Page last updated at 09:32 GMT, Thursday, 29 January 2009

US House passes stimulus package

President Obama said the economy could be turned around

The US House of Representatives has passed President Barack Obama's $819bn (572bn) economic stimulus package.

Passed by 244 votes to 188, no Republicans backed the plan, saying it was too expensive and would not work.

The Senate debates the plan next week, and it could face stiff opposition as the Democrats have a slimmer majority.

After the vote, President Obama urged members of Congress not to "drag our feet or allow the same partisan differences to get in our way".

The president has said his package, which he hopes to sign into law next month, would help create a favourable climate for American business to thrive.

The bill would cut taxes for people and businesses by $275bn, while pumping more than $540bn into a range of initiatives including road and bridge repair, increased unemployment benefits, investment in new technology and renovations to 10,000 schools.

Heated debate

Mr Obama has pledged to try to end partisan division in Washington, but the debate on how best to kick start the US economy has devolved into a bitter squabble along party lines, says the BBC's Richard Lister in Washington.

Tax cuts: $275bn
Spending: More than $540bn including:
Increased federal funds for Medicaid: $87bn
Moves towards clean, efficient energy: $54bn
Rebuild roads, bridges and buildings: $90bn
Modernise education: $141bn
Help for workers, unemployment benefit and training: $102bn
Source: House Appropriations Committee

In a heated debate, a succession of Republicans in Congress have condemned the stimulus package as a wasteful government spending exercise that will do little to create jobs.

They promoted their own bill, focussing more on tax cuts, which they said would create more jobs for half the investment.

"Fast-acting tax relief will create more jobs in America than a lot of slow-moving government programmes," said the Republicans' House minority leader John Boehner.

But this was a battle they could not win in the House, where Democrats have a large majority.

It is slimmer in the Senate where Republicans could slow the bill's progress, but Democrats are confident they can get the measure through there, and they have set a target for mid-February to have the bill on Mr Obama's desk to be signed into law.

Failing to attract significant Republican support for the bill, our correspondent says, is a blow to Mr Obama's hopes of forging a new consensus in Washington, at this time of economic crisis.

Greater accountability

Mr Obama said earlier workers were looking for "bold and swift" action from leaders, and called on businesses to play their part in economic recovery by creating jobs in a "favourable climate" started by government.

"I am confident that we are going to get it passed," Mr Obama said.

The US "cannot afford inaction or delay", he said after meeting business leaders at the White House.

Laying the blame for the economic crisis partially on a "sense of irresponsibility" on Wall Street and the government in Washington DC, he said corporate America had to take responsibility for its workers, but that Washington needed to provide leadership with the stimulus plan.

The president has said most of the money in his package would be used "immediately", creating as many as 4m jobs - the vast majority in the private sector - and that there would be a greater measure of accountability.

Treasury Secretary Timothy Geithner, who was sworn in on Monday, has the task of trying to get the US economy back in shape.

Meanwhile, Mr Obama attended his first Pentagon session with the joint chiefs of staff on Wednesday, telling them the military had carried out its missions under enormous pressure, and pledging his support to the troops.

Mr Obama, who campaigned on a promise to end the war in Iraq responsibly and withdraw troops next year, said his administration faces tough decisions on Iraq and Afghanistan.

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