Obama's US$819 bln aid plan survive House, heads to Senate

Thursday 29th January 2009

U.S. President Barack Obama's US$819 billion fiscal stimulus package overcame its first hurdle when it won support in the House of Representatives.

The package of tax cuts and new spending initiatives succeeded by 244 votes to 188 and now heads to the Senate, where Republicans are preparing to force changes including more tax cuts and reduced government spending. Obama yesterday won of a group of company chief executives, who called on the speedy approval of the American Recovery and Reinvestment Act.

"This recovery package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and transform it for the 21st century," Speaker Nancy Pelosi said in a statement on her website. "This means real change: it will strengthen the middle class, not just Wall Street CEOs and special interests in Washington," she said.

The package failed to win bipartisan support, as all Republicans who cast their vote said no to the bill. Eleven Democrats also voted against Obama's proposal.

"What we can't do is drag our feet or allow the same partisan differences to get in our way," Obama said in a statement from the White House. "We must move swiftly and boldly to put Americans back to work."

The U.S. economy shed 2.6 million jobs last years with thousands more positions eliminated so far this month from companies including Home Depot and Caterpillar.

The cost of the package rose by US$3 billion from an initially proposed US$816 billion, reflecting amendments during its passage.

Stocks rose in Asia amid optimism the stimulus package will help soothe the global financial crisis and revive economic growth. The Nikkei 225 Index climbed 0.9% in Tokyo and the Hang Seng jumped 5.7% in Hong Kong, helped by the U.S.

Federal Reserve's decision to keep its benchmark interest rate near zero and consider buying longer-dated Treasury bonds to restore financial markets.

By Jonathan Underhill

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