described by an administration official familiar with the new rules, are to be announced Wednesday morning at the White House. The steps set the stage for the administration's unveiling next week of a new framework for spending the money that remains in the $700 billion financial rescue fund.

"If the taxpayers are helping you, then you've got certain responsibilities to not be living high on the hog," President Barack Obama said Tuesday.

The official, speaking on the condition of anonymity because the plan had not yet been made public, said the most restrictive limits would apply only to struggling large firms that receive "exceptional assistance" in the future. Healthy banks that receive government infusions of capital would have more leeway.

Firms that want to pay executives above the $500,000 threshold would have to compensate them with stock that could not be sold or liquidated until they pay back the government funds, the official said.

The president and members of Congress have been weighing various proposals to restrict chief executives' compensation as one of the conditions of receiving help under the $700 billion financial bailout fund. The desire for limits was reinforced by revelations that Wall Street firms paid more than $18 billion in bonuses in 2008 even while struggling with the economic downturn.

Banks and other financial institutions that receive capital infusions, but are considered healthy, could waive the $500,000 salary cap and the stock restrictions under the new Obama rules. But the companies would have to disclose the compensation and submit the pay plan to shareholders for a nonbinding vote.

The administration will also propose long-term compensation restrictions even for companies that don't receive government assistance.

According to the official, the proposals include:

• Requiring top executives at financial institutions to hold stock for several years before they can cash out.

• Requiring nonbinding "say on pay" resolutions — that is, giving shareholders more say on executive compensation.

• A Treasury-sponsored conference on a long-term overhaul of executive compensation.

Top officials at companies that have received money from the government's Troubled Asset Relief Program already face some compensation limits. But elected officials want to place more caps.

"I do know this: We can't just say, 'Please, please,'" said Sen. Claire McCaskill, D-Mo., who has proposed that no employee of an institution that receives money under the $700 billion federal bailout can receive more than $400,000 in total compensation until it pays the money back.

The figure is equivalent to the salary of the president of the United States.

Compensation experts in the private sector have warned that such an intrusion into the internal decisions of financial institutions could discourage participation in the rescue program and slow down the financial sector's recovery. They also argue that it could set a precedent for government regulation that undermines performance-based pay.

"It's not a government takeover," Obama stressed in an interview Tuesday with CNN. "Private enterprise will still be taking place. But people will be accountable and responsible."

Even some Republicans, angered by company decisions to pay bonuses and buy airplanes while receiving government help, have few qualms about restrictions.

"In ordinary situations where the taxpayers' money is not involved, we shouldn't set executive pay," said Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee.

"But where you've got federal money involved, taxpayers' money involved, TARP money involved, and the way they have spent it, with no accountability, is getting close to being criminal.

Obama economic plan now tops $900B

WASHINGTON – The cost of President Barack Obama's economic recovery plan now exceeds $900 billion after the Senate added money for medical research and tax breaks for car purchases.

It could go higher Wednesday if a tax break for homebuyers is made more generous, even as centrists in both parties promise to clear away spending items that won't jump-start the economy immediately.

In an interview on CNN, Obama signaled a willingness to drop items that "may not really stimulate the economy right now." He also signaled he'll try to remove "buy American" provisions in the legislation to avoid a possible trade war.

In a victory for auto manufacturers and dealers, Sen. Barbara Mikulski, D-Md., won a 71-26 vote to allow most car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans. The break would cost $11 billion over the coming decade but could mean savings of $1,500 on a $25,000 car.

"Just as we need to get the housing market going, we need to get auto sales going," said Sen. Debbie Stabenow, D-Mich.

Wednesday's session could produce even more generous savings for homebuyers.

Sen. Johnny Isakson, R-Ga., is pressing for a tax credit of up to $15,000 for everyone who buys a home this year, at a cost of $18.5 billion. The pending measure would award a $7,500 tax credit only to first-time homebuyers.

At the same time, centrist senators, including Ben Nelson, D-Neb., and Susan Collins, R-Maine, are seeking to cut tens of billions of dollars from the legislation. They're operating with the blessing of Democratic leaders, who hope a successful effort could attract some GOP votes for Obama's plan.

Obama summoned Collins to a White House meeting Wednesday afternoon, a Collins aide said.

