A new poll out this morning suggests that Americans are starting to shift blame on the jobless economic recovery to Democrats from Republicans.

The CNN/Opinion Research Corp. survey found that 27 percent of respondents say Democrats are mostly responsible for the economic woes, while 38 percent say Republicans are mostly to blame. In May, by contrast, the same survey found only 21 percent blaming Democrats and 53 percent faulting Republicans.

The poll also found that the gap between those who believe that President Obama's policies have improved economic conditions and those who think his policies have worsened the economy has shrunk -- from 14 percentage points in May to only 8 percentage points this month.

Despite the rebounding stock market and other positive signs, the survey found unrelenting pessimism about the economy: 82 percent rated conditions as somewhat or very poor, while only 18 percent said they were somewhat or very good.

The new survey was conducted Nov. 13-15 and has an overall margin of error of plus or minus 3 percentage points.

Some of the president's own Democratic allies have begun to turn against him on the economy, saying that the administration hasn't done enough, despite the $787 billion stimulus, to reverse rising unemployment.

UPDATE: Republicans are pouncing on the dissension in Democrats' ranks, the unemployment numbers, and growing doubts about the jobs supposedly saved or created by the stimulus spending.

“Continued double-digit unemployment is not what Ohioans were promised. The White House, with the support of Governor Strickland, pledged that the ‘stimulus’ would create jobs immediately and keep the national unemployment rate from going above 8 percent. Not only has the 'stimulus' not produced jobs the Administration promised, but now we continue to discover numerous cases of waste, fraud, and incompetence in Ohio and across the country,” the House GOP leader, Representative John Boehner of Ohio, said in a statement today after word that Ohio's unemployment rate had risen to 10.5 percent last month.

“Struggling families and small businesses in our great state deserve better. In all, over the past nine months since the ‘stimulus’ was enacted, nearly 150,000 Ohioans have lost their jobs­. Immediate action is needed to create jobs and provide relief. House Republicans will continue to offer fiscally responsible solutions to create jobs by putting money back in the hands of the true drivers of economic growth: American families, small businesses and entrepreneurs.”

The White House and its Democratic allies in Congress are refocusing on jobs. To which Republicans say: It's about time.

"I say you gotta be kidding me. They have for months now been about more spending, leaving a wake of deficits in their trail, and now they want to focus on what’s important," Representative Eric Cantor of Virginia, the No. 2 Republican in the House, told reporters today.

"Sometimes it is difficult for us to take the other side seriously, but if they are serious we welcome this news. Republicans have been working for months now trying to forge solutions as to how to get Americans back to work. We urge Speaker Pelosi to take into consideration some of the Republican solutions for job creation and look forward to working together so that we can get this economy back on track,” he added.

UPDATE: WASHINGTON -- Continuing his focus on swine flu, Senator Paul G. Kirk Jr. today questioned why it's taking so long to get the vaccine to states.

At a hearing of the Senate homeland security committee, the Massachusetts Democrat noted that there have been about 22 million cases of H1N1 nationwide and 3,900 deaths, including more than 1,500 confirmed cases in the Bay State since April.

State officials said last month that vaccine deliveries were running three weeks behind and that shortages were being reported.

"Many of us are seriously concerned that far more individuals will come down with the virus, and far more lives will be lost, before sufficient quantities of the vaccine arrive," Kirk said in his opening remarks. (His full prepared opening statement is below.)

UPDATE: Representative John Boehner added his criticism, noting that the national debt has passed a mindboggling $12 trillion.

"A $12 trillion national debt is just the latest fallout from Washington Democrats’ unprecedented spending binge.  The American people are asking ‘where are the jobs?’ but all they are getting from out-of-touch Washington Democrats is more unsustainable spending and debt to be paid by our kids and grandkids.  Instead of taking immediate, bipartisan action to cut spending, Washington Democrats are preparing to double down on their trillion-dollar ‘stimulus’ with a $1.3 trillion government takeover of health care and a promise to address fiscal responsibility sometime next year," he said in a statement.

“The American people deserve better than a government that kicks the can down the road.  It is past time for Congress to adopt strict budget caps that limit federal spending on an annual basis, which was a critical plank in the budget alternative Republicans proposed earlier this year.”

Representative Steny Hoyer of Maryland, Cantor's Democratic counterpart, said Democrats will try to pass a job-creation plan this year that could include money for highway construction and tax credits for small businesses.

Hoyer told reporters today that it wouldn't be as sweeping as the $787 billion economic stimulus enacted in February, saying, “We need to act in a way that does get to the creation of job opportunities of people in the short term.”

Just before President Obama departed on his Asia trip, he announced a jobs forum to come up with any and all ideas to stem rising unemployment, at 10.2 percent nationally last month.

The White House announced Monday night that the forum will be Dec. 3. “During these difficult economic times, we have a responsibility to consider all good ideas to encourage and accelerate job creation in this country. At the forum next month, I am looking forward to hearing from the private sector, from CEOs and small business owners and from Americans struggling to make ends meet on how we can work together to create jobs and get this economy moving again,” Obama said in a statement.

The White House also announced that the following day, Obama will kick off a "Main Street Tour" in Allentown, Pa., "that will take him to cities and towns across the country over the course of the next few months" to "take the temperature on what Americans are experiencing during these challenging economic times."

Responding to public outrage, President Obama today announced a financial fraud task force to go after Wall Street crooks and others making illegal gains.

The aim is “to prevent another meltdown from happening,” Attorney General Eric Holder said at a news conference. “We will be relentless in our investigation of corporate and financial wrongdoing.”

The task force will be led by the Justice Department and also include agencies including the Securities and Exchange Commission, the Treasury Department, and the Department of Housing and Urban Development.

Obama's executive order can be viewed here.

President Obama and Chinese President Hu Jintao didn't agree today on much substantial on climate change.

But these days, even goodwill among the two biggest energy producers is apparently cause for hope.

“This agreement shows that economic competition and cooperation are not mutually exclusive, especially when solving the grave threat of climate change is at stake," Representative Edward Markey of Massachusetts said in a statement.

“This significant agreement offers a blueprint for international clean energy cooperation between the U.S. and China, and for the rest of the world. With crucial international climate negotiations in Copenhagen just weeks away, the U.S. and China have proven today that the international community can find common ground on key energy issues," added Markey, co-author of the climate change bill passed by the House in June.

“In just a month, the conventional wisdom on US-Chinese climate politics has been turned on its head, and not a moment too soon. With just days to go before nearly 200 countries meet in Copenhagen to forge a new way forward on climate and clean energy, this agreement shows that the last remaining roadblocks are being pushed aside.”

President Obama reacted with concern about a new report today that suggests hunger in America is at record levels -- and a vow to do something about it.

The US Department of Agriculture reported that in 2008 -- during the start of the worst recession in decades -- nearly 15 percent of US households, about 49 million people, struggled to put enough food on the table, the highest number since the agency began tracking food "insecurity" in 1995.

The number jumped significantly from 11 percent in 2007, and was likely higher this year as the jobless rate rose.

"It is particularly troubling that there were more than 500,000 families in which a child experienced hunger multiple times over the course of the year," Obama said in a statement. "Our children’s ability to grow, learn, and meet their full potential – and therefore our future competitiveness as a nation – depends on regular access to healthy meals.

"My administration is committed to reversing the trend of rising hunger. The first task is to restore job growth, which will help relieve the economic pressures that make it difficult for parents to put a square meal on the table each day. But we are also taking targeted steps to prevent Americans from experiencing hunger.

Among the steps, he said, is increasing benefits and expanding summer feeding programs for children.

His full statement is below:

Before embarking on a week-long tour of Asia, President Obama tried this morning to reassure Americans at home that the economy is recovering -- and that more jobs will soon come with it.

He said that his administration has taken "bold steps to break the back of this recession" and that the economy is "now growing again for the first time in a year," but that there is "not yet the job growth that we desperately need."

"This is one of the great challenges that remains in our economy," he said in a brief statement at the White House.

While there are limits to what government can do or should do, he said, his team will look at "every responsible step."

In the only new wrinkle, Obama announced a December "forum on jobs" to gather those ideas.
(His full remarks are below.)

While unemployment is at 10.2 percent nationally, a quarter-century high, there was a glimmer of hope today. The Labor Department reported that first-time jobless claims dropped to 502,000 last week, the fewest since the first week of 2009.

While foreign policy challenges such as North Korea will be on his agenda, Obama will also be talking about the global economic recovery on his stops in Japan, Singapore, China, and South Korea.

He said he will be pushing for a balanced world economy that is not as dependent on US consumption and borrowing.

The Republican National Committee put it in another light: "Mr. President, meet your creditors," it said in a missive, noting that Asian countries, especially China, are buying US government bonds that enable the federal government to borrow. Obama, the RNC said, is traveling to nations "he plans to borrow billions from in order to finance his reckless big-government experiments, historic deficits."

In this morning's appearance, Obama did not address the other major item on his agenda -- sending more troops to Afghanistan.

He held another war council on Wednesday, but presented with four options, he rejected all of them until he gets more assurances of when US troops would be able to leave Afghanistan. Obama's stance came as word leaked of cables from the US ambassador in Kabul who argued that a US troop surge would only prop up a weak, corrupt central government.

Senator John F. Kerry is cosponsoring a bill he announced today he will introduce to give more aid to small businesses that have military reservists on their payrolls.

Authored with Representative Ron Klein of Florida, the legislation would provide tax incentives for small businesses that make up the difference in salary between military and civilian pay while reservists are serving in Iraq or Afghanistan.

Many large businesses offer the supplements, but many small business owners, who employ 20 percent of reservists, can't afford to do the same.

“Our legislation supports the small businesses that stand by our men and women in uniform when reservists are deployed. It keeps our service members employed and small businesses open for business. In the face of a tough economy, we can do more to support the employers and reservists who make such profound contributions to our economy and national defense,” Kerry said in a statement.

Vice President Joe Biden heads to Michigan today to talk up the Obama administration's efforts to boost the economy.

He will meet with Michigan Governor Jennifer Granholm to discuss jobs, which are in short supply in a state where the recession started earlier than much of the country and where the unemployment rate is still the nation's highest.

UPDATE: According to the press pool report, Biden told a Democratic fund-raiser that the stimulus package and other economic programs are "working," but "we've got a long way to go."

But Biden said at least Democrats "get it" and want to make investments in energy and infrastructure that will grow the economy in the long term, while Republicans are "betting on us to fail."

Echoing the president, Biden also said it's easy to forget "just how horrible things were back in January," according to the pool report.

"This was an economy built on a bubble. The rules were being made by the cowboys on Wall Street."

Biden is being greeted by a radio ad from the Republican National Committee. (Listen to it here.)

“Back in February the Obama administration promised the so-called stimulus would bring much-needed jobs to Michigan. Nine months later, 178,000 more Michiganders have lost their jobs bringing unemployment to 15.3 percent – the highest in the entire country, and our nation’s employment rate now exceeds 10 percent," RNC Chairman Michael Steele said in a statement. "More than anything the people of Michigan need jobs, yet Vice President Biden and Michigan Democrats Mark Schauer and Gary Peters are spending their time fundraising. It’s time for the Democrats to make their constituents a priority and start working to bring jobs back to Michigan.”

Republicans are using the new unemployment numbers out today to pummel President Obama and the Democrats on their record on the economy -- the top issue for voters in Tuesday's election that gave the GOP the governor's offices in New Jersey and Virginia.

The Labor Department reported that the national jobless rate has exceeded 10 percent for the first time since 1983. The rate rose to 10.2 percent last month from 9.8 percent in September. Nearly 16 million people can't find jobs, and counting those who have settled for part-time jobs or stopped looking for work, the rate would be 17.5 percent, the highest on records dating from 1994.

Republican National Committee Chairman Michael Steele again attacked the $787 billion economic stimulus package, whose benefits cited in Obama administration reports have come under scrutiny.

"Since President Obama’s inauguration, the nation has watched the unemployment rate continue to climb, and unfortunately the month of October was no different," Steele said in a statement. "With so many families looking for work, it is time the Obama administration stop spreading their phony ‘saved or created’ talking points and start creating the dependable jobs America needs. President Obama promised jobs during his campaign for president, and the elections in Virginia and New Jersey on Tuesday were a clear referendum on his failure to deliver on this promise.”

And Representative Eric Cantor, the second-ranking Republican in the House, cited the new numbers to argue against the health care overhaul that House Democrats plan to push through as soon as Saturday.

"As unemployment tops 10 percent this holiday season, Republicans have put jobs and the economy first, and are focused on developing real solutions that will put Americans back to work. Increasing taxes on small business, as Democrats will do to pay for government run health care, is the wrong approach. Instead, we should work to empower small businesses to hire more workers, not penalize them further, costing even Americans their jobs," Cantor said in his statement.

“Americans, particularly those with friends, neighbors, and family out of work, are pleading with leaders in Washington to focus on jobs and the economy. From coast to coast, people are concerned with the direction that Washington is heading, and are tired of the spending, tired of the waste, and are pleading for their leaders to focus on jobs and the economy. With millions of Americans desperately seeking work, I ask the President put the economy first, and sit down with Republicans to develop bipartisan solutions that will change the direction of this economy and get people working again.”

Obama this week has touted his administration's efforts to rebuild the economy, while at the same time warning that unemployment would continue to rise until the recovery takes hold.

Today, Obama did sign an extension of jobless benefits -- 14 more weeks for those who have used up their benefits or will do so by the end of the year about 2 million nationwide, including as many as 40,000 in Massachusetts. Those in states such as Massachusetts where the jobless rate is 8.5 percent or above get an additional six weeks. It is the fourth such extension in the past 18 months. (The White House release on the bill is below.)

In a Rose Garden appearance this morning after signing the bill, Obama said the "sobering" jobless numbers underline the "economic challenges ahead."

He noted that the economy grew in the third quarter, but that "job growth always lags behind economic growth."

Obama vowed not to let up on creating jobs and said his administration is looking at additional incentives, tax cuts for businesses, and more measures to free up credit.

He said while it "will take time and patience," he's confident the economy will recover and the country is headed in the right direction. (His full remarks are below.)

Responding to the new numbers, the White House issued a statement this morning from Christina Romer, chairwoman of the President's Council of Economic Advisers, putting the best spin on them.

“Today’s employment report contained both signs of hope for recovery and painful evidence of continued labor market weakness," she said.

"Payroll employment declined 190,000 in October, continuing the steady trend of moderating job loss that began last spring. Furthermore, the employment loss in both August and September was revised down substantially. Importantly, employment in temporary help services, typically one of the first industries to see job gains, increased by 33,700. The motor vehicle industry also posted employment gains. These are hopeful signs that the unprecedented policy actions are working to stabilize the economy and put us on a path toward recovery.

"The unemployment rate, however, rose four-tenths of a percentage point, to 10.2 percent. That this occurred despite the rise in real GDP last quarter reflects both the typical lag between GDP growth and unemployment decline, and the recent exceptional increases in productivity. Having the unemployment rate reach double-digits is a stark reminder of how much work remains to be done before American families see the job gains and reduced unemployment that they need and deserve.”

By Lisa Wangsness, Globe Staff

WASHINGTON -- Governor Deval Patrick and House Speaker Robert A. DeLeo met with the state's congressional delegation at the Capitol this morning to discuss a variety of issues, including the national health care overhaul the House may begin voting on this weekend.

Patrick said the economic woes confronting Massachusetts were also a primary focus of the talks, which those who participated in them said also covered education, transportation and global warming.

