The House of Representatives is poised to approve its version of Barack Obama’s proposed fiscal stimulus on Wednesday even as Republicans step up opposition to the $825bn plan.
The bill is expected to pass easily in the Democratic-dominated House, but with little of the Republican support the president has staked his bipartisan credentials on securing.
Mr Obama held talks with leaders of both parties on Capitol Hill on Tuesday in his latest bid to forge consensus over the rescue package as fresh data highlighted the worsening outlook.
House prices in the largest US cities tumbled to a new low in the year to November as the stricken market showed no signs of bottoming out and consumer confidence continued to sink.
“The statistics every day underscore the urgency of the economic situation,” Mr Obama said after meeting Republican leaders. “The American people expect action.”
He urged legislators to “keep politics to a minimum” as the stimulus progressed through Congress, with the White House aiming to sign it into law by mid-February. But his appeal appeared to fall on deaf ears as Republicans intensified their criticism.
Republican leaders praised Mr Obama for his openness to their ideas but claimed other Democrats were failing to live up to the president’s bipartisan approach.
“What congressional Democrats have put on the table is a wasteful and unfocused package that will create plenty of government programmes and projects – but not nearly enough new, good-paying jobs,” said John Boehner, House minority leader.
Republicans want to rein in Democratic spending plans and inject more tax cuts. But Nancy Pelosi, House speaker, insisted her party had already offered concessions on both counts.
Democrats need only a handful of Republican votes in the Senate to help them pass the stimulus, although Mr Obama is desperate to secure broad bipartisan backing for the first big legislation of his presidency.
Mr Obama is scheduled to meet several chief executives at the White House today to discuss the economy and harness business sector support for his plans.
Robert Gibbs, White House press secretary, said the president would continue to urge compromise as negotiations shifted to the Senate.
The Senate finance committee met on Tuesday to discuss its version of the stimulus, which has the same broad outlines as the House legislation.
The committee increased a provision for companies to buy back their own debt at a discount in the secondary markets without incurring a tax liability – a key demand of business groups such as the US Chamber of Commerce.
The Senate bill also accepted an amendment from Charles Grassley, the senior Republican on the committee, to prevent middle-income taxpayers being hit by the Alternative Minimum Tax, originally aimed at the very rich, which added about $70bn to the cost of the bill.
But lobbyists and lawmakers said that many elements of the bill remained open for discussion. Democrats seized on a report from the Congressional Budget Office released late on Monday to argue that most of the stimulus would come through in the first 18 months, contrary to Republican claims based on an incomplete version of the CBO report circulated last week.
The 18.2 per cent drop in house prices announced on Tuesday followed an 18 per cent year-on-year decline in October, itself a record, as prices fell more steeply in a wider array of cities, including Boston and New York, according to the closely watched Case-Shiller index.
At the same time US consumer confidence fell to a new low in January, dropping to 37.7 from 38.6 the previous month.
“The recession is biting across an increasingly wide swath of sectors, with almost nowhere and nobody immune,” said Alan Ruskin of RBS Greenwich Capital.
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