Democratic leaders conceded they may soon be obliged to cut billions of dollars from the measure. "It goes without saying if it's going to pass in the Senate, it has to be bipartisan," said Sen. Dick Durbin of Illinois, the second-ranking Democratic leader, adding that rank-and-file lawmakers in both parties want to reduce the cost of the bill.

In a series of skirmishes Tuesday, the Senate turned back a proposal to add $25 billion for public works projects and voted to remove a $246 million tax break for movie producers. Both moves were engineered by Republicans who are critical of the bill's size and voice skepticism of its ability to create jobs.

But several hours later, GOP conservatives didn't contest approval of a $6.5 billion increase in research funding for the politically popular National Institutes of Health. That amendment, by Tom Harkin, D-Iowa, drove the price tag of Obama's plan just above $900 billion.

Democratic leaders have pledged to have the bill ready for Obama's signature by mid-month, and in a round of network television interviews Tuesday, the president underscored the urgency. He told CNN that even three months ago, most economists would not have predicted the economy was "in as bad of a situation as we are in right now."

He also spoke out against efforts to require the use of domestic steel in construction projects envisioned in the bill, telling Fox News, "We can't send a protectionist message."

Mikulski's office put the cost of the automobile tax break she sponsored at $11 billion over 10 years. It would apply to the first $49,500 in the price of a new car purchased between last Nov. 12 and Dec. 31, 2009. Individuals with incomes of up to $125,000 and couples earnings as much as $250,000 could qualify, including those who do not itemize their deductions.

Republicans are expected to seek a vote later in the week on a plan to inject the government into the mortgage industry in an attempt to drive down interest rates on mortgages to as low as 4 percent. Democrats treaded carefully on the proposal, saying they would consider it but also claiming the $300 billion Republicans allocated would not come close to accommodating the demand.