"We are trying to project a reality to the public that is so in our working relationship -- we are working closely together, trying as best we can, with the tools we have, to bring some relief to people who are suffering and some hope to everybody," he said.

Patrick, who met with Health and Human Services Secretary Kathleen Sebelius Wednesday, said he was trying to make sure that the federal health care bills taking shape would not harm the state's health care system, which depends heavily on support from the federal government and provides far more generous subsidies for low-income people than the federal proposals on the table, and would provide the state the flexibility it needs to work on cost containment.

Representative Edward Markey, a Democrat from Malden and the dean of the delegation, said he is certain the House version of the legislation, which is scheduled to be voted on Saturday evening, would benefit Massachusetts.
"Our delegation is supporting the legislation because we know it does help Massachusetts," he said.

On his whirlwind two-day visit to Washington, Patrick is also meeting with other top administration officials, top Senate Democrat Harry Reid, and Massachusetts wounded at Walter Reed Army Medical Center. The governor is scheduled to have a brief audience this afternoon with his friend and ally, President Obama.

By Michael Kranish, Globe Staff

WASHINGTON -- House Financial Services Committee chairman Barney Frank, under fire from some fellow Democrats and consumer groups for carving out what they call loopholes in legislation designed to prevent another economic meltdown, said in a letter released tonight that "there may be a problem here'' and that he wants to reconsider.

The Globe reported on Saturday that an array of Democrats, consumer groups, and the chairman of the Commodities Futures Trading Commission were concerned that legislation pushed through the committee by Frank was not strict enough on the trading of derivatives.

Senator Maria Cantwell, a Washington Democrat, said in the article that loopholes played a major role in last year's meltdown and would continue under the bill backed by Frank. Gary Gensler, the CFTC chairman, called for tightening the oversight of derivatives trading would lower the risk of financial problems. A consumer group representative charged that Frank had "walked away" from concerns of unions and other organizations.

On Tuesday, Frank met with representatives of one of the consumer groups that had complained it was not allowed to present its concerns. Following the meeting, Frank sent a letter to Gensler and Mary Schapiro, the chairman of Securities and Exchange Commission, telling them he heard concerns about the bill and wanted "to further clarify the exception" allowing certain types of derivatives trading. The letter was released tonight.

Heather Booth, director of Americans for Financial Reform, said in an interview that she raised concerns about loopholes in the legislation and she said Frank responded that he would try to tighten such exemptions. Booth said she left the meeting encouraged. Booth stressed, however, that her group still has concerns about whether all of the loopholes will be closed.

"It's not over," she said.

The derivatives measure has already passed through Frank's committee. Frank said in his letter that he would try to amend the legislation when it reaches the House floor.

The trading of derivatives is one of the most controversial elements of financial reform. Derivatives are financial instruments whose value is based on underlying assets, such as real estate. They are used to bet or hedge on how those assets will change in value. The collapse of one type of derivative, an insurance product for subprime mortgages called credit-default swaps, played a major role in last year's financial crisis.

Frank has long said that he wanted to crack down on financial institutions that engage in derivatives trading, but he was concerned that he didn't want to hurt "end users" such as corporations that use the financial product to hedge against day-to-day business risks, such as currency fluctuations. As a result, certain end users were exempted from some of the oversight.

But critics of the legislation said they were concerned that the exemptions were so large that they could lead to risky trading that could put the economy at risk. Concerns were also raised that financial institutions could take advantage of the loopholes to avoid scrutiny.

Senators John F. Kerry and Paul G. Kirk Jr. praised the passage this afternoon of extended unemployment benefits expected to help as many as 40,000 Massachusetts residents.

The two Bay State senators had written top Senate Democrat last month urging him to bring the bill to the floor as quickly as possible, before the benefits ended. More information on the benefits is available here.

“Families across Massachusetts are hurting,” Kirk said in a statement. “With the unemployment rate unacceptably high and the winter months approaching, impossible decisions about whether to turn on the heat or put food on the table loom in many households in the Commonwealth. Passage of the Unemployment Insurance benefits extension will provide greater hope to those who continue to search for work during these harsh economic times.”

“This extension of a critical safety net will make it easier for families across Massachusetts to hang on in the toughest economy since the Great Depression,” Kerry added. “I am pleased that my Senate colleagues have joined Senator Kirk and I in recognizing the urgent need to protect our families.”

Speaking one year to the day he was elected, President Obama this afternoon used the anniversary to call for "a national mission" to improve public education and build it into a pillar -- along with an overhauled health care system and clean energy jobs -- of the new economy.

"One year ago, Americans all across this country went to the polls and cast ballots for the future they wanted to see. Election Day was a day of hope, it was a day of possibility, but it was also a sobering one because we knew even then that we faced an array of challenges that would test us as a country. We had a financial crisis that threatened to plunge our economy into a Great Depression, the worst we had seen in generations. We had record deficits, two wars, frayed alliances around the world," Obama said at Wright Middle School in Madison, Wisc.

He said his administration has saved the economy from "imminent collapse" and is now moving ahead on its second core obligation -- to rebuild the economy stronger than before.

"It was an obligation to tackle the festering problems that had been kicked down the road year after year, decade after decade; problems that have to be overcome America to move forward," Obama said. "....That’s why we’ve been pushing so hard on health care reform. That’s why we’re taking up the cause of a clean energy economy that will free America from the grip of foreign oil and generate millions of good-paying jobs in the process.... And that’s why we’re taking up the cause that I’m here to talk about today – that is offering the best possible education to America’s sons and daughters."

He listed some of public schools' woes: falling behind the rest of the world in math and science education, lowering standards for students, and the achievement gap continuing for African-American and Latino students.

"Of course, these problems aren’t new. We’ve heard about them for years. But instead of coming together to solve them, we’ve let partisanship and petty bickering stand in the way of progress. It’s been Democrat versus Republican, vouchers versus better public schools, more resources versus more reform. This status quo has held back our children, it has held back our economy, and it has held back our country long enough. It’s time to stop just talking about education reform and start actually doing it," Obama said.

To that end, he formally announced $4 billion in "Race to the Top" grants available to competing states that commit to real reforms that focus on teaching kids, raising standards, developing good teachers, and, when necessary, taking over or closing struggling schools.

Straying off his prepared speech, Obama said it's up to parents to instill in their children the desire to learn -- and told about his own daughters to make the point.

He said his elder daughter, 11-year-old Malia, came home recently from the swanky Sidwell Friends private school with a 73 on a science test -- far less than the 90 percent goal. She then got a 95 on the next one, but more importantly had learned a lesson, Obama said: "I just like having knowledge,' that's what she said."

Obama's full remarks are below:

As the White House declares that the economy is moving from crisis into recovery, President Obama meets this morning for the second time with his big-name advisory group "to discuss long-term, innovation based ideas to sustain growth and continue to create jobs of the future."

The Economic Recovery Advisory Board, named in November, includes CEOs of major corporations and union leaders.

UPDATE: "We have come a long way since January, when at that time we were losing 700,000 jobs per month and across the political spectrum I think there was fear of the possibility of another Great Depression," Obama said during the meeting.

"We have pulled the economy back from the brink. We got good news last week showing that for the first time in over a year the economy was actually growing once again. And we have seen some other indicators that manufacturing is beginning to pick up. That's all good news and we are pleased that the actions that we took swiftly through the Recovery Act helped to stem what could have been a disastrous situation for the economy and we are starting to see stabilization and, indeed, some improvement," he added.

"But the reason we're here today is because we just are not where we need to be yet," he said. "We've got a long way to go. We are still seeing production levels that are significantly below peak levels and most distressing is the fact that job growth continues to lag. Now, we all know that in every economic recovery there is going to be a lag between the economy growing again, businesses investing again and businesses hiring again. But given the severity of the job losses that took place at the beginning of the year and the need for us to make up a whole lot of job loss, is going to require I think some bold, innovative action on our part and on Congress's part and on the private sector's part." (His full remarks are below.)

But as the administration touts the third quarter GDP growth and the nearly 650,000 jobs it says have been saved or created by the $787 billion stimulus package, Republicans are continuing to criticize. They question the job numbers, point out that many of them are government positions rather than private-sector ones, and note that the unemployment rate continues to rise.

This morning, former Massachusetts Governor Mitt Romney, a potential Obama rival in 2012, said that "the stimulus that the president and the Congress passed is not what's helped the economy."

Instead, Romney said on "The Early Show" on CBS, the economy is rebounding because the private sector has regained its footing on its own.

President Obama wishes Americans a Happy Halloween -- and says that the latest numbers show the economy is getting far less scary.

In his weekly radio-Internet address today, Obama highlights the gross domestic product report earlier in the week that showed the economy growing at 3.5 percent.

"It is easy to forget that it was only several months ago that the economy was shrinking rapidly and many economists feared another Great Depression," the president says.

But he is quick to acknowledge "economic growth is no substitute for job growth." "And we will likely see further job losses in the coming days, a fact that is both troubling for our economy and heartbreaking for the men and women who suddenly find themselves out of work," he warns.

To stem those losses, Obama says the administration has taken steps to free up credit, prevent foreclosures, and cut taxes. He also touted the $787 billion economic stimulus package, asserting that "it is clear that the Recovery Act has now created and saved more than one million jobs. That’s more than a million people who might otherwise be out of work today – folks who can wake up each day knowing that they’ll be able to provide for themselves and their families."

Republicans would dispute that number, but Obama says it shows the country is back on the right track and building a more solid economy.

"I want to emphasize that there’s still plenty of progress to be made," he adds. "And positive news today does not mean there won’t be difficult days ahead. As I’ve said many times, it took years to dig our way into the crisis we’ve faced. It will take more than a few months to dig our way out. But make no mistake: that’s exactly what we will do."

UPDATE: House Republican leader John Boehner's response: “The ingenuity of hard-working Americans will be the engine of economic growth and a prosperous future. But the Administration’s claims about its trillion-dollar ‘stimulus’ just don’t pass the straight-face test. Americans were promised that it would keep unemployment from going above 8 percent, and would start working immediately. Neither have turned out to be true. No one is buying the latest claim that it created or saved 1 million jobs – a claim the Vice President acknowledged is not accurate. It’s time to get to work on policies that get our economy moving again and that don’t saddle our children and grandchildren with mountains of debt, taxes and unsustainable spending.”

Obama's full address is below and can be viewed here.

The Obama administration said this afternoon that more than 640,000 jobs have been saved or created under President Obama's economic stimulus plan at state and local governments, nonprofit groups, and universities.

The 640,329 are in reports covering approximately $160 billion, which represents a little less than half of the funds spent through Sept. 30. Counting jobs linked to $288 billion in tax cuts, White House officials say the $787 billion stimulus plan has already created or saved more than 1 million jobs.

“These reports are strong confirmation that the Recovery Act is responsible for over one million jobs so far and we are on-track to create and save 3.5 million jobs through the Recovery Act by the end of next year. This is another encouraging sign of progress following yesterday’s news that the economy has begun to grow again for the first time in more than a year, but the President and I will not be satisfied until monthly reports show net job growth. We are working every day to create more jobs and we will continue to report on our progress doing so with the Recovery Act in the same transparent way we did today,” Vice President Joe Biden, who is overseeing the stimulus, said in an event with Governors Arnold Schwarzenegger, the California Republican, and Martin O’Malley, the Maryland Democrat.

The official numbers were posted late this afternoon on the website of the independent board overseeing the stimulus. The state-by-state breakdown can be viewed here.

A separate report released today by Jared Bernstein, Biden's chief economist, asserted that the new data confirms the administration is on-track to meet its goal of creating and saving at least 3.5 million jobs by next year. The report also found that the states with the highest unemployment rates nationwide reported 25 percent more jobs created and saved per capita than the nation as a whole.

The government numbers include 23,533 jobs that officials say were retained as a result of spending $1.9 billion in federal stimulus money over the past eight months in Massachusetts. Governor Deval Patrick announced that estimate on Wednesday, but then on Thursday announced he would eliminate nearly 1,000 state jobs to help close a $600 million budget gap.

But the Republican National Committee is aggressively disputing the numbers, citing an Associated Press report this week that an earlier stimulus status report had overstated the jobs numbers.

"Today's release from the White House will be the fourth job report in the last two months," it said today. "With a pattern of these White House 'jobs created or saved' reports being published in close proximity to releases of real data from the U.S. Bureau of Labor Statistics (showing continuing job loss and rising unemployment), it is clear the Obama administration is trying to cover up economic reality by manufacturing job numbers out of thin air."

The politics of jobs numbers will be on full display the rest of the week.

The White House is crowing about the Commerce Department report this morning that the US economy grew by 3.5 percent in the third quarter, the highest growth rate in two years and the strongest sign yet that the worst recession since the 1930s is done.

The growth was fueled by consumers spending money on cars and homes provided in large measure by Obama administration programs. But many economists believe that the growth rate will slow as the impact wanes from the $787 billion economic stimulus package.

“Data released today by the Commerce Department show that real GDP grew at an annual rate of 3.5 percent in the third quarter of the year. This is in stark contrast to the decline of 6.4 percent annual rate just two quarters ago. Indeed, the two-quarter swing in the rate of growth of 9.9 percentage points was the largest since 1980. Analysis by both the Council of Economic Advisers and a wide range of private and public-sector forecasters indicates that the American Recovery and Reinvestment Act of 2009 contributed between 3 and 4 percentage points to real GDP growth in the third quarter. This suggests that in the absence of the Recovery Act, real GDP would have risen little, if at all, this past quarter,” the White House said in a statement.

“After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the U.S. economy is moving in the right direction. However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered. The turnaround in crucial labor market indicators, such as employment and the unemployment rate, typically occurs after the turnaround in GDP. And it will take sustained, robust GDP growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve.”

Republicans, meanwhile, are highlighting an Associated Press report that the initial job numbers from the stimulus package have been overstated by thousands. The AP said some jobs credited to the stimulus program were counted two, three, four or even more times.

While the administration claimed that federal contracts awarded to businesses under the recovery plan already had helped pay for more than 30,000 jobs, the AP said its limited review found the number was overstated at the very least by nearly 5,000, or one in six.

The story gave more ammunition to Republicans who argue that the stimulus has been a flop.

But the White House quickly issued a lengthy response.

"“This story draws misleading conclusions from a handful of examples. It looks at only a small portion of the data – an initial upload of data representing just two percent of Recovery Act spending – that was made publicly available before a full review of its accuracy could be done. Virtually all of the errors found by the AP had already been found by our review, and were already corrected in an update to be loaded onto Recovery.gov this week," said Ed DeSeve, a senior adviser to the president in charge of the stimulus package.

"Tomorrow, more than 100,000 recipient reports will be posted on Recovery.gov. Unlike the small number of reports reviewed by AP, these reports have been reviewed for weeks, errors have been spotted and corrected, and additional layers of review by state and local governments have further improved the data quality. As a result, whatever problems the early and partial data had, the full data to be posted on Friday will provide the American people with an accurate, detailed look at the early success of the Recovery Act,” he added in a statement.

The full White House statement is below:

A populist economic message -- and perhaps a little class warfare -- is alive and well today among Democrats and their allies.

In Washington, Senators John F. Kerry of Massachusetts and Max Baucus of Montana and Representatives Richard Neal of Massachusetts and Charles Rangel of New York introduced bills today that would crack down on wealthy Americans and businesses that hide assets in offshore tax havens.

