Lawmakers unveil 825 billion dlr plan to stimulate US economy

Democratic lawmakers from incoming US President Barack Obama's Democratic party unveiled a 825 billion dollar package aimed at jolting the US economy from a deep recession.

The economic recovery package, comprising 275 billion dollars in tax cuts and 550 billion dollars in investments, will be debated by the Democratic-led Congress in the next two weeks, beginning in the House of Representatives, officials said.

But in first signs of partisan rancor, the top House Republican complained his party had been snubbed and warned that the United States, the world's biggest economy, cannot spend its way back to prosperity.

Obama, who has been lobbying lawmakers to adopt the "American Recovery and Reinvestment Plan" ahead of his January 20 inauguration, welcomed the House move to tackle the plan swiftly.

It will "save or create over three million jobs, provide tax relief to struggling families and businesses that create jobs, and invest in priorities like health care, education, and energy that will make America strong and competitive in the 21st century," Obama said in a statement.

The package was a "significant downpayment on our most urgent challenges" and would be fully transparent and accountable, he said.

Outlined in a draft of the so-called American Recovery and Reinvestment Bill for House legislators, the package contains "bang for the buck" and "justification for every dollar spent," said House Speaker Nancy Pelosi.

Even with congressional passage of the mammoth package, unemployment rates could rise to between eight and nine percent this year, according to a summary of the bill.

"Without this package, we are warned that unemployment could explode to near 12 percent." Unemployment last year reached a 16-year high at 7.2 percent.

Among the large components of the package include 90 billion dollars in infrastructure spending, 54 billion dollars to boost energy production from renewable sources, 87 billion dollars for medical care for low-income people, 79 billion dollars to help schools and colleges prevent cutbacks.

Workers also will get a refundable 500 dollar tax credit under the effort, as part of pledges made by Obama during the election campaign.

But House Republican leader John Boehner lamented that the plan was developed with no Republican input.

"This is the first time Republicans and the American people have seen any specifics on the proposal congressional Democrats intend to pass, and what we're seeing is disappointing," he said in a statement.

The plan also "appears to be grounded in the flawed notion that we can simply borrow and spend our way back to prosperity," Boehner said, adding that tax relief for middle-class families and small businesses was less than Obama had proposed.

But senior Democratic House lawmaker Charles Rangel called the package "groundbreaking," saying it will provide critical tax, health and job-training benefits to American families and incentives for businesses, among others.

Obama won a moral boost Thursday when the Senate gave approval for his incoming administration to spend the second half of a 700 billion dollar financial bailout package devised by the Bush administration.

The Senate voted 52-42 against a Republican resolution that would have blocked the request, filed on Obama's behalf by outgoing President George W. Bush, to access the 350 billion dollars.

The vote came after Obama's top economic adviser, former Treasury secretary Larry Summers, promised that between 50 and 100 billion dollars of the remaining funds would be spent on tackling the US home mortgage crisis.

It will be "a sweeping effort to address the foreclosure crisis," Summers said in a letter to top lawmakers, reassuring them that the second half tranche of the Troubled Asset Relief Program (TARP) financial bailout fund would be spent efficiently.

The US home mortgage meltdown was at the epicenter of global financial turmoil that has led to a sharp economic slowdown unseen since the Great Depression.

The money from the TARP fund has so far been used to bail out mostly ailing banks and automakers, and insurance and credit card companies, among others, and lawmakers have expressed anger over the lack of accountability and transparency as well as the lack of focus given to ordinary Americans.