Obama open to compromise on $825B stimulus bill

WASHINGTON – On the eve of a key vote, President Barack Obama privately promised Republicans he stands ready to accept changes in the $825 billion economic stimulus legislation, invoked Ronald Reagan to rebut conservative critics and urged lawmakers to "put politics aside" in the interest of creating jobs.
"The American people expect action," Obama said Tuesday as he shuttled between closed-door meetings with House and Senate Republicans on a trip to the Capitol that blended substance with political symbolism.
Republicans who attended the sessions said the president did not agree to any specific changes but did pledge to have his aides consider some that GOP lawmakers raised dealing with additional tax relief for businesses.
Prodded to budge on another point, Obama said that despite opposition, he will insist on giving relief to wage-earners who pay Social Security taxes but do not earn enough to owe income tax. His spokesman said the president reminded his critics that former President Reagan — conservative hero to many contemporary Republicans — supported the same concept while in the White House.
In a measure of the complex political dynamic in Congress, House Republican leaders urged their rank and file to oppose the stimulus measure hours before Obama arrived.
One Republican later quoted the president as saying any changes would have to come after the House gives what is expected to be largely party-line approval Wednesday to the Democratic-backed bill. Debate began late in the day on the measure, which includes about $550 billion in spending and roughly $275 billion in tax cuts. Democrats made one small change, voting to delete $20 million intended for renovating the National Mall. Republicans had criticized the expenditure as wasteful.
In the Senate, traditionally more bipartisan than the House, a companion bill grew to roughly $900 billion. That included a new tax break for upper middle-income taxpayers, at a one-year cost of $70 billion. It was advanced by Sen. Chuck Grassley of Iowa, senior Republican on the Finance Committee.
Democratic leaders in both houses have promised to have legislation ready for Obama's signature by mid-February, and Tuesday's developments coincided with fresh evidence of deterioration in a national economy seemingly growing weaker by the day.
Housing prices tumbled by the sharpest annual rate on record in November, according to a closely watched private report released during the day, and a measure of consumer confidence dropped to a historic low.
Separately, the Treasury Department announced distribution of $386 million to 23 troubled banks, the first awards from the federal bailout fund since Obama took office a week ago.
Obama traveled to and from the Capitol in a snowy motorcade on Tuesday, far different from the inaugural parade seven days earlier. This was a business trip, marking his second reach across party lines in as many days in keeping with a pledge to seek bipartisan solutions to major problems.
On Monday, he leaned on House Democrats to jettison an item that would make it easier for states to provide family planning funds for the poor under Medicaid, a provision in the legislation that had become a target of ridicule for Republicans. Press Secretary Robert Gibbs said Obama supports the concept but wants it included in a different bill.
Ironically, Democrats said deleting the provision would wind up increasing federal spending, since it probably would mean more money spent on higher pregnancy and postnatal care.
House Republican leaders welcomed the president a few hours after urging their rank-and-file to oppose the stimulus bill, and it was far from clear that Obama had managed to pick up any GOP support during the day.
Gibbs said the White House expects some GOP lawmakers will vote for the measure on Wednesday in the House, and indicated he hopes there will be more in the Senate and even more later when a final compromise is reached.
One Republican senator, speaking on condition of anonymity, said the president pledged to Sen. John Ensign, R-Nev., to have aides review two specific proposals. One would affect businesses that pay down their debt. The other would provide a temporary tax holiday for companies that have money overseas and bring it back to the United States to invest.
Obama ventured into an uncertain political environment when he stepped into the Capitol, a president with high approval ratings pitching a plan that also has been favorably received in the polls.
Republicans, on the other hand, are trying to regroup after last fall's elections, in which they lost the White House as well as seats in both houses of Congress. While some conservatives seem eager to mount a frontal attack on Obama and his plans, others are pursuing a strategy of criticizing congressional Democrats rather than the president.
Hours earlier, according to officials who were present at a GOP meeting, none of the Republicans in attendance spoke up in disagreement when urged to oppose the legislation by their leaders. Rep. John Boehner of Ohio, the party's leader, and Eric Cantor of Virginia, the second in command, said they wanted "100 percent" opposition to the measure, which they argue includes billions in wasteful spending, these officials said.
Across the Capitol, Senate Republican leader Mitch McConnell suggested that Democrats in Congress were the problem, not the president.
"We think the country needs a stimulus," McConnell said on NBC's "Today" show. But he also said that he believes most people do not believe recovery can be accomplished through projects like "fixing up the Mall," a reference to funding to repair the National Mall in Washington.
He said Republicans want a bill that devotes 40 percent of its total to tax cuts.
Some conservatives were far more blunt.
"While the president was genial, his proposal remains rooted in a liberal, big-government ideology that ignores history," said Rep. Tom Price of Georgia, head of the conservative Republican Study Committee in the House.
Complicating the Republican position was evidence of support among the nation's governors for the legislation taking shape.
The measure includes more than $120 billion in aid to schools, some of it to protect them from the effects of state budget cuts in a time of recession. It also provides more than $80 billion additional funding for Medicaid, the state-federal program that provides health care for low-income people, and $40 billion more to help people who have recently lost their jobs hold onto employer-provided health care. Another $32 billion is ticketed for transportation projects, and $30 billion more for water projects and rail and mass transit.
Obama's centerpiece tax cut would provide $500 per worker and $1,000 per couple for low and middle-income wage earners, including those who do not earn enough to owe income taxes.

Celebration over, Obama plunges into workday one

WASHINGTON – On his first full day in the White House, Barack Obama stepped into the Oval Office for the first time as president and summoned economic advisers and top military officials to meetings aimed at making early progress on the change he promised.

A prayer breakfast at Washington National Cathedral and an open house at the presidential mansion were also on the schedule of the 44th president, taking office on a promise to fix the battered economy and withdraw U.S. troops from the unpopular war in Iraq on a 16-month timetable.

Obama's first White House meetings as president meshed with quickened efforts in Congress to add top Cabinet officials to the roster of those confirmed on Tuesday and to advance the economic stimulus measure that is a top priority of his administration.

Treasury Secretary-designate Tim Geithner was called before the Senate Finance Committee for a confirmation hearing certain to touch on his disclosure that he had only belatedly paid personal taxes owed earlier in the decade.

Separately, Sen. Hillary Rodham Clinton, D-N.Y., awaited confirmation as secretary of state. Republicans had refused to permit her confirmation on Tuesday when several other Cabinet officials were approved.

A new poll underscored the sense of anticipation that accompanied Obama into office.