"A small number of individuals and businesses hide their assets overseas solely in order to shirk their responsibilities, even as the vast majority of hard-working Americans honor the obligations of citizenship and fulfill their responsibilities," President Obama said in a statement cheering them on.

“Shortly after taking office, I laid out a set of proposals to crack down on illegal overseas tax evasion. The legislation introduced today would fulfill that promise, putting a stop to billions of dollars worth of abuses. I look forward to working with Congress to turn these proposals into law so that honest Americans no longer shoulder the burden of the few individuals and businesses that put profit before responsibility,” the president added.

Meanwhile in Chicago, the AFL-CIO is protesting outside the convention of the American Bankers Association.

"We're gathered here today to send a message to the bankers meeting inside, and the message is this: Business as usual is over. We are shutting it down. You work for us-not the other way around," AFL-CIO president Richard Trumka said. "Your job is to be stewards of our savings-to put and keep working families in homes, to lend the money companies need to create jobs. And you have failed. You've turned the American economy into your own private casino, gambling away our financial future with our money, driving us to the brink of a second Great Depression, then sticking out your hand for taxpayers to bail you out."

His full prepared remarks are below:

A senior White House economic adviser is trying today to make the economic case for a health care overhaul.

Republicans and other critics are warning that the president's proposals to remake such a significant portion of the US economy could hurt growth, balloon the federal deficit, and pinch recession-weary families.

But Christina Romer, chairwoman of White House Council of Economic Advisers, plans to tell the liberal Center for American Progress this afternoon that the only way to get the deficit under control is to trim health care costs, particularly in the government Medicare and Medicaid programs.

"Given the central role of rising health care expenditures, any solution to our long-run budget problem will simply have to include slowing the growth rate of health care costs,” Romer will say, according to advance excerpts released by the White House.

"Some have argued that it is irresponsible to reform our health care system at a time when the budget deficit is so large and our long-run fiscal problems are so severe. I firmly believe the opposite: it is fiscally irresponsible not to do health care reform.

State and local governments and private businesses alike would benefit from the health overhaul, she asserts. "Slowing the growth rate of health care costs will enable firms to once again give raises in the form of take-home pay rather than more expensive health insurance,” Romer plans to say.

“[F]iscally prudent health care reform that expands coverage to tens of millions of Americans and transforms our health care system to one that is higher quality and lower cost is possible.”

It's not quite as powerful as he wanted, but President Obama this afternoon praised the approval of a new consumer protection agency designed to prevent abuses by banks, lenders, and others.

The House Financial Services Committee, on a 39-29 vote, endorsed the Consumer Financial Protection Agency, one of the most contentious parts of a financial regulation overhaul that lawmakers hope will avert another meltdown like last year.

Republicans and the industry opposed the new agency and won many exemptions to the agency's oversight, including retailers, auto dealers, real estate brokers, and accountants. The committee's chairman, Barney Frank of Massachusetts, said the exceptions would make clear that the agency will monitor financial products and not every financial transaction of Americans. But he drew the line at Republican proposals, including one that would have exempted student loan providers.

The agency proposal will now be part of the bill that goes to the full House.

"I congratulate the House Financial Services Committee and Chairman Barney Frank on passing a bill out of Committee to establish the Consumer Financial Protection Agency," Obama said in his statement. "The Consumer Financial Protection Agency will prevent predatory lending practices and other abuses and will ensure that consumers get clear information they can understand about financial products like credit cards and mortgages.

"This bill has now passed a major hurdle and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change," the president added. "They are doing what they always do -- descending on Congress, using every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently those same American consumers bailed them out as a consequence of the bad decisions that they made."

The federal government's watchdog says that most local and state governments have yet to take steps to deal with global warming and its effects.

The report released today by the Government Accountability Office, requested by Representative Edward J. Markey of Massachusetts, says that officials are facing competing priorities, don't have localized information on the impact of climate change, and unsure of local, state, and federal roles. (Click here to read the report.)

“A robust answer to the threat of climate change includes preventing the worst impacts and preparing for the reality that global warming impacts are already occurring,” Markey said in a statement. “If we are going to avoid the worst effects of global warming, we must pass comprehensive clean energy and climate legislation. However, we also must prepare for the effects of global warming that will realistically occur.”

Markey, as chairman of the House Select Committee on Energy Independence and Global Warming, is holding a hearing on the issue today.

The sweeping climate change bill -- sponsored by Markey and Representative Henry Waxman of California and that was approved by the House in June -- would create programs and services to encourage adaptation efforts and provide nearly $25 billion.

President Obama is unveiling more help for the nation's small businesses today, hoping that they can hire more people and drive down the unemployment rate.

The package, already dismissed by Republicans as a repackaging of existing programs, is designed to make it easier for small firms to borrow money so they can expand.

"Over the past decade and a half, America’s small businesses have created 65% of all new jobs in this country. And more than half of all working Americans working in the private sector are either employed by a small business or own one – more than half. These companies are the engine of job growth in America. They fuel our prosperity. And that is why they must be at the forefront of our recovery," Obama said at Metropolitan Archives, a family-owned small business in Landover, Md., that recently expanded with an SBA loan.

"The problem is, our small businesses have been some of the hardest hit by this recession," Obama added. "From the middle of 2007 through the end of 2008, small businesses lost 2.4 million jobs. And because banks shrunk from lending in the midst of the financial crisis, it has been difficult for entrepreneurs to take out the loans they need to start a business. For those who do own a small business, it’s been difficult to finance inventories, make payrolls, or expand if things are going well."

(His full remarks are below.)

UPDATE: The No. 2 Republican in the House, Representative Eric Cantor of Virginia, responded to Obama by asserting that the real help small businesses need is freedom from new taxes.

“Small business job creators must be protected. While the President’s announcement that he will repackage some of the same SBA and TARP programs for small businesses is fine, it remains clear that neither this Administration nor the Speaker of the House understand the struggles that small business job creators face," Cantor said in a statement.

“As the President spoke today, Democrats in Congress continued their push for new taxes and mandates on small businesses to pay for their government health care overhaul – policies that will force many small businesses to close and cost even more workers their jobs. Today, I call on the President to pledge to small business job creators across this nation that he will veto any legislation that will raise their taxes."

The White House summary can be viewed here, and a rundown is below:

New Senator Paul G. Kirk Jr. of Massachusetts plans to join several colleagues Tuesday in pushing for passage of a bill to extend unemployment benefits.

"Unemployment insurance benefits began exhausting for jobless workers at the end of September, and nearly 2 million Americans will lose these benefits by the end of this year. Legislation to extend unemployment insurance for these workers has been held up in the Senate for nearly 2 weeks, despite repeated attempts by the Democratic leadership to pass this critical legislation," Kirk's office said.

Last month, the Massachusetts jobless rate rose to 9.3 percent, exceeding the peak during the early 1990s recession.

"In Massachusetts alone, more than 15,000 of our constituents have exhausted their UI benefits since the end of August. Another 4,000 are expected to run out of benefits before Thanksgiving, and as many as 40,000 individuals will have exhausted their benefits by the end of the year," Kirk and Senator John F. Kerry of Massachusetts wrote earlier this month to Senate Majority Leader Harry Reid.

"Americans have already suffered severe repercussions from the current deep recession, and they deserve better than to be stranded without any assistance. It is essential that an extension be passed without delay."

Kirk will be joined by Senators Jack Reed of Rhode Island and Jeanne Shaheen of New Hampshire, as well as Charles Schumer, Debbie Stabenow, Sherrod Brown, Bob Casey, Amy Klobuchar, and Al Franken.

But in this case, it's not Republican opposition that is gumming up the works. Instead, a bill that the House passed last month to give another 13 weeks of unemployment benefits to people from states where the jobless rate is at least 8.5 percent has bogged down because of resistance from lawmakers representing 23 states that have lower unemployment rates and would be left out.

Shaheen has been pushing for a bill that would extend unemployment benefits nationwide.

After a decidedly underwhelming count last week of jobs created by federal contractors hired under the $787 billion economic stimulus plan, the White House today asserted that the stimulus accounted for at least 250,000 education jobs across the country.

It said that "preliminary indications" are that state governments later this month will credit the recovery package with that total of jobs saved or created. The Domestic Policy Council, in cooperation with the US Department of Education, cited preliminary data on states using stimulus grants to restore nearly all of their projected education budget shortfalls for fiscal 2009 and 2010, thereby averting layoffs of educators in school districts and universities across the nation. Click here to see the report.

"This is one more indication of how the Recovery Act is helping soften the blow of tough times, by keeping educators on the job and teachers in the classroom," Vice President Joe Biden, who is overseeing the stimulus plan, said in a statement.

UPDATE: Par for the course, Republicans expressed deep skepticism about the administration's findings.

"From coast to coast, families and small business job creators believe that to date, the President’s policies have not created jobs, and no amount of campaign-style events or spin will change that reality unless there is significant change in the Administration’s policy," Brad Dayspring, a spokesman for No. 2 House Republican Eric Cantor, said in a statement. "Rather than even more deficit spending, Republicans continue to offer solutions that empower small business job creators to put Americans back to work and safeguard our children from the Democrats’ endless spending binge. The House Republican economic working group, led by Republican Whip Eric Cantor, continues to focus on policy solutions that get people working again and ensure that America’s economy once again provides opportunity for all. "

In its latest effort to prove that its $787 billion economic stimulus package is working, the Obama administration today released new data showing that federal contractors using stimulus cash created or saved about 30,400 jobs, including nearly 600 in Massachusetts.

The figure represents the payoff from only the first $16 billion in spending, but is the first hard data on the recovery package, which has been assailed by critics who point to rising unemployment, at 9.8 percent last month. The White House has previously relied on economic models for its estimates of success.

"It is too soon to draw any global conclusions from this partial and preliminary data, as it reports on just $16 billion of the $339 billion in Recovery Act efforts before September 30th, but the early indications are quite positive," Vice President Joe Biden's chief economist Jared Bernstein said in a statement. "The direct count by Recovery Act recipients of jobs created or saved from this small percentage of the Recovery Act exceeds our projections. All signs -- from private estimates to this fragmentary data -- point to the conclusion that the Recovery Act did indeed create or save about 1 million jobs in its first seven months, a much needed lift in a very difficult period for our economy. We look forward to the much larger, comprehensive report due on October 30th.”

Republicans, however, quickly asserted that the new figure -- which counts only those directly hired by contractors that received stimulus money -- is far smaller than the 600,000 to 1.1 million estimate of jobs saved or created that the White House Council of Economic Advisers put out last month.

Biden, put in charge of overseeing the stimulus, will be in St. Louis today to tout how the package is creating jobs and aiding law enforcement.

President Obama, who vows to support science in contrast to his predecessor, is touring one of the nation's epicenters for research today to announce that $5 billion in grants have been awarded for cutting-edge work.

Obama is at the National Institutes of Health in Bethesda, Md., and is announcing that the institute has already handed out more than 12,000 grants from the $10 billion it received from the economic stimulus package he championed.

He said the grants are expected to create tens of thousands of jobs over the next two years and are part of a total of $100 billion in the stimulus package that is broadly going to science and technology.

“We know that this kind of investment will also lead to new jobs: tens of thousands of jobs conducting research, manufacturing and supplying medical equipment, and building and modernizing laboratories and research facilities,” Obama said in a statement. “I’ve long said, the goal of the Recovery Act was not to create make-work jobs, but jobs making a difference for our future. There is no better example than the jobs we will produce or preserve through the grants we are announcing this morning.”

The grants include $1 billion for research, using the technology produced by the Human Genome Project, to study genetic changes linked to cancer, heart, lung, and blood disease and autism -- in hopes of finding new treatments and cures. Of the money, $175 million will go to collect more than 20,000 tissue samples from more than 20 cancers, and determine in detail all of the genetic changes in thousands of these tumor samples.

“This historic investment demonstrates this administration’s commitment to pushing the boundaries of science and turning those discoveries into benefits for the American people. NIH researchers and grantees are already conducting some of the world’s most groundbreaking biomedical research," added Health and Human Services Secretary Kathleen Sebelius, who is accompanying Obama on the tour. “These awards will accelerate our progress towards the new medicines, treatments, and cures that will help Americans live longer, healthier lives."

UPDATE: Senators John Kerry and Paul Kirk today announced that Massachusetts will receive a total of $434,036,356 in Recovery Act funding for cutting edge medical research. The funding comes in the form of 1,148 separate grants for 84 schools and organizations across the state.

The funding will be used to support the full spectrum of medical research – from clinical studies to basic research.

“These significant investments in medical research across Massachusetts will save lives, create jobs and ensure that our state remains a world leader in medical technology,” said Senator John Kerry. “12,000 grants were awarded nationwide and more than 1,000 right here in our state. I'm grateful that President Obama has once again recognized the cutting edge work being done by our medical institutions.”

Senator Paul G. Kirk said, “These grants are well-deserved and will enable our world class universities, hospitals and research centers across the Commonwealth to continue their groundbreaking work in medical research. Massachusetts is and will continue to be a leader in this field, and I commend the Obama Administration for committing these essential funds.”

Obama's full remarks are below:

Vice President Joe Biden, overseeing the $787 billion economic stimulus plan, today announced a new series of goals -- by year's end.

Biden last set benchmarks in early June for 200 days since the bill was signed into law -- and they were all met, though Republicans and other critics questioned how ambitious they really were.

“We’ve made great progress in the first seven months of Recovery Act implementation in 2009 – now we want to finish the year even stronger,” Biden said in a statement. “We want to continue to be ahead of schedule on key metrics, doing all we can to create and save jobs, and building a lasting economic platform for our country.”

(His remarks at a recovery package meeting with Cabinet officials today are below.)

The new goals, according to Biden's office:

· Batteries for Vehicle Electrification: By the end of the year, the Department of Energy will have put in place funding for battery manufacturing plants that can power 400,000 plug-in hybrid electric vehicles, each year.
· Military Hospitals: The Department of Defense will begin 34 construction and modernization projects at hospitals and medical centers throughout the country over the next 90 days, for a total of 65 hospitals and medical centers with projects under construction since passage of the Act.
· National Parks: The Department of Interior will begin on-site construction improvement work in 105 more national parks throughout the country over the next 90 days.
· Small Business Assistance: The Small Business Administration will provide and leverage $5 billion in capital to over 12,000 small businesses through two key lending programs (7a and 504) in the next 90 days.
· Fuel Efficient Bus Purchases: By the end of the year, the Federal Transit Agency will have awarded enough grants to enable the purchase of approximately 10,000 new transit vehicles across the country.
· Housing Loans and Rehabilitation: By the end of the year, the Department of Agriculture and the Housing and Urban Development Department will have provided housing loans and capital funding to finance, build, or renovate over 100,000 households across America.
· Renewable Energy: By the end of the year, the Departments of Energy and Treasury will help fund renewable energy projects that will generate enough alternative energy to power 900,000 homes in the United States once completed.
· Road Projects: By the end of the year, the Department of Transportation will have obligated enough funds to support 10,000 highway projects.

UPDATE: Republicans quickly pointed out that the goals don't include a specific number of jobs -- the bottom-line reason for the stimulus spending.

Last month, White House economists estimated that the recovery package had saved or created 1 million jobs, toward a goal of 3.5 million by the end of 2010. But Republicans and many economists cast doubt on those figures, and point out that the Labor Department says that 2.4 million jobs have been lost during the recession since Obama signed the stimulus bill in February.

