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Obama faces tough week; stimulus, bailout on tap
(Agencies)
Updated: 2009-02-09 10:54 The Senate bill is finely tuned. With only two or three Republicans on board, it is guaranteed, at most, 61 votes; the bill needs 60 votes to advance and avoid procedural hurdles. Any change in the balance struck by the Senate bill could doom it. Sen. John McCain, R-Ariz., a vocal critic of the stimulus bill, complained that Republicans won't be involved in the final negotiations. "That's the way the Bush administration, when we Republicans were in charge - that's the way we did business," he said. "But I thought we were going to have change." Obama will take his case to the American people at 8 p.m. EST Monday with his first prime-time news conference. He'll also participate in town hall-style meetings in cities suffering particularly hard times - Elkhart, Ind., on Monday and Fort Myers, Fla., on Tuesday. The House and Senate are scheduled to go on recess next week, but congressional leaders have said they will not leave until the bill is completed. The bank bailout proposal that Geithner will announce Tuesday also carries policy and political risks. Congress approved a $700 billion bailout for the financial sector last fall. But since then, lawmakers from both parties have been critical of how the Bush administration spent the first half of the money. The Senate grudgingly agreed to give Obama access to the second half of the fund, but only after Obama promised to impose tougher conditions and to devote at least $50 billion of the fund to reducing mortgage foreclosures. Officials said Geithner will not ask for more money for the program at this point. Instead, his plan is likely to include various approaches to loosening credit and helping banks deal with troubled, mortgage-backed assets. "We are going to solve it by being as effective and strategic as we possibly can in the use of public money so as to catalyze and spur private investment," Summers said Sunday. He appeared to be describing one plan under consideration that that would have the government put up seed money to attract private-sector buyers to take on some of the banks' troubled assets. Other options, cited by industry and congressional officials: Continuing to stress government purchases of bank stock as a way to bolster banks' balance sheets and try to get them to resume more normal lending. The money would come with more strings attached than in the past. "Institutions that get assistance will have to participate in loan modifications and meet other standards that we set," Geithner told House Democrats at a party retreat in Williamsburg, Va., on Saturday, according to notes taken by party officials. Expanding the use of the Term Asset-Backed Securities Loan Facility, a new program the Federal Reserve is developing, beyond supporting consumer loans to other types of lending. The Fed on Friday announced new terms and conditions for the facility and said a starting date would be announced later this month.
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