January 28, 2009 > Democrats: Stimulus plan no quick fix for economy
Democrats: Stimulus plan no quick fix for economy
By Stephen Ohlemacher, Associated Press Writer
WASHINGTON (AP), Jan 25 _ The ailing economy probably will worsen before it improves, despite major government intervention to spur a recovery and save financial institutions, White House officials and Democratic leaders said Sunday.
Democrats sought to lower expectations for a quick fix even as they worked on legislation intended to pump billions of dollars into the market in short order. They also opened the door for even more government aid to struggling banks in the future, beyond the $700 billion bailout already approved by Congress.
``There's been no good news and there's no good news on the immediate horizon,'' Vice President Joe Biden said in a broadcast interview. ``The only good news is the president acted swiftly.''
Congress has given President Barack Obama permission to spend the second $350 billion of a Wall Street bailout package initially approved last fall. House Speaker Nancy Pelosi, D-Calif., said she is open to additional government rescue money for banks and financial institutions. But she said taxpayers must get an ownership stake in return.
Biden said Obama's choice for Treasury secretary, Timothy Geithner, will recommend whether more money is needed for the banks. Geithner is expected to be confirmed by the Senate as early as Monday.
Congress is also working on an $825 billion economic recovery package that dedicates about two-thirds to new government spending and the rest to tax cuts. Republicans want the recovery package tilted more toward tax cuts and have questioned whether government spending programs will revive the economy in the short-term.
``I just think there's a lot of slow-moving government spending'' in the package, House Republican leader John Boehner of Ohio said.
The Obama administration has pledged to spend three-quarters of the proposed money in the first 18 months after it is approved. But officials made no promises Sunday on how quickly the economy would respond. The nation lost a total 2.6 million jobs last year as the housing market contracted and financial markets collapsed.
``These problems weren't made in a day or a week or a month or even a year, and they're not going to get solved that fast,'' said Lawrence Summers, a top economic adviser to Obama.
Summers said the economy is in its worst shape since World War II.
Biden appeared on CBS' ``Face the Nation,'' Pelosi was on ABC's ``This Week,'' and Summers and Boehner spoke on NBC's ``Meet the Press.''