The Associated Press-Knowledge Networks survey found that by a 3-1 margin, people feel more optimistic about the country's future now that Obama has been inaugurated, including 30 percent of Republicans.

"Tonight, we celebrate. Tomorrow, the work begins," Obama said Tuesday night at the Commander in Chief Ball, one of 10 official black-tie celebrations he whirled through with his wife Michelle.

After getting to the White House around 1 a.m., Obama ventured into the Oval Office for the first time as president around 8:30 a.m. Wednesday, presidential spokesman Robert Gibbs said.

The meeting with economic advisers, called for later in the day, came at a time when 11 million Americans are out of work and millions more feel the loss of savings and face the prospect of foreclosures on their homes.

Last week, Congress cleared the way for use of a second, $350 billion installment of financial-industry bailout money, a pre-inaugural victory for Obama.

Democratic leaders hope to have the $825 billion economic stimulus measure to his desk by mid-February.

"Fortunately, we've seen Congress immediately start working on the economic recovery package, getting that passed and putting people back to work," Obama said in an ABC News interview. "That's going to be the thing we'll be most focused on."

The war in Iraq that he has promised to end featured prominently in Obama's first day as well.

Defense Secretary Robert Gates and the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, were among those called in for the meeting as the new president assumed the role of commander in chief.

In his inaugural address on Tuesday, Obama said his goal was to "responsibly leave Iraq to its people and forge a hard-earned peace in Afghanistan."

The two unfinished wars are twinned for Obama. He has promised to bring U.S. combat troops out of Iraq within 16 months of taking office, as long as doing so wouldn't endanger either the Americans left behind for training and terrorism-fighting nor the security gains in Iraq. And he has said he would use that drawdown to bolster the U.S. presence in Afghanistan, where U.S.-backed fighters are losing ground against a resurgent Taliban.

Among the possibilities for early executive actions are: the naming of a Middle East envoy, critical at a time of renewed hostilities between Israelis and the Palestinians; an order closing the U.S. military prison at Guantanamo Bay, Cuba, a move that will take considerable time to execute and comes on the heels of a suspension of war crimes trials there pending a review; prohibiting — in most cases — the harsh interrogation techniques for suspected terrorists that have damaged the U.S. image around the globe; overturning the so-called Mexico City policy that forbids U.S. funding for family planning programs that offer abortion, and lifting President George W. Bush's limit on federal funding of embryonic stem cell research.

After historic day, Obama set to tackle agenda

WASHINGTON (Reuters) – Barack Obama, fresh from the pageantry of his historic inauguration, will turn on Wednesday toward his goals of rescuing the economy, charting a new course for the Iraq and Afghanistan wars and shaping his approach to the Middle East conflict.

Obama has pledged bold and swift action to deal with the worst economic crisis since the Great Depression. He has also asked Americans for patience in grappling with challenges both foreign and domestic that will take time to resolve.

With financial markets reeling and job losses mounting, Obama will meet with his economic advisers, who are working with the Democratic-led Congress on an $825 billion fiscal stimulus package.

He also is seeking fresh approaches to repair the battered financial system and is mulling a host of ideas, including the creation of a government-run bank that would buy up toxic assets from ailing U.S. banks.

The aim is to rekindle the flow of the credit to the economy so businesses and consumers can get access to loans.

Iraq and Afghanistan will dominate Obama's foreign policy agenda, but he has also said he will take an active role to try to resolve the Israeli-Palestinian conflict.

He may move quickly to name a Middle East envoy and is strongly considering George Mitchell, a former U.S. senator and veteran international troubleshooter, for the job.

In addition to the economic meeting, Obama will also sit down with top military officials to discuss Iraq and Afghanistan.

He has said he favors a 16-month timetable for the withdrawal of U.S. troops from Iraq and U.S. officials said that in his meeting with military leaders, he would discuss the possibility of accelerating their departure.

Obama also will discuss plans to bolster troops in Afghanistan as he meets with a Pentagon delegation led by Defense Secretary Robert Gates and Navy Adm. Mike Mullen, chairman of the Joint Chiefs of Staff.

Gen. David Petraeus, the former Iraq commander credited with pulling the country from the brink of civil war, was to attend Wednesday's meeting after flying back from Afghanistan.

