President signs $787 billion stimulus bill, readies $50 billion proposal to help homeowners on mortages
DENVER - President Barack Obama put his own indelible imprint on the nation's distressed economy Tuesday, signing the huge recovery package into law, readying a $50 billion proposal to help homeowners fend off foreclosure and awaiting emergency restructuring plans from flailing automakers. Obama said the sprawling legislation, which congressional Democrats pushed to passage last week over near-unanimous opposition from Republicans, would "set our economy on a firmer foundation."
Obama's first major piece of legislation, it's a $787 billion mix of tax cuts and one of the biggest public spending programs since World War II.
"I don't want to pretend that today marks the end of our economic problems. Nor does it constitute all of what we have to do to turn our economy around. But today does mark the beginning of the end, the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs," Obama said.
The setting for the signing was the Denver Museum of Nature & Science, with solar panels on its roof, underscoring the investments the new law will make in "green" energy-related jobs. Workers in solar, wind, and other renewable-energy industries joined Obama and Vice President Joe Biden at the bill-signing ceremony.
Presidential spokesman Robert Gibbs told reporters the White House was open-minded about another stimulus effort. But he stressed that there were no plans in the works for one.
Meanwhile, General Motors Corp. and Chrysler LLC raced to complete recovery plans they were due to submit as part of their deal to receive billions of dollars in government loans. It was not clear they would make Tuesday's deadline.
The two automakers have been living off a combined $13.4 billion in federal bailout loans. They must persuade the administration that they can remain viable. Detroit's third major automaker, Ford Motor Co., did not request government help.
With the economy dominating Obama's first weeks in office, the president on Wednesday will unveil another part of his recovery effort - a $50 billion plan to help stem foreclosures.
All the activity also is allowing Obama to get away from Washington, with its intense partisan wrangling, and be cheered by people who may benefit from the huge government intervention.
Obama planned to outline his plan to help struggling homeowners in a speech in Arizona, one of the states hardest hit by home foreclosures that are at the center of the nation's economic woes.
The $50 billion program was mentioned last week by Treasury Secretary Timothy Geithner as part of a wide-ranging financial-sector rescue plan that could send $2 trillion coursing through the financial system. But details were not announced at the time.
Obama's announcement is expected to include details about how the administration plans to prod the mortgage industry to do more in modifying the terms of home loans so borrowers have lower monthly payments.
More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.
As for Tuesday's stimulus package, it will pump money into highway, bridge and other infrastructure projects, health care, renewable energy development and conservation.
It includes a $400 tax break for most individual workers and $800 for couples, including those who do not earn enough to pay income taxes. It will distribute tens of billions of dollars to states so they can head off deep cuts and layoffs and will provide financial incentives for people to start buying again, from first homes to new cars to shoes and cereal. It also provides help to poor people and laid-off workers, with increased unemployment benefits and food stamps, and subsides for health insurance.
Separately, GM and Chrysler raced to finish restructuring plans to present to the federal government but seemed unlikely to complete deals with debtholders and union workers by the government-imposed deadline on Tuesday.
Gibbs, Obama's press secretary, told reporters aboard Air Force One that he wouldn't rule out bankruptcy for Detroit automakers. Gibbs said the administration looks forward to reviewing GM and Chrysler's restructuring plans. Gibbs said it is important for the economy to have a strong and viable auto industry and that it's up to automakers to make choices about what is most helpful to their recovery.
GM earlier received $9.4 billion in government loans and Chrysler $4 billion. GM picked up the second installment of its loans, $4 billion, on Tuesday, according to Gibbs.
The Obama team had weighed appointing a "car czar." But Sunday night, the White House instead announced a task force to oversee the companies' restructuring.
The back-to-back government moves to try to lift the economy from a crippling recession had been eagerly awaited by Wall Street. But with the programs now being put in place, investors seemed concerned the impact might not be fast enough or big enough and stocks tumbled on Tuesday to near their November lows.
Associated Press Writers Ben Feller and Ken Thomas in Washington and Tom Krisher in Detroit contributed to this report.