The office in charge of overseeing the $787 billion economic stimulus package opened its new and improved website for business today.

The portal (click here) features several different ways to track how the money is being spent, including by state (Massachusetts has received nearly $5.6 billion so far) and by agency.

“Today’s launch of the latest version of Recovery.gov marks a significant step forward in our efforts to provide unprecedented transparency and accountability of Recovery Act dollars at work," Vice President Joe Biden, put in charge by the president, said in a statement.

"Visitors to the site now have at their fingertips agency-level information about every area of Recovery Act spending through new interactive maps, graphs and other user-friendly features – and this is just the beginning. Starting next month, this pioneering project will go even farther with the posting of data directly from recipients showing how they have put Recovery dollars to work on projects nationwide. I applaud the work of Earl Devaney and his team at the Recovery Accountability and Transparency Board leveraging the latest technology to provide the public with more information about their taxpayer dollars at work than with any previous program in the history of our government. And I look forward to watching Recovery.gov continue to grow along with the Recovery Act.”

Vice President Joe Biden jumped all over the congressional watchdog's report on the Obama administration's economic stimulus plan, saying the report shows that the stimulus is working.

“Today’s report from the Government Accountability Office confirms what I have been hearing from people across the country: the Recovery Act is working to jump-start critical infrastructure projects, cushion the impact of record state budget deficits and provide new job opportunities for hard-hit communities," Biden, who has been put in charge of making sure the stimulus money is not wasted, said in a statement.

"As the GAO notes, Recovery Act funds are being put to work ahead of schedule, and project bids are frequently coming in under-budget -- with the millions of dollars of cost-savings often redirected to communities that need the economic boost the most. The fact that a survey of nine major Recovery Act programs across sixteen states by the government’s top watchdog, showed such significant progress is a testament to the care with which we have put taxpayer dollars to work.”

“We look ahead to receiving the first reports directly from recipients of Recovery Act funds next month on what it has meant for their business or organization. We appreciate the GAO’s recommendations for carrying out that process. I am also stressing to agencies the importance of responding to the GAO’s other recommendations for improvements in execution and oversight of this highly complex effort.”

Biden didn't mention, however, that the GAO also warned that a government's plans to measure the success of a $1.2 billion jobs program for teenagers are so lax that they "may reveal little about what the program achieved.

The Associated Press reports that many teens didn't get jobs, partly because unemployed adults sought the same low-wage, entry-level positions. Youth unemployment rates hit 18.5 percent in July, the highest rate measured among 16- to 24-year-olds in that month since 1948, the AP notes.

Republicans have also kept up a barrage of criticism of the stimulus, saying it hasn't created the promised jobs.

Before taking the world stage the rest of the week, President Obama held one last economy event today, focusing on his hope that innovation will reverse painful job losses.

He toured and spoke at Hudson Valley Community College in Troy, N.Y., the beneficiary of $2 million in federal grants to retrain workers in clean energy work. He is being accompanied by Jill Biden, the wife of Vice President Joe Biden and a long-time community college instructor.

Obama declared that manufacturing cities like Troy have been hit hard during the economic downturn, but innovation jobs hold the promise of rebirth.

"There are those who suggest that nothing government can do will make a difference; that what we’ve seen in places like Troy is inevitable; that somehow, the parts of our country that helped us lead in the last century don’t have what it takes to help us lead in this one," the president said. "I am here today to tell you that this is just flat out wrong. What we have here is a community filled with talented people, entrepreneurial small businesses, and world-class learning institutions. The ingredients are right here for growth and success and a better future."

Citing local projects in nanotechnology and a semiconductor plant, he said that his innovation strategy will lead to "sustained growth and widely shared prosperity."

"Our strategy begins where innovation so often does: in the classroom and in the laboratory – and in the networks that connect them to the broader economy. These are the building blocks of innovation: education, infrastructure, and research," he said.

(His full remarks are below.)

The White House says that Obama's "innovation strategy" builds on more than $100 billion from the stimulus package. "It seeks to harness the inherent ingenuity of the American people and a dynamic private sector to ensure that the next expansion is more solid, broad-based, and beneficial than previous ones. It focuses on critical areas where sensible, balanced government policies can lay the foundation for innovation that leads to quality jobs and shared prosperity," the White House said in its release.

The full release is below:

Following up on his speech on Wall Street earlier this week warning that financial firms can't return to business as usual, President Obama uses his weekly address to put on the hard sell for his proposal to create a new agency to oversee consumer loans.

The Consumer Financial Protection Agency is a centerpiece of the financial regulation overhaul sought by Obama and his Democratic allies in Congress. But it is strongly opposed by much of the financial industry.

"Part of what led to this crisis were not just decisions made on Wall Street, but also unsustainable mortgage loans made across the country. While many folks took on more than they knew they could afford, too often folks signed contracts they didn’t fully understand offered by lenders who didn’t always tell the truth. That’s why we need clear rules, clearly enforced. And that’s what this agency will do," Obama says in his weekly radio and Internet address.

"Consumers shouldn’t have to worry about loan contracts written to confuse, hidden fees attached to their mortgages, and financial penalties – whether through a credit card or debit card -- that appear without a clear warning on their statements. And responsible lenders, including community banks, trying to do the right thing shouldn’t have to worry about ruinous competition from unregulated and unscrupulous competitors."

Obama notes the opposition, but argues, "We cannot let the narrow interests of a few come before the interests of all of us. We cannot forget how close we came to the brink, and perpetuate the broken system and breakdown of responsibility that made it possible."

In the address, the president also pledges to continue to work on the economic recovery with other world leaders, whom he will meet at the G-20 summit in Pittsburgh next week.

The full remarks are below, and can be viewed here.

President Obama is in union country today to talk up his economic agenda, and get in a plug for his health plan as well.

In a campaign-style speech this morning at the GM plant in Lordstown, Ohio, Obama vowed to stand up for working people who helped put him in office.

He acknowledged the long-running economic crisis in the industrial Midwest, but said he's not willing to accept it.

"There are some who see this pain and suggest that it's all somehow inevitable -- that the only way for America to get ahead is for communities like yours to be left behind. But I know better. We know better," Obama said. "We know that our success on a nation depends on the success of communities just like this one. We know that the battle for America's future is not just going to be won in the big cities, not just on the coasts, but in towns like Elkhart, Indiana, and Pittsburgh, Pennsylvania; Warren, Ohio, and Youngstown.

"You deserve better than the attitude that's prevailed from Washington to Wall Street to Detroit for too long; an attitude that valued wealth over work, selfishness over sacrifice, and greed over responsibility. And that's why I want you to know that every day I step into the Oval Office, I am thinking about you, I am working for you, and I am fighting on your behalf," he added.

Obama said his administration has already been doing so, with the government support for GM and other automakers, the cash-for-clunkers program, and the push for more fuel-efficient vehicles.

"There's little debate that the decisions we've made and the steps we've taken have helped stop our economic freefall. In some places, they've helped us turn the corner. Home sales are up, business investment is starting to stabilize, for the first time in 18 months, we are actually seeing growth in American manufacturing instead of decline. I know that's small consolation when so many people you know are still out of work. It's going to take some time to achieve a complete recovery. But I want you to know: I will not rest until anyone looking for a job can find one - and I'm not talking about just any job; but good jobs that give every family decent wages, decent benefits, and a fair shot at the American Dream. That's what I'm fighting for every day," Obama said.

"And yes, just in case you were wondering, we are fighting for an America where no American should have to worry about going without health insurance or fear that one illness could cost them everything. We're going to reform the system to provide more security and stability to those of you who have health insurance; we're going to offer quality, affordable choices to those who currently don't have health insurance; and bring health care costs for our families, our businesses, and our government under control."

(His full remarks are below.)

UPDATE: This afternoon, Obama was greeted with rapturous applause and cheers at the AFL-CIO national convention in Pittsburgh.

"You guys are making me blush," the president said. "The White House is pretty nice, but there's nothing like being back in the house of labor."

Obama paid tribute to outgoing AFL-CIO president John Sweeney and incoming chief Richard Trumka and said that being with union members reminds him of what's important in Washington and why he ran for president.

He wants to help working families reach the American dream, he said, telling of a union member choking up when talking about not being able to afford health coverage for his wife.

"When our middle class succeeds, that's when the United States of America succeeds," he declared.

He won some of his biggest applause when he expressed support for labor's biggest legislative priority -- a bill that would make it easier for workers to organize.

The bill is vehemently opposed by business groups and Republicans, and has languished in Congress. Labor leaders have hinted that they would accept a compromise that would force quicker elections, rather than the original bill that would remove the requirement for secret union elections.

He also gave an impassioned pitch for his health care overhaul, saying that union members know well that many families are one medical emergency away from financial ruin and need coverage that they can count on.

"How much longer do we have to wait?" Obama asked. "We can't wait."

"We can't wait!" the crowd chanted in reply.

(His full remarks to the AFL-CIO are below.)

Big labor was a big reason why Obama won the presidency, and the Republican National Committee sent out a research paper suggesting that he's still beholden to unions with policies that will damage the US economy.

Speaking one year to the day from when the collapse of Lehman Brothers threatened the entire US financial system, President Obama declared today that it's time for the federal government to extract itself from rescue efforts.

But he also asserted that to prevent a similar meltdown, the government needs to impose stricter and more sweeping regulations.

He started what the White House billed as a "major" speech by reminding Americans how close the economy came to the brink.

"This was no longer just a financial crisis; it had become a full-blown economic crisis, with home prices sinking, businesses struggling to access affordable credit, and the economy shedding an average of 700,000 jobs each month," Obama said.

Thanks to the government support to Wall Street, the loosening of credit, and the $787 billion economic stimulus package, the economy is on the road to recovery, the president said.

"Eight months later, the work of recovery continues. And though I will never be satisfied while people are out of work and our financial system is weakened, we can be confident that the storms of the past two years are beginning to break," Obama said.

"In fact, while there continues to be a need for government involvement to stabilize the financial system, that necessity is waning," he added. "After months in which public dollars were flowing into our financial system, we are finally beginning to see money flowing back to taxpayers. This doesn’t mean taxpayers will escape the worst financial crisis in decades entirely unscathed....While full recovery of the financial system will take a great deal more time and work, the growing stability resulting from these interventions means we are beginning to return to normalcy."

"But here's what I want to emphasize is this: normalcy cannot lead to complacency," Obama argued.

And that means new and improved regulation -- what he called "the most ambitious overhaul of the financial system since the Great Depression" -- that includes a new Consumer Financial Protection Agency to enforce new rules safeguarding the public and an oversight council to bring together regulators from across markets so problems don't slip through the cracks.

His audience at Federal Hall in the heart of New York's financial district included Treasury Secretary Timothy Geithner, the president's Economic Recovery Advisory Board, leaders of consumer advocacy groups, Wall Street CEOs, and members of Congress, including Representative Barney Frank of Massachusetts, who with Senator Christopher Dodd of Connecticut is shepherding financial regulatory reform.

"We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses," Obama vowed. "Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall."

The president said he believes in free markets and wanted to work with the financial industry to come up with the regulations. But he also said the firms receiving help owe a debt to American taxpayers and that those who oppose government intervention do so at their own peril.

"I certainly did not run for president to bail out banks or intervene in the capital markets," he said. "But it is important to note that the very absence of common-sense regulations able to keep up with a fast-paced financial sector is what created the need for that extraordinary intervention. The lack of sensible rules of the road, so often opposed by those who claim to speak for the free market, led to a rescue far more intrusive than anything any of us, Democrat or Republican, progressive or conservative, would have proposed or predicted," he said.

"What took place one year ago was not merely a failure of regulation or legislation; it wasn't just a failure of oversight or foresight. It was also a failure of responsibility -- it was fundamentally a failure of responsibility -- that allowed Washington to become a place where problems – including structural problems in our financial system – were ignored rather than solved," he chided. "It was a failure of responsibility that led homebuyers and derivative traders alike to take reckless risks they couldn’t afford. It was a collective failure of responsibility in Washington, on Wall Street, and across America that led to the near-collapse of our financial system one year ago....

"One year ago, we saw in stark relief how markets can spin out of control; how a lack of common-sense rules can lead to excess and abuse; how close we can come to the brink. One year later, it is incumbent upon us to put in place those reforms that will prevent this kind of crisis from ever happening again; reflecting the painful but important lessons that we’ve learned; and that will help us move from a period of recklessness and one of crisis to one of responsibility and prosperity. That is what we must do. And I’m confident that is what we will do."

(His full remarks are below.)

Republicans immediately warned against a bigger government role in the markets, saying that taxpayers will ultimately pay.

“For the average American, the best measure of the economy is whether or not they have a job so they can pay the mortgage, make the car payment and put food on the table. For more than 3 million Americans who have lost their jobs this year, the president’s policies have been a failure," Republican National Committee chairman Michael Steele said in a statement.

"His $787 billion stimulus bill has led to wasteful spending but hasn’t created the jobs he promised. And every time he has wanted to expand the government’s influence over the economy and our daily lives, from his takeover of GM and banks to his proposed government-run takeover of our health care, it has meant spending more money we don’t have and digging America deeper into debt. Those are the real results of the president’s experiments on our economy, and no amount of speeches will convince the American people otherwise.”

The top House Republican, Representative John Boehner of Ohio, faulted Obama for not saying more clearly how taxpayers will be taken off the hook for the financial bailouts.

"Missing from the President’s remarks today was a clear exit strategy for the federal government’s involvement in the private sector. American taxpayers have had enough of open-ended bailouts that have left them stuck with an eye-popping tab in the form of trillions in new debt. This generational theft must end. If the President wants to restore consumer and investor confidence, he should work with Republicans in Congress to craft policies that help hard-working families and small businesses weather this storm and get back to creating good-paying jobs," Boehner said in a statement.

“With consumer spending just about frozen and unemployment near double-digit levels, the last thing we need are new layers of bureaucracy and burdensome regulations that restrict access to financial products and discourage economic growth. House Republicans have delivered a to reform our financial system smartly by bolstering anti-fraud protection efforts, streamlining the hodgepodge of confusing federal agencies, and strengthening transparency and accountability so that consumers can make informed choices. We hope Democrats will work with us on responsible solutions as Congress moves forward on this issue.”

Displaying once again the close coordination between policy and politics, the Democratic National Committee released a web video this morning to buttress President Obama's "major" speech marking the one-year anniversary of the Lehman Brothers collapse that precipitated the Wall Street crisis.

The web ad starts with the words "One year ago" on screen, then shows a series of news reports on the financial meltdown, with commentators talking about crisis, crash, perhaps another Great Depression. "Lest we forget," it ends.

In his speech at Federal Hall in New York, scheduled for shortly after noon EDT, Obama is expected to talk about the steps he has already taken to rescue the economy from the brink and to call for sweeping new financial regulations to avert another crisis.

But Republicans question the value of the $787 billion stimulus bill and warn about more government intervention in the markets.

And a new Associated Press-GfK poll found that the public remains deeply concerned about the economy. About 80 percent said the economy is in poor condition and about 70 percent said they are not confident that the federal government has taken safeguards to prevent another financial meltdown. Only 17 percent of those surveyed said the stimulus has improved the economy, though that's up 10 percentage points from July.

The poll, conducted Sept. 3-8, has a margin of sampling error of plus or minus 3.1 percentage points.

President Obama's economists asserted today that the economic stimulus package he championed had created or saved "slightly more" than 1 million jobs so far.

