Obama: Stimulus Needed to Stop 'Continuing Disaster'

Warning that the U.S. economic crisis was a "continuing disaster" for American families, U.S. President Barack Obama called on Friday for the quick passage of his more than $800 billion economic stimulus package.

CNBC.com President Barack Obama

"The recession is deepening and the urgency of our economic crisis is growing," Obama told a gathering at the White House.

"Yesterday we reached a new threshold: The highest number of Americans receiving unemployment benefits on record." "Every day it seems there is another round of layoffs, another rounds of jobs lost and families lives turned upside down," Obama said. "This is a continuing disaster for America's families."

For Investors:

• 3 Ways the Stimulus Can Boost Your Career
• 5 Stocks That'll Profit from The Super Bowl

Obama also announced a series of executive orders that he says should "level the playing field" for unions in struggles they have with management.

Obama used the occasion at the White House to also formally announce a new White House task force on the problems of middle-class Americans, and installed Vice President Joe Biden as its chairman.

On labor issues, Obama said that among other things he was changing Bush administration policy in a way that will require companies doing contract work for the government to inform workers of their legal rights on the job.

Although his task force centers on the middle class, Obama said that "we're not forgetting the poor." He said his administration wants to make sure low-income people "get a piece" of the American pie "if they're willing to work for it."

The Senate will begin debate next week on the stimulus bill, giving Republicans an opportunity to amend the legislation, which passed the House without any Republican votes. Senator John McCain of Arizona said Friday he and other Republican senators are working to develop a package that would be an alternative to President Barack Obama's economic stimulus plan.

Speaking to Reuters, McCain said the alternative package would include what he described as "more effective tax cuts, such as a payroll tax cuts" and spending on projects aimed at immediately creating jobs.

Here are some details on the Democratic-backed legislation:

—As currently written, the Senate bill contains $342 billion in temporary tax breaks and more than $545 billion in spending to total about $887 billion. That spending would occur over several years, but the goal is to shovel much of it out this year and next to help generate jobs through new construction projects and other programs.

—The House has passed a bill estimated to cost around $819 billion, including $275 billion in tax cuts over two years. No Republicans voted for the bill after they failed to eliminate all the spending and substitute their own package of tax cuts estimated to cost about $478 billion.

—The Senate version is more expensive, mainly because of a tax provision that would shield middle-class taxpayers from getting nudged into paying a tax that is intended for the wealthiest. It was not yet clear whether the provision will survive in this bill or be dealt with later this year.

—Obama says he is open to new ideas from Republicans and Democrats that would strengthen the bill, either on the tax or spending side.

— Among amendments senators were considering proposing during Senate debate are: - Dedicating more spending for investments while cutting other spending that might not create jobs; - Imposing a 90-day moratorium on home foreclosures, which have been skyrocketing as the economy soured; - Increasing the ratio of tax cuts to spending.

These could include more help for businesses to invest and create jobs, allowing new tax breaks for companies that repatriate profits held overseas and using the tax code to encourage more home-buying.

—Despite the Republican criticism, a somewhat bipartisan vote might not be out of reach. Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance tax-writing panel, has told reporters that he's satisfied with the size of the tax part of the bill and that his fellow Republicans support about 90 percent of the measure.

Republicans are particularly irked by a refundable tax credit Obama wants that would include low-income workers who pay no income taxes, but do pay Social Security and Medicare taxes.

Some Republicans also object to aid $87 billion in extra Medicaid aid to the states and would prefer loans.

— Any disgruntled senator could slow down passage of the bill. Democrats who control the chamber could seek to end debate and move to a vote.

—If and when the Senate passes its bill, House and Senate negotiators would then meet to work out differences.

—Democrats hope final votes on one bill would be held by mid-February, with Obama signing it into law promptly.

Copyright 2009 Reuters. Click for restrictions.