SECRETARY OF STATE

A Senate vote is expected on Wednesday on Obama's nomination of Hillary Clinton as secretary of state.

But he will begin his new administration without a Treasury secretary. His nominee for the job, Tim Geithner, will face questions from a Senate panel about his past failure to pay some taxes.

Geithner has said the tax problem stemmed from an error and several senators have said they thought the issue would not prevent his confirmation.

Obama has found a receptive audience on Capitol Hill for his call for aggressive action to help the economy and hopes to garner bipartisan support for the massive stimulus package.

But Republicans have raised questions about the package, including how quickly the money will be spent and whether certain projects will actually kick-start the economy, which has been in a recession for over a year.

Obama is pressing for passage of the package by mid-February.

Frenetic street scene awakens capital before dawn

WASHINGTON – The National Mall swelled into a vast, pulsing scene of expectation Tuesday as excited crowds clogged mass transit lines and security checkpoints to witness the swearing-in of President-elect Barack Obama.

Energized by the historic moment, hundreds of thousands of people turned this city's orderly grid of streets into a festive party scene. Ready to endure below-freezing temperatures, they streamed up from subway stations and thronged past parked buses, emergency vehicles and street vendors, bound for Pennsylvania Avenue and the National Mall for the inauguration.

"This is the culmination of two years of work," said Obama activist Akin Salawu, 34, of Brooklyn, N.Y., who helped the candidate as a community organizer and Web producer. "We got on board when Obama was the little engine who could. He's like a child you've held onto. Now he's going out into the world."

By 4 a.m., lines of riders had already formed in suburban parking lots for the Metro transit system, which opened early and put on extra trains for the expected rush. Many parking lots filled up and had to be closed.

Streets around the Capitol quickly filled with people, and security checkpoints were mobbed. The cold registered at about 20 degrees Fahrenheit at 9 a.m.

Warming tents and other facilities on the Mall were late opening because traffic and crowds delayed staffers from reaching them. Ticket holders approaching the Inaugural site on Capitol Hill awaited security sweeps in a line estimated at thousands.

By 9 a.m. the U.S. Park Police was directing viewers to the grounds of the Washington Monument, 14 blocks away from the Capitol where Obama would be sworn in.

At the Capitol, a plexiglass shield extended about two feet up from the balustrade around the speaker's platform. Near the lectern, were seats reserved for Muhammad Ali, Elie Wiesel and Martin Luther King III. Other groups of seats were saved for past presidents, vice presidents and their spouses — the Clintons, the Gores, the Bushes and the Quayles. Each seat was furnished with a dark blue fleece blanket.

A flea-market atmosphere prevailed on downtown streets, with white tents set up to sell Obama T-shirts and mugs as well as food, bottled water, snacks, scarves and footwarmers. The scent of grilled coiled sausages and steaming Chinese food greeted those who walked toward the parade route, more than six hours before Obama would pass by.

As the first waves of people began moving through security screenings, they scrambled for prime viewing spots along Pennsylvania Avenue — sitting on the curb, staking out plots of grass, or clambering on to cold metal benches.

Christian Alderson of Berryville, Va., went to Memphis, Tenn., in 1968 to support the sanitation workers strike and said he was there when Martin Luther King Jr. was assassinated.

"That day was sorrowful," Alderson, 73, said as he stood near the mall. "This is a dream come true for me."

At the opposite end of town, Georgetown University students chanted "Obama!" and "Fired up Ready to Go!" as they walked down M Street toward the Mall.

Suburban subway riders also seemed to be in a jubilant mood, despite the early hour. In Fredericksburg, Va., an hour south of Washington, chants of "Obama! Obama!" rang out at a commuter rail station when the line started moving at 5 a.m. for the first trip into Washington.

D.C. police have projected inaugural crowds between 1 million and 2 million. Planners say attendance could easily top the 1.2 million people who were at Lyndon B. Johnson's 1965 inauguration, the largest crowd the National Park Service has on record. By 7 a.m., some 207,000 people had entered Washington's Metro transit system, transit officials said. Huge lines formed outside subway stations; many parking lots filled up and had to be closed.

The joyous mood was tempered only by delays and by the dashed expectations of revelers eager to get an up-close look at history.