The White House Council on Economic Advisers said that the $787 billion stimulus bill has had "particularly strong effects in manufacturing, construction, retail trade, and temporary employment services." While the benefits have been spread across the country, states most hurt by the recession have been helped most, it said.

The council also said that about $151 billion has been spent so far, and that the stimulus added 2.3 percentages to the real growth of the economy during the second quarter. (Click here to read the report.)

The council's first quarterly report to Congress on the stimulus represents the latest salvo in the war of statistics on the $787 billion stimulus bill.

Obama promised it would create or save 3.5 million jobs by the end of next year. But critics have questioned the figures as far too rosy and said that it is extremely difficult to determine whether a job has been "saved."

The administration has acknowledged that the recession was deeper than it believed when it pushed Congress to pass the plan in January. Unemployment is still hovering near 10 percent nationally, and the Labor Department reported last week that since the recession began in December 2007, the jobless rolls grew by 7.4 million Americans.

Republicans kept up their stimulus skepticism in response to the council's report.

“Today’s White House jobs report is one more example of this administration’s use of smoke and mirrors to mask the failure of the Democrats’ costly $787 billion stimulus bill," Republican National Committee Chairman Michael Steele said in a statement.

"The reality for countless Americans whose jobs have not been ‘saved’ is they get to join the ranks of the three million neighbors, friends and family members who have become unemployed since President Obama took office," he added. "We have watched the unemployment rate increase to 9.7 percent and seen more than 216,000 workers lose their jobs in the past 30 days. The president’s economic stimulus experiment clearly isn’t working as promised. Another report to claim phantom jobs have been ‘saved or created’ won’t convince people otherwise.”

In the game of musical chairs occasioned by the death of Edward M. Kennedy, Senator Christopher Dodd announced this afternoon that he will stay as chairman of the Banking Committee and not take over the health panel, where he had filled in for Kennedy during his illness.

Instead, Senator Tom Harkin of Iowa will move from Agriculture to the health committee. Harkin, as was Kennedy, is firmly in the liberal wing of the Democratic party.

Senator Blanche Lincoln of Arkansas will rise to the chairmanship of Agriculture.

"We all had hoped that Teddy would be able to come back to see this through," Dodd said in a statement. "Unfortunately, that wasn’t possible. But I intend to keep the promise I made. And so, I am pleased that I will able to continue the role he asked me to take on as the HELP Committee’s leader on health care reform."

"But we have important work to do on the Banking Committee, and I intend to see it through as chairman. The Banking Committee is of vital importance to Connecticut, responsible for issues central to the economic security and prosperity of the people of my state."

Dodd's perch on Banking, where he will work on financial regulation overhaul with House Financial Services Chairman Barney Frank of Massachusetts, will give him continued access to campaign cash in his tough reelection fight next year.

But it also got him in political hot water when critics accused him of getting too cozy to Wall Street during the meltdown.

Meanwhile, Service Employees International Union quickly applauded Harkin's move, saying that it is counting on his help to pass a health care bill, as well as a bill to make it easier for unions to organize, and an immigration overhaul.

"America’s working families have learned to count on Senator Harkin to stand up and fight for the issues that will help to ensure the American Dream is alive and well for their children and grandchildren. As the son of a coal miner, Senator Harkin understands how Congress and organized labor can work together to pass legislation that ensures quality and affordable healthcare, a fair economy, a safe workplace and a secure retirement," SEIU Secretary-Treasurer Anna Burger said in a statement.

John Sweeney, president of the AFL-CIO, the nation's largest labor federation, also praised the leadership changes.

"It is great news for America's workers that a longtime friend of working families is taking the helm at the Senate Labor Committee. Although no one can replace Senator Kennedy, Tom Harkin brings just the right balance of passion and skill to the job of protecting working men and women, educating our children and looking out for our health," Sweeney said in a statement.

"We are also pleased that Senator Dodd will stay on as Chair of the Banking Committee to continue the important work of cleaning up Wall Street and putting in place sensible regulations to make sure we do not have a repeat of the recent financial meltdown. Both Senators Harkin and Dodd face great challenges as they work to make meaningful progress on the issues that affect the lives of working people, and we look forward to working closely with both of them in the months and years ahead."

Republicans immediately sought today to capitalize on the new unemployment numbers to press their argument that President Obama's economic stimulus package is failing.

The Labor Department reported today that the jobless rate rose to 9.7 percent last month from 9.4 percent in July after 216,000 more Americans lost their jobs. It is the highest rate since 1983, and analysts say it shows that while the economy is improving, a sustained recovery will be difficult at best.

UPDATE: Vice President Joe Biden, who on Thursday led the cheerleading for the $787 billion stimulus package, said this afternoon that the administration will not be satisfied until "we're adding, not losing, thousands of jobs a month."

He cited an analysis that the stimulus package saved or created at least 500,000 jobs in its first 200 days, a milestone that hits Saturday -- or in other words, that another 500,000 jobs would have been lost without the recovery package.

Biden spoke as he announced a $535 million loan guarantee for a Fremont, Calif., company that makes solar panels. “This announcement today is part of the unprecedented investment this Administration is making in renewable energy and exactly what the Recovery Act is all about,” Biden said in a statement. “By investing in the infrastructure and technology of the future, we are not only creating jobs today, but laying the foundation for long-term growth in the 21stcentury economy.”

But Republican National Committee Chairman Michael Steele beat him to the punch.

“Yesterday, Vice President Biden gave yet another speech to try to convince the American people that President Obama’s stimulus bill is creating the jobs he promised. In fact, Vice President Biden said that he believes the Administration has ‘met or exceeded’ their goal to create or save 600,000 jobs in the past 100 days. Today’s unemployment report proves that this Administration is ignoring reality," Steele said in a statement.

"The unemployment rate jumped to 9.7 percent. More than 216,000 Americans lost their jobs in the month of August alone. That means more than 3 million Americans have lost their jobs since the president took office. The president’s economic experiment simply isn’t working, and Americans shouldn’t expect his government-run health care experiment to work, either.”

Not a single House Republican voted for the stimulus bill, and Representative John Boehner, the GOP leader in the House, chimed in with his own statement that also tried to use the jobless numbers to continue his assault on Obama's health care overhaul plans.

"Where are the jobs? Approximately 2.4 million private-sector jobs have been destroyed since February 2009. In light of these numbers, it is more clear than ever that the President and the leaders of his party in Congress need to abandon their plans for a job-killing government takeover of health care and work with Republicans for a more responsible approach to health care reform. The Democrats' bloated 'stimulus' isn't working, and we can't afford another trillion-dollar mistake on the backs of our children and small businesses," Boehner said.

"It is increasingly clear that as a consequence of this administration's misguided policies, any economic recovery that lies ahead will be a jobless one hampered by massive new debt. This is not what the American people were promised; nor is it what they deserve. Better solutions were offered in good faith by Republicans but rejected by the Administration in favor of what has proven to be a trillion-dollar mistake. The Administration said its bloated 'stimulus' would create millions of jobs and keep the unemployment rate from going above 8 percent. Instead, unemployment has now soared to nearly 10 percent, millions of jobs have disappeared, and massive new debt has been needlessly piled on future generations," Boehner continued.

"Washington Democrats must listen to the American people and abandon their plans to impose a job-killing government takeover of health care and a new job-killing national energy tax. Both will inflict further harm on small businesses and wipe out millions of additional American jobs, compounding the costly mistake of the flawed 'stimulus.’ It’s time for the President to hit the reset button and work with Republicans for better solutions, before more debt is piled on our children and more American jobs are destroyed."

President Obama, taking a quick break from week two of his vacation, jumped on the latest economic numbers to declare that his recovery program is working.

A key indicator of manufacturing activity grew last month for the for first time in 18 months.

That shows that companies are making more cars, computers, appliances, and other goods, Obama said.

"It means these companies are starting to invest more and produce more, and it is a sign that we're on the path to economic recovery," the president said, diverting from planned remarks on the H1N1 flu to brag.

But he added, as usual, that there is a "long way to go" and that he and his administration will not let up until Americans -- nearly 10 percent of whom are still unemployed -- can find jobs.

Still, Obama said, "this is another important sign that we're heading in the right direction, and that the steps we've taken to bring our economy back from the brink are working."

Taking a quick break from his Martha's Vineyard vacation, President Obama this morning announced he is nominating Federal Reserve Chairman Ben Bernanke for a second four-year term.

Bernanke, who has economics degrees from Harvard and MIT, has played a key role in dealing with the financial meltdown last year and now in lifting the nation out of recession. His current term expires Jan. 31, and Bernanke, a Republican originally picked by George W. Bush, would need reconfirmation by the Democratic Senate to keep his job.

"As an expert on the causes of the Great Depression, I’m sure Ben never imagined that he would be part of a team responsible for preventing another. But because of his background, his temperament, his courage, and his creativity, that’s exactly what he has helped to achieve," Obama said.

"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall."

UPDATE: Senator Chris Dodd of Connecticut, chairman of the Banking Committee that will hold Bernanke's confirmation hearing, offered qualified support.

"While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice,"  Dodd said in a statement.  "Chairman Bernanke was too slow to act during the early stages of the foreclosure crisis, but he ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets."

"There will be a thorough and comprehensive confirmation hearing.  I still have serious concerns about the Federal Reserve’s failure to protect consumers and I strongly believe these responsibilities should go to an independent consumer financial protection agency.  I expect many serious questions will be raised about the role of the Federal Reserve moving forward and what authorities it should and should not have."

While Wall Street appears to be responding well to Obama re-upping Bernanke's tenure, he is not without his critics.

Senator Bernie Sanders, the Vermont independent, issued a scathing statement:

"As a result of the greed, irresponsibility and illegal behavior of Wall Street our country has experienced the worst economic decline since the Great Depression. Mr. Bernanke was head of the Fed and the nation's chief economist as this crisis, driven by reckless speculation, developed. Tragically, like the rest of the Bush administration, he was asleep at the wheel during this period and did nothing to move our financial system onto safer grounds," Sanders said.

“As the middle class of this country continues to shrink, we need a chairman of the Federal Reserve who is more concerned about expanding the productive economy – increasing decent-paying jobs for all Americans – than continuing to fan the flames of Wall Street greed and outrageous compensation packages.”

AFL-CIO president John Sweeney offered his backing for Bernanke, but said there needs to be more accountability at the Fed and more focus on jobs.

"Ben Bernanke has served ably as Chairman of the Federal Reserve at a time of great challenges. He has been forced to account for the serious failings of his predecessor," Sweeney said in a statement.

"The Federal Reserve must be made into a more publicly accountable body that makes job growth a central focus in the years ahead, particularly given signs that the economic recovery will be weak. We believe it's important that Chairman Bernanke's views on the governance and role of the Federal Reserve system also be a focus of his confirmation hearings. Finally, we must determine whether the Federal Reserve will oppose the creation of a Consumer Financial Protection Agency that will rein in Wall Street's excesses and look out for America's working families.

"We are eager to engage the Administration, Chairman Bernanke and the Congress in the weeks ahead about reform of unregulated financial markets that destroyed millions of jobs and trillions of dollars in investment capital."

The president's full remarks, and those of Bernanke, are below:

The White House, issuing its new budget deficit projection this morning, said the numbers look better in the short term but worse in the long run.

Budget Director Peter Orszag said that the deficit for the fiscal year ending Sept. 30 is now projected to be $1.58 trillion -- or 11.2 percent of gross domestic product -- down $262 billion from a previously projected $1.84 trillion or 12.9 percent of GDP. That's still an all-time record by far.

And the red ink looks worse in the next decade because of updated economic data that show that "we inherited a deeper recession than projected in February," Orszag wrote in his message. (Read it here.)  

The White House is projecting that the deficit for 2010-2019 will be $2 trillion higher than it forecast in February, now an eye-popping $9.05 trillion.

"During an economic downturn, one wants to allow the deficit to increase, so deficit reduction should be focused on the out-years -- after the economy has recovered," Orszag writes. "That said, the out-year deficits hover in the range of 4 percent of GDP, which is higher than desirable. Getting the out-year deficit under control is a top priority of the Administration."

Republicans are accusing the administration of fudging the numbers to make the deficit appear smaller for the current year, largely by changing assumptions about the costs of the financial bailout.

"Let’s be clear, this is spin and nothing more," economic adviser Douglas Holtz-Eakin wrote in a memo to House GOP Leader John Boehner. "The lower estimate is strictly the result of the Administration massaging their budget assumptions, not reality. The reality is, putting these gimmicks aside, that the FY 2009 deficit is larger. And, even the Obama Administration will have to admit that the deficit for every year after 2009 is even worse than they admitted earlier this year. (Read his memo here.)

But the nonpartisan Congressional Budget Office put out is own figures this morning, and they closely track the White House's in the short term and are actually lower in the long term.

The CBO estimated that the deficit will be $1.59 trillion in fiscal 2009 and $1.38 trillion in fiscal 2010 as the economy recovers. It also lowered its projection of the 10-year budget deficit to $7.14 trillion.

One reason for the CBO's lower 10-year number: It assumes that the tax cuts put into place by the Bush administration will expire as scheduled by 2011, but Obama's projection keeps the tax cuts for families earning less than $250,000 a year.

Republicans are also warning that Obama's agenda will mean even higher deficits, threatening to bankrupt the country.

"The mushrooming federal debt poses a grave danger to America’s prosperity, threatening to plunge our economy and future generations into the abyss of stagnant growth and national decline. But given the reckless way the administration is spending your money, you’d never know that the debt is a cause for concern. Staggering sums of money have been tossed around so casually that the very notion of dishing out 'trillions' of dollars is no longer a shock to many in Washington," Representative Eric Cantor, the No. 2 House Republican, writes in an op-ed for Politico.

American can't afford Obama's health care plan, estimated to cost $1 trillion over the next 10 years, Cantor argues.

"In this economy, as families review their own budgets and adjust accordingly, they expect their government to act in a manner that reflects the challenging times we are in. Much of the public frustration with Washington has been evident in town halls across the country, and many Americans believe the administration’s top priority should be cutting the federal deficit in half by the end of his first term," Cantor writes.

"Instead, the administration seeks to force a massive new government health care program that most people don’t want and certainly cannot afford. And they will do so even if it means imposing new taxes on the middle class and small business job creators. Now is not the time to double down on a deficit that is $2 trillion more than the administration projected, but instead to moderate spending, and move forward responsibly."

Boehner added his criticism in a statement:

“Today’s reports confirm what the White House has been trying to hide: the Democrats’ out-of-control spending binge is burying our children and grandchildren under a mountain of unsustainable debt. Instead of putting the brakes on Washington’s spending habits as they promised they’d do, Democrats have stepped on the accelerator and spent taxpayer dollars with reckless abandon all year, refusing to make tough choices and putting all the sacrifice on future generations. That’s not leadership; it’s negligence.

“The costly government-run health care plan put forth by President Obama and Speaker Pelosi is just the latest in a long line of expensive Democratic experiments that will add to the deficit, raise taxes on families and small businesses, and cost more American jobs. It’s time for the Administration and congressional Democrats to face the consequences of this dangerous fiscal agenda and change course."

UPDATE: Democratic House Speaker Nancy Pelosi, however, blamed the Bush administration for running up the deficits and following policies that led to the need for costly rescue measures, including the $787 billion economic stimulus package that passed without a single Republican vote in the House.

