Obama: Catastrophe coming if Congress doesn’t act quickly on stimulus

WASHINGTON — Republicans tried to push back against the ballooning size of President Barack Obama’s economic recovery plan today even as he said the financial crisis would turn into “a catastrophe” unless the bill 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 now tops $900 billion and appears headed higher.

Sens. Susan Collins, R-Maine, and Ben Nelson, D-Neb., tentatively have agreed to trim that amount, a Nelson spokesman said, though details were not immediately available.

Their effort is central to building at some bipartisan support for legislation that has come under increasing attack for too much spending unrelated to jolting the economy right away.

Obama indicated he is amenable to changes.

“No plan is perfect, and we should work to make it stronger,” Obama said at the White House. “Let’s not make the perfect the enemy of the essential. Let’s show people all over our country who are looking for leadership in this difficult time that we are equal to the task.”

Sen. Olympia Snowe of Maine, an Obama GOP ally, said she had a productive meeting with Obama and urged that the measure be “thoroughly scrubbed” of spending items that won’t do much to create jobs immediately.

The cost of the plan raced past $900 billion after the Senate on Tuesday added money for medical research and tax breaks for car purchases. An effort to add $25 billion more for public works projects narrowly failed, but probably will be revived.

The cost could go higher if senators approve making a tax break for homebuyers more generous.

Sen. Johnny Isakson, R-Ga., is pressing for a tax credit of up to $15,000 for everyone who buys a home this year. That would cost about $20 billion. It also offers a $7,500 tax credit to first-time homebuyers.

Taken together, the developments prompted a scolding from the Senate’s top Republican.

“At some point, we’re going to have to learn to say no,” said Sen. Mitch McConnell of Kentucky. “If we’re going to help the economy, we need to get a hold of this bill. And making it bigger isn’t the answer.”

The Congressional Budget Office weighed in a study the predicts the Senate plan would create as many as 3.9 million jobs, or as few as 1.3 million, by the end of 2010. The agency, which analyzes legislation for lawmakers, said ideas such as payments to states and low-income people are effective in jolting the economy.

But the CBO said a $70 billion plan to cut the alternative minimum tax for one year would not provide a significant boost and that a plan to award money-losing businesses with refunds of taxes paid on previous profits would have a negligible effect.

Obama appealed to lawmakers to get behind his approach, saying Americans embraced his ideas when they elected him president in November. Republicans have focused on questionable spending, citing items such as money to combat sexually transmitted diseases, fix problems with the census and combat the flu.

Some Democrats are griping as well.

Rep. Jim Cooper, D-Tenn., told a Nashville, Tenn., radio station that he “got some quiet encouragement from the Obama folks for what I’m doing. … They know its a messy bill and they wanted a clean bill.”

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