Obama signs stimulus bill, attention turns to housing (Lead)

February 18th, 2009 - 8:07 am ICT by IANS  

Barack ObamaWashington, Feb 18 (DPA) The centrepiece of Barack Obama’s economic rescue plans was signed into law Tuesday, the culmination of a six-week process full of partisan wrangling that handed the US president his first significant victory since inauguration.
Obama signed the $787-billion economic stimulus bill at a ceremony in Denver, Colorado. The largest single spending measure in US history is intended to help the country recover from a year-long recession that many consider the worst since the Great Depression of the 1930s.

“I don’t want to pretend that today marks the end of our economic problems,” Obama said ahead of the signing. “But today does mark the beginning of the end.”

Obama said the rescue package, a mix of two-thirds spending projects and one-third tax cuts, will save or create 3.5 million jobs by the end of 2010. It invests in the country’s infrastructure, health, education and energy sectors “that have been neglected for too long,” he said.

The bill was passed Friday by both houses of Congress, but with scant support from minority Republicans who sought a smaller, tax cut-heavy bill and argued the unprecedented spending proposals would bankrupt future generations.

With the stimulus in effect, Obama will turn his attention Wednesday to the next crisis on the horizon - a record wave of home foreclosures in the country that is blamed for sparking the current economic crisis.

Obama will present his plans for stemming the housing downturn in Phoenix, Arizona, one of the areas of the country hardest-hit by plunging home prices over the last two years.

“We must stem the spread of foreclosures and falling home values for all Americans, and do everything we can to help responsible homeowners stay in their homes,” Obama said Tuesday in a preview of his speech.

Obama has promised to spend at least $50 billion - taken from an existing $700-billion financial rescue bill passed in October - to help people refinance their mortgages and halt the decline in home prices. His speech Wednesday is intended to flesh out the details.

More than 3 million people were in foreclosure in 2008 as home prices plunged nearly 20 percent across the country. The mortgage defaults cost financial institutions hundreds of billions of dollars, sparking bankruptcies and prompting a nationwide restriction of new loans that further depressed the US economy.

About 3.6 million jobs have been lost since the recession began in December 2007, the sharpest drop since 1945. Unemployment rose to 7.6 percent in January and the economy contracted 3.8 percent in the final quarter of 2008.

But Obama said he believed the world’s largest economy would emerge from the current crisis in a stronger position.

“I have every confidence that if we are willing to continue doing the critical work that must be done … then we will leave this struggling economy behind us, and come out on the other side, more prosperous as a people,” Obama said.

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