"Today's deficit projections are a legacy of Bush Administration fiscal policies that turned our surpluses into deficits and led the way toward an economic and financial crisis that has required historic short-term intervention. If pay-as-you-go principles had been in place for the last 8 years, this deficit would be $5 trillion smaller over the next decade," she said in a statement.

"We are working with President Obama to restore fiscal responsibility and to ensure that statutory pay-go, already passed by the House, is signed into law. Under President Obama's leadership, we have ended the Bush-era practice of hiding the costs of the wars in Iraq and Afghanistan -- gimmicks and accounting tricks that have no place in our budget process. And working with the President, Congress has laid out a budget blueprint that reduces our deficit, lays a new foundation for job creation and economic growth, and invests in more broadly shared prosperity for all Americans. "But we cannot reduce the deficit in the long-term without getting health care costs under control. Nor can health care reform add to the challenge. That is why our health insurance reform is fully paid for and will not increase the deficit.

"These deficit projections send a clear message: fiscal discipline must be the order of the day as we come out of this recession. Our economic recovery efforts are starting to pay dividends for America's families. Today's announcement that consumer confidence and home prices are on the rise represent new signs that our economy is moving in the right direction. And now, we must remain on-track to tackle our fiscal challenges, advance policies to promote job growth, reinforce the foundation of our prosperity, and return the United States to the days of financial stability."

The economy appears to be finally on the road to recovery, and on the hustings President Obama has been celebrating that turnaround and crediting the $787 billion economic stimulus plan he championed.

But a new poll out today suggests that most Americans disagree.

Six months after Obama signed the package of tax cuts and spending, a USA TODAY/Gallup Poll found that 57 percent of respondents say the stimulus package is having no impact on the economy or making it worse --33 percent said no effect and 24 percent worse. Just 41 percent said the stimulus is making the economy better.

Over the long term, 38 percent of respondents said the stimulus will make things better and 38 percent said it would make it worse.

For respondents personally, only 18 percent said the stimulus has improved their situation while 13 percent said worse and 68 percent said no impact. And more respondents -- 34 percent -- said they expect the stimulus will make things worse for them personally over the long term than better -- 29 percent.

House Republicans -- not a single one of whom voted for the stimulus package -- jumped on the poll results to continue their attack.

“By any objective standard, the Democrats’ trillion-dollar ‘stimulus’ isn’t working," House GOP leader John Boehner said in a statement today. "The administration promised the ‘stimulus’ would provide a ‘jolt’ to our economy and create jobs immediately, but 2.8 million more Americans have lost their jobs since the ‘stimulus’ became law.  The American people are asking, ‘where are the jobs?’ 

"The administration’s insistence on spending, taxing, and borrowing more than ever is not the answer they’re seeking.  Instead, it is burying our children and grandchildren under an unmanageable mountain of debt.  Families and small businesses expect and deserve far better.  Rather than pursuing more job-killing policies like a government takeover of health care and a national energy tax, Democrats should work with Republicans on better solutions that create jobs, curb spending, and control the debt.”

President Obama, armed with welcome -- and somewhat surprising -- evidence of an economic recovery to brandish against his critics, declared this afternoon that "the worst may be behind us."

"Today we're pointed in the right direction," he said in the White House's Rose Garden, asserting that job losses are at half the rate when he took office in the worst recession since the Great Depression.

He also noted that a week ago, the gross domestic product dropped just 1 percent in the second quarter.

The president repeated his defense/explanation of the $787 billion economic stimulus package, saying that it has helped rescue our economy from "catastrophe" and started to lay the groundwork for sustained growth.

But Obama said he won't be satisfied until many more Americans can find good jobs.

"It won't be easy," he said, since change comes with difficulty in Washington. "We have a steep mountain to climb and we started in a very deep valley," he added. (His full remarks are below.)

Obama, Vice President Joe Biden, and Cabinet secretaries had been talking up the economic stimulus package this week -- in part to inoculate the White House from unemployment numbers out this morning that many economists predicted would top 10 percent nationally.

Instead, the jobless rate declined slightly to 9.4 percent in July from the 26-year high of 9.5 percent in June -- the first decrease since April 2008. The Labor Department reported that employers cut 247,000 jobs, the fewest in a year.

Still, there were 14.5 million Americans out of work in July, and if those who have given up looking for a job or who have been forced to take part-time work are counted, the rate was 16.3 percent in July.

As the unemployment rate steadily and stubbornly rose month after month, Obama's job approval ratings and Americans' confidence in his handling of the economy dropped. The opposite can be expected to happen if the jobless numbers keep dropping.

Representative George Miller of California and Senator Edward M. Kennedy of Massachusetts, the Democrats who lead the House and Senate Labor Committees, respectively, issued a joint statement:

“When President Obama inherited this economic crisis seven months ago, our nation was shedding 700,000 jobs a month. Today's decline in unemployment – the lowest number of jobs we’ve lost in the last year – is very good news for working families. It shows that President Obama's economic recovery program is working – saving jobs in classrooms, police stations, and firehouses and creating new jobs for Americans in construction and renewable energy fields. While our nation’s road to recovery will take time and patience, there is no doubt that we are moving in the right direction.

“Even in the midst of this promising news, it’s clear we still have a long way to go. More than 5 million Americans have been looking for work for more than six months, without success. We must do more to help these working families keep food on their tables and hope in their hearts. An extension of unemployment benefits should be at the top of Congress’s agenda when we return in the fall.”

AFL-CIO president John Sweeney also attributed some of the unemploymen turnaround to the stimulus package.

"The dip in the unemployment rate in July is a welcome sign that President Obama’s economic recovery package is starting to blunt the impact of the most severe recession in a generation. By refusing to listen to the naysayers, the President and Congress have helped to avert a total financial meltdown -- despite much continuing pain. We still have a long way to go until our economy is growing and creating good jobs at a healthy rate -- and we will need decisive and timely action from our government in the meantime," Sweeney said in a statement.

"It is not good news that we lost 247,000 jobs in July, bringing total job loss since the recession began to 6.7 million. The growth of long-term unemployment by another 584,000 is especially disturbing and cries out for immediate, additional attention. There are now more than 5.7 job seekers for every available job -- up from 1.7 at the start of the recession. The July job figures would have been much worse without the stimulus, which has helped to slow the pace of job loss to less than half of what it was just six months ago. From May to July, job losses averaged 331,000 per month, compared with losses averaging 645,000 per month from November to April."

UPDATE: But Republicans didn't see much encouragement in the jobs report, and continued their criticism of Obama and Democrats for their economic policies.

"While President Obama was taking a victory lap to celebrate the economy's performance, more Americans lost their jobs and the budget deficit soared to a record $1.3 trillion in July," Republican National Committee chairman Michael Steele said in a statement. "In the month of July alone 247,000 Americans lost their jobs, which means more than 2.8 million Americans have lost their jobs since the president took office. The president said his stimulus bill would keep unemployment from rising higher than 8 percent. It hasn't. Now he expects Americans to believe his trillion-dollar health care experiment will improve their health care? It won't. America simply can't afford more of the president's costly experiments."

Representative John Boehner, the top-ranking House Republican, chimed in: "Today's unemployment report is yet another reminder that more spending, taxing, and borrowing does not mean more jobs for the American people. Instead of rewriting history on their 'stimulus' promises, Washington Democrats should abandon their job-killing agenda," said Boehner in a release. "Rather than pushing an increasingly unpopular government takeover of health care that will increase costs, drive up the deficit, raise taxes, and destroy jobs, Democratic leaders would be well-served to work with Republicans on real reforms that expand Americans' access to affordable health care and help small businesses create more jobs."

President Obama this morning signed into law a bill replenishing the "cash for clunkers" program with another $2 billion.

The Senate passed the bill Thursday night to keep the program going, after an unexpected flood of car buyers used up the first $1 billion in rebates, as much as $4,500 for trading in gas guzzlers for more fuel-efficient vehicles.

"Now, more American consumers will have the chance to purchase newer, more fuel efficient cars and the American economy will continue to get a much-needed boost," Obama said in a statement after the Senate vote. " ‘Cash for Clunkers’ has been a proven success: the initial transactions are generating a more than 50% increase in fuel economy; they are generating $700 to $1000 in annual savings for consumers in reduced gas costs alone; and they are getting the oldest, dirtiest and most air polluting trucks and SUVs off the road for good. Businesses across the country – from small auto dealerships and suppliers to large auto manufacturers – are putting people back to work as a result of this program. I want to thank Leader Reid and the members of the Senate who moved quickly to extend a program that benefits our recovery and our auto industry while reducing our economy’s dependence on oil.”

As President Obama hits the 200-day mark, new polls show a further slide in his ratings.

The CNN/Opinion Research Corp. survey results released this morning gives him an overall job approval rating of 56 percent, with 40 percent disapproving. That's down from 61 percent approval in late June, and 76 percent in early February.

Still, a majority, 51 percent, said that Obama's first six months have been a success, and only 37 percent said a failure, with 11 percent saying it's too soon to tell.

But two-thirds of respondents say Obama has tried to handle too many issues, though he repeatedly says it wasn't his choice, but forced upon him by inheriting two wars and the worst economic crisis since the Great Depression.

On the economy, while 44 percent said they believed Obama's policies had made things better, 51 percent said they had not, and 79 percent said economic conditions were somewhat poor or very poor.

Asked how they personally felt about Obama as president, 15 percent of respondents replied "thrilled" -- down from 28 percent just before his inauguration; 41 percent said "happy," about the same.

But 31 percent said "unhappy" or "depressed" -- nearly double the 16 percent giving those descriptions before he took office.

The poll, conducted last Friday through Monday, has a margin of error of plus or minus 3 percentage points.

A Quinnipiac University poll of registered voters released today gives Obama even lower marks.

In that survey, Obama has a 50 percent to 42 percent job approval rating from voters, down from 57 percent to 33 percent a month ago, and the lowest since Inauguration Day.

The poll also found that voters disapprove 49 percent to 45 percent of the way the president is handling the economy, and disapprove 52 percent to 39 percent of how he is handling healthcare, but approve 52 percent to 38 percent of the way he is handling foreign policy.

The Quinnipiac poll, conducted July 27-Aug. 3 among registered voters, has a margin of error of plus or minus 2 percentage points.

The Obama team is fanning out across the country today with a shared message -- the economic stimulus plan is working.

Really.

President Obama returned to Elkhart County, Ind., where he spoke at a former recreational vehicle plant. The RV industry has been crushed during the recession, so Obama will be bringing some money with him.

He announced that 48 projects in 20 states for advanced battery technology for hybrid and electric-drive vehicles will receive $2.4 billion in grants from the recovery bill, creating tens of thousands of jobs. The money includes a $39 million grant for Navistar International Corp. in Elkhart to manufacture electric trucks. The White House release on the grants, which it bills as the single largest investment in advanced battery technology, is below.

Obama said the area has been hit with a "perfect storm" of economic troubles -- the decline of manufacturing, the problems of the domestic auto industry, and the recession -- that caused a 10-percentage-point increase in the unemployment rate, the second highest rise in the nation.

Such woes test a community and families -- and the future of the nation depends on reviving places such as Elkhart County, the president said.

But before rebuilding the economy and moving forward, the nation has to recover from the recession -- and the stimulus package is playing a key role in doing that, he said.

He cited specific projects in the area that have been financed by the stimulus bill, then he promoted the spending for innovations to create new jobs. Indiana will be the second-biggest recipient of the clean-energy vehicle grants, he said.

"Made in America," Obama repeated, to applause. (His full remarks are below.)

The recipients include A123Systems Inc., a Watertown-based lithium-ion battery maker getting $249 million for two plants in Michigan. Also, H&T Waterbury Inc. in Waterbury, Conn.; SBE Inc. in Barre, Vt.; and the National Fire Protection Association in Quincy, Mass. To read the full list, click here.

At the same time, Vice President Joe Biden is in Detroit, speaking at an alternative energy company. Four Cabinet secretaries are also talking up the grants coming from the $787 billion stimulus package.

Biden previewed the message after meeting with the administration's economic team Tuesday. "I can tell you today, without reservation, the Recovery Act is working," he told reporters.

He ticked off a series of statistics: the economy shrank by a smaller-than-expected 1 percent in the second quarter, spending by state and local governments increased 2.4 percent from April to June, household income grew at a annual rate of almost 5 percent in the same period, and home and car sales are up.

But the big number that the administration has to get over is the jobless rate, which typically lags a recovery.

The national unemployment rate has risen every month since Obama signed the stimulus bill in February. It hit a 26-year high of 9.5 percent in June, and the July number, which will be announced Friday, is expected to breach the 10 percent barrier.

Vice President Joe Biden, put in charge of keeping waste and fraud out of the $787 billion economic stimulus package, declared today "without reservation" that the recovery plan is working.

He said in its first six months, the controversial plan has rescued "tens of thousands of people who have fallen into a black hole" of unemployment.

Pointing to a series of better-than-expected measures, Biden told reporters, "Six months ago we gathered here in the White House, worrying about the U.S. economy and whether or not it was falling off a cliff. And today, analysts are trying to determine if -- if an official recovery is already underway."

"Now, don't get me wrong -- we still have a long way to go," Biden said after he and President Obama huddled with the economic team. " 'Less bad' is not the same as 'good.' We know that growth in GDP is necessary but not sufficient. It's not a sufficient marker of recovery. For one thing, it's not going to occur until there are jobs. My grandpop used to have the expression, he said, when the guy up the line is out of work, it's an economic slowdown; when you're brother-in-law is out of work, it's a recession; when you're out of work, it's a depression. Well, it's still a serious problem for millions of unemployed Americans. Too many people are out of work. Too many families are in pain." His full remarks are below.

UPDATE: House Republicans, who unanimously opposed the stimulus package, were not impressed by Biden's declaration.

In an email, Antonia Ferrier, a spokeswoman for House GOP leader John Boehner, pointed out that Biden admitted a month ago that the administration had "misread" the depth of the recession.

She also noted that many economists aren't as optimistic about the latest numbers and that national unemployment is expected to top 10 percent when the July figures come out later this week.

"Now, if you think this is an astonishing statement, well, so do we – after all, we have nationwide unemployment rate of 9.5 percent - and rising - with numerous states already well over 10 percent," Ferrier said.

"But the fact remains that the Administration promised the stimulus would provide IMMEDIATE relief, that it would provide the economy with a JOLT, and that unemployment would NOT climb above 8 PERCENT. None have proven to be true, prompting the Vice President to say just over a month ago that they “misread the economy,” which then morphed into the stimulus was supposed to take a while to work, and NOW it’s working. But the standard to measure its success is the initial benchmarks the Administration used to sell their plan."

With House members back in their districts, President Obama's grassroots group is airing radio ads pushing key representatives on healthcare and thanking others on the economic recovery package.

Organizing for America announced that the health ad, entitled "Standing Up," will run in 19 districts. Listen to it here.

The economic ad, entitled "To the Rescue," will run in four districts, the group said. Hear it here.

"These members have been part of one of the most ambitious, historic and successful opening months of a Congressional session in our nation's history," said OFA Director Mitch Stewart. "From expanding health insurance to millions of vulnerable children, to passing a recovery act that rescued our economy from certain disaster, to passing a budget that halves our deficit over the next decade while making critical investments in health care, energy and education, these members have all helped bring about the change President Obama promised to bring to Washington. They are now standing up to the special interests, the lobbyists and the naysayers and working for big solutions to our nation's toughest problems - including fixing a broken health insurance system that costs too much, leaves too many people lacking coverage and puts insurance industry profits ahead of patient care. Thanks to the support of these members and others like them - we will reform the health insurance system in this country and make other critical policy changes to get our economy back on track."

