• Home
• /
• Business

Obama heading west to promote foreclosure fight

WASHINGTON - US President Barack Obama next week heads west to tout a new strategy to prevent home foreclosures after his first big win in Congress with the approval of his 787-billion-dollar economic stimulus plan.

Before traveling to Phoenix, Arizona to promote his efforts to stem the foreclosure tide, Obama will Tuesday sign into law the huge stimulus bill at a ceremony in Denver, Colorado.

"This is a major milestone on our road to recovery," Obama said of the package in his weekly radio address Saturday.

The president claimed the biggest political victory yet of his new administration, and expressed confidence his plan "will save or create more than 3.5 million jobs over the next two years, ignite spending by business and consumers alike."

The bill will "lay a new foundation for our lasting economic growth and prosperity," he said.

The Congress late Friday approved the package of tax cuts and fresh spending to salvage the broken US economy, with the Senate voting 60-38 to pass the measure after it cleared the House of Representatives by a 246-183 margin.

Also Friday officials announced two US banks and top mortgage finance giants had imposed moratoriums on home foreclosures before Obama unveils a comprehensive plan to ease the mortgage crisis, a process set to begin at the Phoenix event on Wednesday.

JPMorgan Chase and Citigroup as well as government-controlled mortgage finance units Freddie Mac and Fanny Mae said they would freeze home foreclosures at the epicenter of global financial turmoil that has slammed the brakes on economic expansion.

Jamie Dimon, chief executive of JPMorgan Chase, said in a letter to a key Democratic lawmaker that his bank would impose a three-week foreclosure moratorium through March 6.

As an initial step to prevent foreclosures the US Treasury this week said it would commit 50 billion dollars to the effort.

Obama's stimulus legislation, his initial effort to combat the economic meltdown since taking office on January 20, was realized after some weeks of hard-fought negotiations.

The bill allocates 120 billion dollars to infrastructure spending, including money for highways.

Nearly 20 billion dollars is allocated for renewable energy and 11 billion to modernize the US electrical grid -- steps former vice president Al Gore warmly endorsed weeks ago as a major downpayment on Obama's strategy for fighting climate change.

The bill also includes tax cuts -- expected to benefit 95 percent of US families -- and tens of billions of dollars for extending unemployment benefits, bolstering healthcare for the least well-off and funds to help cash-strapped states avoid cuts in services like education.

A provision inserted by Senate Democrats would also prohibit cash bonuses for top executives at large companies that receive money under the government's bailout program, US newspapers reported Saturday.

But Obama's victory was somewhat bittersweet because lawmakers only approved a compromise stimulus that was smaller than he had requested, and most Republicans rebuffed the president's appeals to join Democrats in backing it.

"This isn't Monopoly money. It's real. It adds up, and it has to be paid back, by our children and by their children," said Republican Senate Minority Leader Mitch McConnell.

Senator Lisa Murkowski of Alaska, delivering the Republican party's response to the president Saturday, said "Republicans have been supportive of a stimulus plan all along" but were skeptical about whether one of the largest US government outlays in history would create jobs.

In his radio address, Obama vowed to spend taxpayer dollars "with unprecedented accountability, responsibility, and transparency."

He said once the plan is put into action, a new website -- recovery.gov -- will allow Americans to watch where the money goes and weigh in with comments and questions.

But he cautioned the stimulus package would be the beginning rather than the end of efforts to turn the economy around because "the problems that led us into this crisis are deep and widespread.

Over the long term, the president said measures would be needed to tame the country's burgeoning federal deficit, but expressed confidence Americans would be able to overcome the hardships.

"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."