- The Washington Times - Monday, February 16, 2009

WASHINGTON (AP) — President Obama heads to the American West this week to sign the $787 billion economic stimulus package and to tackle the home mortgage foreclosure crisis, signaling his determination to sidestep the partisan fires still raging in the capital.

The president will sign the stimulus bill into law in Denver on Tuesday suggesting that Obama will continue taking his economic message to the American people, who are giving him high marks for handling the crisis. The symbolism is obvious for Colorado, where a growing green- energy industry will draw major benefits from the stimulus.

“He is determined to keep in touch with the American people who sent him here to do this job,” Obama senior adviser David Axelrod said on “Fox News Sunday.

See related story: Obama to ease curbs on CEO pay

Passage of the stimulus — unprecedented in its cost to the federal treasury — was a major victory for Obama as he struggles to lift America out of an economic nosedive not seen since the 1930s Great Depression.

While predicting Americans would begin to see a decline in the skyrocketing unemployment rate once the money begins to flow, top Obama aides cautioned Sunday that the economy would continue its negative spiral in the near future.

“The president has said it’s likely to get worse before it gets better,” Axelrod said. “But I do expect the rise in unemployment to be retarded.”

See related story: Grim economy greets Clinton in Japan

On Monday, former President Clinton gave Obama high marks for quick passage of the stimulus package.

Clinton said in an interview broadcast on NBC’s “Today” show that he believes Obama “is off to a good start.” He said the new president and his economics team handled the controversial stimulus plan well, “given the fact that they had to do it in a hurry.”

Meanwhile, Secretary of State Hillary Rodham Clinton, the wife of the former president, arrived in Tokyo on Monday on her first trip abroad as Obama’s top diplomat.

She said Washington’s alliance with Japan is a cornerstone for U.S. foreign policy and urged North Korea to live up to its commitments to dismantle its nuclear programs.

In passing the stimulus legislation, Obama had hoped for bipartisan support. But the package drew no Republican votes in the House and only three Republican votes in the Senate.

It aims to save or create as many as 3.5 million jobs through massive government investment while boosting consumer spending through modest tax cuts.

White House spokesman Robert Gibbs said the president had taken “unprecedented” steps in a bipartisan effort to include Republicans in the legislative process. But Sen. John McCain remained highly critical, declaring the stimulus would create what he called “generational theft” — huge federal deficits for years to come.

McCain, who lost the presidential race to Obama, said the president had backtracked on promises of bipartisanship and was off to a bad start. “Let’s start over now and sit down together,” said McCain, who appeared with Gibbs on CNN’s “State of the Union.”

After signing the stimulus bill on Tuesday, Obama moves Wednesday to Phoenix, where he was to outline plans for reversing the collapse of the housing market.

Late last summer, Americans began feeling the pinch of the recession and left the housing market in huge numbers. That coincided with a sharp increase in defaults on home mortgages, a devastating combination that triggered the U.S. financial crisis. Lending froze as banks and investment houses realized they were holding trillions of dollars in bad assets.

Under an emergency $700 billion bailout program passed late last year, the administration of former President George W. Bush administration used half of those funds to forestall a financial collapse. But the flow of credit did not ease and use of the money was criticized because it was poorly administered and monitored.

Obama is now working to leverage the second portion of the bailout money into a program that could result in $2 trillion in government and private sector cash infusions to help banks and investment houses clear away “toxic” holdings and thereby spur lending.

“It is going to take time to lay out every aspect of this plan,” Obama said Friday during an interview with five columnists, including The Washington Post’s E.J. Dionne, who reported on the conversation. “There are going to be certain aspects of any plan … which will require re-evaluation and then have some experimentation — if that doesn’t work then you do something else.”

As part of the next steps on the bailout, Obama was expected to introduce measures to help homeowners on the brink of foreclosure. Details have not been disclosed, but the nature of the crisis suggested mortgage loans would have to be revalued downward along with interest rates.

“We obviously have a major problem; problems with foreclosure, problems with people living on the edge and problems with home values around the country just plummeting, which is affecting family, family finances everywhere,” Axelrod told NBC. “We want to do something that will address all of those things.”

On another major crisis facing the administration, Axelrod said that any plan to shore up the auto industry will require sacrifice by all involved, from auto workers and industry executives to shareholders and creditors.

On Sunday, sources within the administration said Obama plans to appoint senior administration officials — rather than a single “car czar,” as had been discussed — to oversee a restructuring of the auto industry.

Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers will oversee the across-the-government panel, a senior administration official said Sunday on condition of anonymity because no announcement had been made.

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