The group is up against conservative organizations that have been finding activists to attend town halls on healthcare that members of Congress have been having with their constituents.

Following up on a retreat with Cabinet officials and others over the weekend at the six-month mark of his new administration, President Obama plans to huddle Tuesday with all 60 Senate Democrats.

White House spokesman Robert Gibbs said the unusual gathering is meant to take stock of where legislative priorities stand -- and two are likely to be at the forefront: healthcare overhaul, since a full Senate vote has been put off until after the August recess, and the "cash for clunkers" bill.

"I don't doubt that healthcare will be discussed," Gibbs said at his daily briefing. "I believe the economy will also be heavily discussed; the numbers that we've been talking about, numbers that we'll see throughout the week, unemployment, manufacturing reports -- just in general where the economy is. I think we'll probably -- they'll go through and discuss energy legislation.

Gibbs also said that a topic will be the House-passed bill to pump $2 billion more into the unexpectedly popular program giving car buyers stipends for trading in gas guzzlers for fuel-efficient vehicles. "Without some help from the Senate, in terms of moving the $2 billion from the Recovery and Reinvestment plan's energy efficiency programs into this account, [it] will likely mean that the program will have to be stopped by the end of the week.

Asked why Republicans weren't invited, Gibbs replied, "I would look at this as the president speaking to the Democratic caucus. They have a regularly scheduled caucus lunch that happens every Tuesday. It's just we're having that lunch here at the White House rather than up on Capitol Hill. So I think that explains talking to the -- to Senate Democrats."

If two top advisers opened the door to raising taxes on the middle class, the White House is seeking today to slam it shut again.

Pressed repeatedly on the issue, presidential spokesman Robert Gibbs said repeatedly that Obama stands behind his iron-clad campaign pledge that any tax hikes would only hit individuals making more than $200,000 a year and families earning more than $250,000.

"The president has been clear on his commitment on this," Gibbs told reporters.

"I want to just state again clearly here that the President has made a very clear commitment to not raise taxes on middle-class families, period," Gibbs tried again.

"Let me be precise: The president's clear commitment is not to raise taxes on those making less than $250,000 a year."

"The door's not open even a millimeter on raising taxes?" a reporter asked.

"I hope you'll take seriously what I said," Gibbs replied.

He also noted the economic stimulus package included tax cuts for 95 percent of earners.

The questions arose because on TV talk shows Sunday, both Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers refused to rule out possible tax increases.

Geithner said that tax hikes might be needed to reduce the record federal deficit, while Summers said there needed to be funding for healthcare overhaul.

"I don't think we're going to get the deficit under under better control until we get the economy moving again. In order to lay that new foundation, the president strongly believes that health care reform is important," Gibbs said.

"And the president was clear during the campaign about his commitment on not raising taxes on middle-class families. And I don't think any economist would believe that in the environment that we're in raising taxes on middle-class families would make any sense. And the president agrees."

Gibbs noted that the recession is driving down tax revenues, so "the most important thing we can do is get the economy growing again."

UPDATE: Before, or despite, the comments from Gibbs, Americans for Tax Reform said the appearances by Geithner and Summers are the "latest of a string of statements by Obama’s spokesmen and appointees gradually stepping back from the 'firm pledge' made during the campaign."

“Obama should fire Geithner and Summers,” Grover Norquist, the group's president, said in a statement. “Two appointees of President Obama went on national television and implied the president lied his way into office and that he is open to raising taxes.”

“To have the president’s own appointees accuse him of lying his way into office is a betrayal beyond words,” Norquist added. “If, however, Obama has been silent in reaction to these two statements, he does intend to raise taxes, and he should resign because he lied his way into office by making a promise he had no intention of keeping.”

President Obama said new, better-than-expected gross domestic product numbers show that the country is headed in the right direction, and that "the recession we faced when I took office was even deeper than anyone thought at the time."

The president also said the massive, $700 billion economic stimulus package "helped pull the nation back from the brink."

The economy "has done measurably better that we had thought -- better than expected. And as many economists will tell you, that part of the progress is directly attributable to the Recovery Act," Obama said this afternoon. "This and other difficult but important steps that we've taken over the last six months have helped us put the brakes on the recession."

But the president added that the good economic news is cold comfort for those withouth jobs and families struggling to make ends meet.

"When we receive our monthly jobs report next week, it's likely to show that we're still continuing to lose far too many jobs. As far as I'm concerned, we won't have a recovery as long as we keep losing jobs," Obama said. "And I will not rest until every American who wants a job can find one."

Nevertheless, "history does show that you need to have economic growth before you have job growth," Obama said. "And today's GDP is an important sign that the economy is headed in the right direction and that business investment, which had been plummeting in the last several months, is showing signs of stabilizing. This means that eventually, businesses will start growing and they'll start hiring again. And that's when it will truly feel like a recovery to the American people."

The Commerce Department reported that the economy shrank by 1 percent in the second quarter of the year, giving hope that the longest recession since World War II is easing.

"Obviously that's the right direction," Christina Romer, one of the president's top economic advisers, said on MSNBC. "We've got a long way to go."

The revised number in the first quarter was down 6.4 percent, the biggest decline in nearly three decades -- showing that the recession was even worse than believed at the time and proving that the $787 billion stimulus plan and other government spending was necessary, said Romer, chairwoman of the White House Council of Economic Advisers.

"We absolutely had to rescue this economy," she said.

For the economy to truly rebound, she said, there needs to be 2 percent to 3 percent real growth.

Obama and Romer also tried to reassure Americans that one initiative won't be a victim of its own success.

The "cash for clunkers" program has been so popular that consumers have already emptied the $1 billion fund.

"Not more than a few weeks ago, there were skeptics who weren't sure that this "Cash for Clunkers" program would work," Obama said. "But I'm happy to report that it has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers."

"And I'm encouraged that Republicans and Democrats in the House are working to pass legislation today that would use some Recovery Act funding to keep this program going -- funding that we would work to replace down the road," the president said. "Thanks to quick bipartisan responses, we're doing everything possible to continue this program and to continue helping consumers and the auto industry contribute to our recovery."

"If you wanted to buy a car this weekend, go do it," Romer told Reuters Television. "The program is still there. It has not been suspended, and I can tell you there is a real flurry of activity working with the agencies, the Congress, to ensure we can continue this and get the funds there."

The Associated Press is reporting that Democrats in both the House and Senate are exploring votes as early as today to add $2 billion into the rebate program.

Representative Sander Levin of Michigan revealed the bill after he and other lawmakers were assured by Transportation Secretary Ray LaHood that the program would continue at least through today while the Obama administration looked for more money, the AP says.

With Republicans citing the continuing economic distress to bash the economic stimulus plan pushed through by President Obama and his Democratic allies in Congress, the Democratic National Committee is hitting back with a media campaign blaming Republicans for creating the mess to begin with.

In a new TV ad announced today, the DNC goes after the top four congressional Republicans -- Senators Mitch McConnell of Kentucky and Jon Kyl of Arizona, and Representatives John Boehner of Ohio and Eric Cantor of Virginia -- by saying they "supported the Bush policies that sank our economy into recession. They broke it - now they refuse to fix it."

"Tell Republicans to stop playing politics with our economy," the announcer urges viewers.

Besides the media campaign, the DNC is organizing news conferences or conference calls with reporters in their home states this week with local elected officials and others to testify to the impact of the $787 billion stimulus plan. Not a single House Republican voted for it, and only a handful of Senate Republicans did.

"Republicans supported the policies that sank our economy into the worst recession in nearly a century and have refused to work with President Obama to turn things around," DNC Communications Director Brad Woodhouse said in a statement. "They followed Rush Limbaugh and played politics with the Recovery Act - and now that it is showing signs of progress - they are distorting the truth about its success so no one will notice that they were the ones who got it wrong before and who are getting it wrong now. In each of these states there are real projects, providing and saving real jobs and laying a foundation for long-term economic growth. The Republican leadership may not want to admit the truth because it will expose their own mistakes and hypocrisy, but we're not going to hesitate setting the record straight."

UPDATE: Obama, himself, addressed what he called "a lot of misinformation out there" about the stimulus bill, which he said has helped stem job losses though "the tough times aren't over."

"Let me just lay out the facts," he said in a town hall in Raleigh, N.C., today, saying he had passed protestors on the way to the event: "Roughly a quarter of the Recovery Act’s funding has been committed, over 30,000 projects have been approved, and thousands have been posted online."

One-third of the money is going to tax cuts for families and small businesses, another third is for emergency relief including unemployment benefits, and the final third is for investments such as infrastructure projects, he said.

"Now, I know that some critics in Washington ... they are saying we’ve been slow to get these projects started. They are saying we should have broken ground on all our highway projects on the first day. That’s impossible, especially because I wanted to be sure we did our homework and invested tax dollars only in those projects that actually created jobs and jump-started our economy. We knew it would take a few months for these projects to get online," he said.

"So it will take time to achieve a complete recovery, we're not going to rest until anyone who’s looking for work can find a job. But there should be little debate that the steps we took, taken together, have helped stop our economic freefall."

Vice President Joe Biden and Attorney General Eric Holder announced today that the Justice Department will award $1 billion in grants to help local law enforcement agencies hire about 4,700 officers.

Boston is the biggest beneficiary in Massachusetts, with $11.8 million, enough for 50 officers. Other recipients include New Bedford, 13 officers; Lowell, 12; and Fall River, 10 officers.

UPDATE: Boston officials welcomed the money, which they said made the city one of only 24 in the nation to receive its full request and said would allow the police department to expand community-oriented policing.

“Today is a great day for public safety in Boston,” Mayor Thomas M. Menino said in a statement. “I am grateful for all of the work done by President Nee of the Boston Police Patrolman's Association and our partners in Washington for helping us secure this competitive grant money. This award is a terrific example of Boston's strong commitment to public safety. This funding will keep officers on the streets of our neighborhoods and continue our progress in community policing. I am proud of the work done by the Boston Police Department in reducing crime across our city, and this funding will allow us to continue these effective strategies.”

“We are thrilled to receive this important funding from the Department of Justice,” Boston Police Commissioner Ed Davis added in a statement. “It is precisely what we need during this difficult fiscal time to stave off workplace reduction. This initiative will assist us in maintaining the level of public safety service that Boston residents and visitors have become accustomed to."

In all, 13 Massachusetts agencies will get $29 million for 131 officers, while 212 agencies asked for $203 million for 931 officers, according to the Justice Department. To see the Massachusetts summary, click here.

But New York, Houston, Seattle, and Pittsburgh are among those not receiving any money because the Justice Department decided other cities were more needy. To see the full list of grants by state, click here.

The Justice Department received more than 7,200 applications for more than 39,000 officer positions, representing a total of $8.3 billion in funding, the White House said.

The money will come from the $787 billion economic stimulus package and will go to 1,046 law enforcement agencies from all 50 states, providing the salaries and benefits for three years.

Agencies will be required to foot the bill for the officers for a fourth year -- a mandate that could cause problems for cash-strapped cities and towns. It was also the biggest criticism of a similar program during the 1990s under the Clinton administration.

“A big part of the Recovery Act is about building communities – making them as strong as they can be, allowing every American family to live a better life than the one they are leading now,” Biden said in Philadelphia. “And we can’t achieve the goal of stronger communities without supporting those who keep our streets safe.”

“These Recovery Act funds will pump much needed resources into communities through a program with a proven track record,” said Holder. “The tremendous demand for these grants is indicative of both the tough times our states, cities and tribes are facing, and the unyielding commitment by law enforcement to making our communities safer.”

The release from Massachusetts Senators John F. Kerry and Edward M. Kennedy is below:

President Obama's chief economic adviser, Lawrence Summers, is the latest top administration official to defend its efforts to revive the economy, even as unemployment inches toward double digits.

"Though only a half a year ago, the distance we have traveled these past six months is remarkable," Summers said at the Peterson Institute, according to advance excerpts released by the White House. "The economy was in free-fall at the start of the year with no apparent limit on how much worse things could get. Fear was widespread and confidence was scarce.

"We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss… Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real 6 months ago."

According to federal data released this morning, the jobless rate has already topped 10 percent in 15 states and the District of Columbia, and surpassed 15 percent in Michigan, the first time any state reached that mark since 1984.

Summers argued that rising unemployment does not mean that the $787 billion stimulus package championed by Obama is not working, since the jobless rate lags other indicators of recovery.

Summers, the former Harvard president and treasury secretary, also reiterated Obama's assertions that his policies are not only lifting the country out of recession, but building the foundation for long-term growth.

"To address the deep and severe crisis he inherited, President Obama started from two main premises," he plans to say. "First, the most immediate priority was to rescue the economy by restoring confidence and breaking the vicious cycle of economic contraction and financial failure. Second, the recovery from this crisis would be built not on the flimsy foundation of asset bubbles but on the firm foundation of productive investment and long-term growth.

"The President was clear from the beginning that these two tasks needed to be dovetailed—that confidence in our ability to rescue the economy depended on a sense of our commitment to reform and a vision for rebuilding."

"The rebuilt American economy must be more export-oriented and less consumption-oriented, more environmentally oriented and less fossil-energy-oriented, more bio- and software-engineering-oriented and less financial-engineering-oriented, more middle-class-oriented and less oriented to income growth that disproportionately favors a very small share of the population."

His full remarks are below:

The war of words over the economic stimulus is getting louder today in Virginia.

Vice President Joe Biden is in Richmond, the home district of Representative Eric Cantor, the No. 2 Republican in the House and one of President Obama's harshest, most persistent critics.

Biden plans to blast Cantor, according to the Washington Post. "To those who say that our economic decisions 'have not produced jobs, have not produced prosperity, and simply have not worked, I say, 'Take a look around,' " Biden will say, according to prepared remarks obtained by Post. "I ask those critics, 'Would they not help the states prevent lay off thousands of teachers, firefighters, cops? Would they not give a tax cut to 95 percent of the American people? Would they sit back and do nothing as our economy collapsed?' "

Cantor's office, for its part, is on the case of Tim Kaine, Virginia's governor and Obama's hand-picked chairman of the Democratic National Committee.

Kaine sent out a statement today saying that Obama's $787 billion stimulus package -- which not a single House Republican supported -- is sparking a recovery and creating jobs.

"For Governor Kaine's DNC to flatly state that there is an economic recovery misses the current and increasing double-digit unemployment in Richmond and the 8.1% unemployment in Central Virginia. To declare an 'economic recovery' when so many Virginian families are being negatively impacted by this Administrations economic policy is a truly shocking statement that should be retracted," Cantor spokesman Brad Dayspring said in a statement.

"A stimulus bill should have an immediate economic impact and create real, long term jobs, and this stimulus has not created jobs or fixed our economy."

President Obama landed this afternoon in Michigan -- the state with the nation's highest unemployment rate at 14 percent -- to reassure Americans that better days are ahead, and to talk about the importance of education to grow the economy.

He spoke at Macomb Community College -- a common stop for politicians ever since Ronald Reagan embraced white, blue-collar Democrats to create "Reagan Democrats" -- and declared that "the hard truth is that some of the jobs that have been lost in the auto industry and elsewhere won’t be coming back. They are casualties of a changing economy.

"And that only underscores the importance of generating new businesses and industries to replace the ones we’ve lost, and of preparing our workers to fill the jobs they create. For even before this recession hit, we were faced with an economy that was simply not creating or sustaining enough new, well-paying jobs," he said, according to prepared remarks released by the White House.