Alice Williams, a 51-year-old teacher of gifted children from Kansas City, Mo., had the coveted purple ticket that would placed her in front of the Capitol, but she got caught in the crowd bottleneck and instead was stuck a half mile away.

"We got blocked off; there was too much traffic and no guidance," she said forlornly. "I've been walking for an hour and a half. All I want to do is see my president sworn in."

The cold was also taking its toll.

Shelton Iddeen, 57, of Greensboro, N.C., arrived at the Mall and 4 a.m. and huddled in front of an ambulance to warm up .

"My hands feel really bad; you can't feel your toes," he said. "I'm more concerned about other people, the elderly and the young. I've seen a lot of people here really suffering."

Others were unfazed.

Faosat Idowu, of Lagos, Nigeria, had tickets for the inauguration but couldn't get through the crowds at five different entrances between the White House and Capitol Hill. She ended up walking in a highway tunnel that normally carries Interstate 395 under the Capitol grounds, closed for this one day to all but pedestrians. She wore a bright red scarf and hat adorned with dozens of green patches bearing Obama's face and the words, "Africans for Obama."

"It's part of the excitement," Idowu said. "I don't mind it at all."

Associated Press Writers Donna Cassata, Gillian Gaynair, Ricardo Alonso-Zaldivar, Kevin Freking, Ed Tobias, Ben Evans, Seth Borenstein and H. Josef Hebert contributed to this report.

Obama rides rails to capital, as onlookers cheer

PHILADELPHIA – President-elect Barack Obama, tracing the train route Abraham Lincoln took nearly a century and a half earlier, undertook the final leg of his inaugural journey to the nation's capital Saturday, pledging to reclaim America's spirit but also warning of steep challenges facing the country.

Hundreds of excited people cheered as Obama waved from the back of the train when it rolled slowly through the station in little Claymont, Del., on the way to larger crowds at stops in Wilmington and Baltimore on the route to Washington.

Unfazed by frigid temperatures, scattered onlookers stood waving at crossroads along the way.

"Starting now, let's take up in our own lives the work of perfecting our union," Obama told several hundred people gathered inside a hall at Philadelphia's historic 30th Street train station. "Let's build a government that is responsible to the people and accept our own responsibilities as citizens to hold our government accountable. ... Let's make sure this election is not the end of what we do to change America, but the beginning and the hope for the future."

While talking about the future, Obama reflected on the past, echoing the words of the Declaration of Independence, Lincoln and President John F. Kennedy. He cited the founding fathers who risked everything with no assurance of success in Philadelphia in the summer of 1776:

"They were willing to put all they were and all they had on the line — their lives, their fortunes and their sacred honor — for a set of ideals that continue to light the world: That we are equal. That our rights to life, liberty, and the pursuit of happiness come not from our laws, but from our maker. And that a government of, by, and for the people can endure."

It's a momentous time for the Obamas. And for Michelle Obama, it was also her 45th birthday.

The president-elect's triumphant day — to be heralded by cheering throngs along the 137-mile rail route — was starting in Philadelphia with a sober discussion of the country's future with 41 people he met during his long quest for the White House.

At the outset, he told a crowd gathered in a flag-draped room that the same perseverance and idealism displayed by the nation's founders are needed to tackle the difficulties of today.

"We recognize that such enormous challenges will not be solved quickly," Obama said. "There will be false starts and setbacks, frustrations and disappointments. And we will be called to show patience even as we act with fierce urgency."

He cited the faltering economy, the wars in Iraq and Afghanistan — "one that needs to be ended responsibly, one that needs to be waged wisely" — the threat of global warming and U.S. dependence on foreign oil.

"We are here today not simply to pay tribute to our first patriots but to take up the work that they began," he said. "The trials we face are very different now, but severe in their own right. Only a handful of times in our history has a generation been confronted with challenges so vast."

Preparing to board the train, Obama said that "what's required is a new declaration of independence — from ideology and small thinking."

Obama's vintage rail car was tacked onto the back of a 10-car train made up of Amtrak cars filled with hundreds of guests, reporters and staff along for the ride.

As the train pulled out of the station at Philadelphia, the conductor said: "Welcome aboard the 2009 inaugural train to D.C."