Obama warns of need for stimulus urgency*

Obama warns of need for stimulus bill right away

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Slideshow: Economic Stimulus Plan Play Video Video: Tapper on Obama's Executive Salary Cap ABC News Play Video Video: Obama: 'time for action is now' AP AP – President Barack Obama speaks at the National Prayer Breakfast in Washington, Thursday, Feb. 5, 2009. … WASHINGTON – President Barack Obama says the time for talk on an economic recovery package is over and "the time for action is now."

Speaking at the Energy Department, Obama made a fresh plea for the stimulus plan that the Senate is debating. He cited the latest bad economic news of jobless claims as another reason for quick action.

He said: "The time for talk is over, the time for action is now."

Republicans and some Democrats have expressed reservations about the growing price tag of the package — more than $900 billion. Senate Democratic leaders hope to have a bill completed by Friday.

Senate moderates from both political parties worked to cut up to $100 billion from economic stimulus legislation and clear the way for the bill's passage as Obama urged lawmakers to "rise to the moment."

Senate Democratic leaders said they hoped for passage of the legislation by Friday, and prospects appeared to hinge on agreement to a series of changes that would trim the size of a bill costing well over $920 billion.

Senate centrists met privately, and emerged saying they had made progress toward an accord.

"The president made a strong case for a proposal that would be in the neighborhood of $800 billion," said Sen. Susan Collins, R-Maine, who met with Obama at the White House on Wednesday.

Earlier today, Obama warned that failure to pass an economic recovery package could plunge the nation into an even longer, perhaps irreversible recession, as senators searched for compromises to whittle down the enormous bill.

Obama painted a bleak picture if lawmakers do nothing.

In an op-ed piece in The Washington Post, the president argued that each day without his stimulus package, Americans lose more jobs, savings and homes. His message came as congressional leaders struggle to control the huge stimulus bill that's been growing larger by the day in the Senate. The addition of a new tax break for homebuyers Wednesday evening sent the price tag well past $900 billion.

"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the newspaper piece.

He rejected the argument that more tax cuts are needed in the plan and that piecemeal measures would be sufficient. His latest plea came on the same day the economy dealt with another dose of bad news: A big jump in jobless claims and another round of weak retail sales.

Initial jobless claims rose to 626,000, a 26-year high, the Labor Department said. And the number of claims by people continuing to apply for unemployment benefits reached a new record of nearly 4.8 million.

The housing tax break was the most notable attempt to date to add help for the crippled industry and gave Republicans a victory as they work to remake the legislation more to their liking.

"It is time to fix housing first," Sen. Johnny Isakson, R-Ga., said Wednesday night as the Senate agreed without controversy to add the new tax break to the stimulus measure, at an estimated cost of nearly $19 billion.

Three swing-vote senators met with Obama at the White House on Wednesday to discuss possible cutbacks, but they declined to discuss details of their talks. Obama has made the legislation a cornerstone of his recovery plan.

For their part, Senate Republicans signaled they would persist in their efforts to reduce spending in the measure, to add tax cuts and reduce the cost of mortgages for millions of homeowners.

Officials figures were unavailable, but it appeared that the measure carried a price tag of more than $920 billion, making it bigger than the financial industry bailout that passed last year and as large as any measure in memory.

Despite bipartisan concerns about the cost, Republicans failed in a series of attempts on Wednesday to cut back the bill's size.

The most sweeping proposal, advanced by Sen. Jim DeMint, R-S.C., would have eliminated all the spending and replaced it with a series of tax cuts. It was defeated 61-36.

Democrats also upheld a so-called Buy American provision that requires projects financed by the measure to be built with domestically produced iron and steel.

But with Obama voicing concern about the provision, the requirement was changed to specify that U.S. international trade agreements not to be violated.

Additionally, Democrats turned back an attempt to strip out a provision that Obama has said was essential. It would provide a tax cut of up to $1,000 for working couples, including those who do not make enough to pay income taxes.

Isakson said the new tax break for homebuyers was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.

The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.

The provision was the second tax cut approved in as many days targeted to individual industries. On Tuesday, the Senate voted to give a break to consumers who buy new cars.

The House approved its own version of the bill last week.