Obama announced a new initiative to strengthen community colleges in their role of training workers for new jobs.

"Time and again, when we have placed our bet for the future on education, we have prospered as a result – by tapping the incredible innovative and generative potential of a skilled American workforce.

"That is why, at the start of my administration I set a goal for America: by 2020, this nation will once again have the highest proportion of college graduates in the world…Today, I am announcing the most significant down payment yet on reaching this goal in the next ten years. It’s called the American Graduation Initiative. It will reform and strengthen community colleges from coast to coast so that they get the resources students and schools need – and the results workers and businesses demand. Through this plan, we seek to help an additional five million Americans earn degrees and certificates in the next decade."

(The full prepared remarks and White House release are below.)

UPDATE: Senator Edward M. Kennedy, chairman of the Senate education committee, praised Obama's community college push.

“I commend President Obama for this major initiative to enable many more Americans to obtain the education and training they need to succeed in our modern economy," Kennedy said in a statement. "Community colleges in Massachusetts and across the country are putting millions of students on the path to a college degree. They are also offering millions of other Americans the opportunity to develop the skills and knowledge they need for family-sustaining jobs. Congress should include this important initiative in the higher education legislation we pass this year.”

Earlier today, Obama told reporters that he doesn't have a "crystal ball" on the jobs picture, but does expect the unemployment rate to rise before topping out. Many economists expect the national rate, now 9.5 percent, will reach double digits.

"Even after you start moving into a recovery, positive growth, hiring typically lags for some time after that. That's been the historic norm," he added. "Now, this has been a more severe recession than we've seen since the Great Depression, so how employment numbers are going to respond is not yet clear. My expectation is, is that we will probably continue to see unemployment tick up for several months. And the challenge for this administration is to make sure that even as we are stabilizing the financial system, we understand that the most important thing in the economy is, are people able to find good jobs that pay good wages."

(His full comments on the economy are below.)

President Obama, seeking to regain the upper hand on the economy, issued a new report this morning on the "jobs of tomorrow" -- even as the jobs of today keep disappearing.

His Council of Economic Advisers released the report, titled "Preparing the Workers of Today for the Jobs of Tomorrow," that is an overview of how the US labor market is expected to develop over the next few years. The report (read it here) discusses the skills and training that will likely be needed for the growing occupation categories, and the education and training system needed to prepare people for those jobs.

As the unemployment rate heads north of 10 percent nationally, Obama is defending the $787 billion economic stimulus plan he championed, asking Americans for patience. He made that case in his weekly radio and Internet address on Saturday and in an op-ed piece in the Washington Post on Sunday, and is expected to make it again during a public event in Warren, Mich., on Tuesday.

In an unusual move, the White House today sent out an official release citing news reports challenging the facts used by Republican critics of the stimulus.

Such counterattacks are typically left to Democratic Party groups or friendly advocacy organizations. (The full release is below.)

UPDATE: Obama also huddled this afternoon with labor leaders, some of his most loyal and important allies.

"Today's meeting with President Obama and leaders in the union movement was a critical opportunity to share and discuss issues impacting working people, including jobs, health care, and the Employee Free Choice Act," AFL-CIO President John Sweeney said in a statement afterwards. "President Obama has always been a friend to the union movement, and the meeting emphasized his continued support on issues important to working people. We look forward to continuing to work with the president to build an economy that works for everyone.

Facing growing public unease about his handling of the economy, President Obama takes his weekly Internet and radio address to defend the $787 billion stimulus package he championed.

It is doing exactly what it was designed to -- stop the bleeding by slowing job losses, start reviving the economy, deliver tax relief to the middle class, and lay the groundwork for badly needed reform, he asserts.

"The Recovery Act wasn’t designed to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall," he says. "It was designed to spur demand and get people spending again and cushion those who had borne the brunt of the crisis. And it was designed to save jobs and create new ones."

He counsels patience, cautioning against those already calling for a second stimulus package.

"I realize that when we passed this Recovery Act, there were those who felt that doing nothing was somehow an answer," he says. "Today, some of those same critics are already judging the effort a failure although they have yet to offer a plausible alternative. Others believed that the recovery plan should have been even larger, and are already calling for a second recovery plan.

"But, as I made clear at the time it was passed, the Recovery Act was not designed to work in four months – it was designed to work over two years. We also knew that it would take some time for the money to get out the door, because we are committed to spending it in a way that is effective and transparent. Crucially, this is a plan that will also accelerate greatly throughout the summer and the fall. We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity," he adds.

During his weeklong trip to Europe and Africa that wraps up today, attacks grew louder on the stimulus, polls showed declining confidence in his job performance on the economy, and numbers showed continuing steep job losses.

In his address, Obama claims accomplishments abroad, but seeks to reassure Americans that he's focused on the homefront, that he will get federal budget deficits under control even as he tries to pass landmark legislation on healthcare and clean energy, and to remind the public of the depth of the economic crisis he inherited in January.

"We came into office facing the most severe economic downturn since the Great Depression," he says. "At the time, we were losing, on average 700,000 jobs a month. And many feared that our financial system was on the verge of collapse. As a result of the swift and aggressive action we took in the first few months of this year, we’ve been able to pull our financial system and our economy back from the brink."

"I said when I took office that it would take many months to move our economy from recession to recovery and ultimately to prosperity," he adds. "We are not there yet, and I continue to believe that even one American out of work is one too many. But we are moving in the right direction. We are cleaning up the wreckage of this storm. And we are laying a firmer, stronger foundation so that we may better weather whatever future storms may come. This year has been and will continue to be a year of rescuing our economy from disaster."

The full text is below, and the video of the address can be viewed here.

Massachusetts Senators John F. Kerry and Edward M. Kennedy announced today that the Bay State's Department of Housing and Community Development will get nearly $51 million in stimulus cash to help revive the moribund housing market.

Nationally, housing starts have fallen almost 80 percent since the beginning of 2006, and Massachusetts is no exception. The drop in housing construction has led to severe job losses in building and related jobs, more than 1 million nationwide.

“We’ve got more than 750 Massachusetts families and 1,000 children hanging on by their fingernails living in motels at a cost to state taxpayers of nearly $2 million each month. This affordable housing investment will help these families and thousands more who are out of work or struggling with reduced incomes from fewer hours at work by creating good jobs and delivering affordable housing now. It will help keep these working families off the streets and out of shelters for good,” Kerry said in a statement.

“These funds are vital to Massachusetts families who are out of work and reeling from the soaring cost of housing,” added Kennedy. “I commend the Massachusetts Department of Housing and Community Development for its extraordinary commitment to our citizens struggling with housing costs, and I commend President Obama for emphasizing the need to make these important investments that protect families and also create jobs in our Commonwealth.”

While President Obama discusses the global economy in Italy with other world leaders, the volume is getting dialed up on job losses at home.

The unemployment rate is at 9.5 percent -- the highest in 26 years -- and headed into double digits. Employers laid off another 467,000 workers last month, bringing to 6.5 million the net job losses since the recession began in December 2007. And criticism is growing of the $787 billion economic stimulus plan that Obama championed -- and why it isn't creating jobs quicker.

The epicenter of the debate this week is Ohio, the traditional presidential bellwether state where Obama spent quite a bit of time campaigning and where a new poll this week had worrisome numbers for Obama.

Respondents in the Quinnipiac University survey were evenly divided over Obama's handling of the economy -- 48 percent approved, 46 percent disapproved -- and his approval rating had dropped to 49 percent from 62 percent in May while his disapproval number rose to 44 percent from 31 percent.

Quinnipiac called Obama's numbers "lackluster," and said they were the lowest in any national or state poll it had conducted since his inauguration.

Representative John Boehner of Ohio, the top Republican in the House, caused a ruckus over the weekend by claiming that none of the contracts had been let for infrastructure projects funded by the stimulus.

The Democratic National Committee released a web video and is holding a news conference today in Ohio to rebut Boehner, who it says is being hypocritical since the House GOP stimulus plan had no infrastructure projects.

“Given that he championed and continues to advocate the very same economic policies that got us into this mess to begin with, perhaps John Boehner just doesn't know what creating new jobs looks like. Or perhaps he was willfully misleading the public about the effect of the President's economic recovery package to score political points,” DNC spokesman Hari Sevugan said in a statement. “Either way, considering that the Republican 'alternative' included ZERO funding for construction projects, it's the height of hypocrisy for Boehner to criticize the status of these projects at all.”

Michael Steel, a Boehner spokesman, responded: "Ohio was very nearly the last state to get the first 50 percent of its stimulus construction money obligated for construction projects, which is ridiculous. As of late May, approximately, no
contracts had been signed.

"Since that time, some contracts have been belatedly set in motion, but the entire process has been absurdly slow-moving -- just as Republicans warned it would be last winter when we called for an economic recovery bill based on fast-acting tax relief for small businesses and working families rather than spending on slow-moving government programs. It's embarrassing that the DNC can't defend its own indefensible trillion-dollar stimulus that isn't working
and resorts to desperate tactics like this."

The Obama administration concedes that the continuing job losses are unacceptable, but says that the stimulus package was always going to take some time to have measurable impact.

Vice President Joe Biden said over the weekend that the White House might have "misread" the depth of the recession; he plans to visit the state on Thursday to trumpet the stimulus.

But Labor Secretary Hilda Solis said on Fox Business Network that all the stimulus needs to be spent before serious consideration of a second stimulus package.

Solis said she can't predict when the unemployment rate will begin declining.

"We're not looking at just a quick fix here, we're looking at something that is going to take us out of this bad economy for the next decade," she said. "And we have to make these investments that were neglected in the last eight years."

President Obama plans today to highlight the importance of innovation in creating jobs, but at this rate the White House would be happy with any kind of jobs at all.

The Labor Department reported this morning that employers slashed 467,000 jobs last month, bringing the net loss since the recession began in December 2007 to about 6.5 million.

While the job cuts were less than many economists expected, the unemployment rate still rose to 9.5 percent, the highest in 26 years, and most expect the jobless rate will reach 10 percent this year. About 14.7 million people were unemployed in June.

Besides the devastating impact on families and their towns, the growing unemployment rolls are a political problem for Obama, who championed the $787 billion economic stimulus plan, but wants to be able to show more impact to reassure Americans.

In a CNN/Opinion Research Corp. poll released today, 40 percent of respondents said they believe the economy is still getting worse, while 48 percent said it has stabilized, and only 12 percent believe a recovery has begun.

In his last scheduled public event before decamping for Camp David for the Fourth of July holiday, the president plans to meet with the CEOs of large and small companies that are using innovation to add jobs.

His full remarks are below, followed by the White House release, including the list of attendees:

A pro-Obama, Democratic grassroots group unveiled a new TV ad today, lauding the House for passing a landmark climate change bill and urging supporters to call their senators to do the same.

The spot, from Americans United for Change, is to air in Washington this week and asserts that the legislation will create millions of clean energy jobs. "It’s a foundation for America’s long-term economic success, making us world leader in clean energy," the announcer says. "The challenge is global. And the solution uniquely American."

After lots of arm-twisting by President Obama and his aides, and quite a bit of horse-trading, the House on Friday narrowly passed the bill on a 219-212 vote. It is designed to lower how much carbon is pumped into the atmosphere through a "cap-and-trade" system in which carbon emissions are capped and permits to pollute are given away or sold by the government.

But the bill faces tough sledding in the Senate, and some observers don't believe it will pass this year, though Obama wants final passage before he attends an international global warming conference in Copenhagen.

Obama and his allies are ramping up their grassroots efforts to put pressure on senators.

“Thanks to the extraordinary leadership in Congress, America has taken a giant leap towards becoming the global standard for clean energy while creating millions of new jobs in the process," Tom McMahon, acting executive director of Americans United for Change, said in a statement. "This historic legislation will help build a solid foundation for long-term economic prosperity by meeting President Obama’s challenge to reduce our nation’s dependence on foreign oil and curbing pollution that causes global warming. This ad is designed to encourage Congress to continue standing up to the forces of ‘status quo’ and move this historic clean energy jobs bill to the President’s desk as quickly as possible.”

UPDATE: Organizing for America, the current iteration of Obama's grassroots campaign organization, is sending an email today to thousands of members in Representative Ed Markey's district, urging them to call the Massachusetts congressman with thanks for his leadership on the energy bill.

"We know that historic change is always tough, and enacting clean energy legislation is no exception," wrote Addisu Demissie, the group's political director. "But, with your help, on Friday the House passed a historic energy bill -- a critical first step toward rebuilding our economy with good green jobs, reducing harmful pollution, and breaking our dependence on foreign oil."

The White House announced late this afternoon that top officials will go on the road this summer -- not to big cities, but to often-neglected rural areas to discuss how communities, states, and the federal government can work together to strengthen rural America.

Vice President Joe Biden, Commerce Secretary Gary Locke, and Agriculture Secretary Tom Vilsack will kick off the Rural Tour on Wednesday to visit Wattsburg, Pa., to discuss the issue of rural broadband.

“A healthy American economy depends on a prosperous rural America,” President Obama said in a statement. “Rural America is vast and diverse, and different communities face different challenges and opportunities. That’s why we’re going out to hear directly from the people of rural America about their needs and concerns and what my Administration can do to support them.”

The other stops scheduled so far:

July 16, Transportation Secretary Ray LaHood and Vilsack will travel to La Crosse, Wisc., to discuss rural economic development.

July 18, Energy Secretary Steven Chu and Vilsack will travel to Ringgold, Va., to discuss green jobs and a new energy economy, with a focus on weatherization and carbon sequestration.

July 20, Health and Human Services Secretary Kathleen Sebelius, Veterans Affairs Secretary Eric Shinseki, Labor Secretary Hilda Solis, and Vilsack will travel to St. John’s Parish, La., to discuss rural healthcare.

Aug. 12, Housing Secretary Shaun Donovan, Education Secretary Arne Duncan, Interior Secretary Ken Salazar, Chu, and Vilsack will travel to Bethel, Alaska, to discuss rural infrastructure, green jobs and a new energy economy, as well as climate change.

Aug. 16, Salazar and Vilsack will travel to Zanesville, Ohio, to discuss green jobs and a new energy economy, with a focus on renewable energies.

Aug. 17, Duncan and Vilsack will travel to Hamlet, N.C., to discuss rural education.

Sept. 28, Salazar and Vilsack will travel to Scottsbluff, Neb., to discuss production agriculture.

Sept. 30, Donovan and Vilsack will travel to Las Cruces, N.M., to discuss rural infrastructure.

President Obama held an event this afternoon to trumpet one of his biggest legislative victories so far -- the narrow House passage late Friday of the first-ever bill to tackle global warming.

The sweeping legislation, passed on a 219-212 vote, would rewrite US environmental policy in the most significant way since the 1970s Clean Air Act and would create a controversial cap-and-trade system that would limit carbon emissions and under which the government would sell or give away permits to emit limited amounts.

Obama said it is time for bold action to build on what he called more action on clean energy in the last few months than in the past few decades, including new fuel efficiency standards for all vehicles and green jobs in the economic stimulus plan. He also announced new efficiency standards, including compact fluorescent light bulbs. (His full remarks are below, followed by the White House release.)

He called the climate change bill "extraordinary," saying it will open the door to a clean energy economy, end US dependence on foreign oil, and create thousands of jobs. but he also has quibbles with the House version.

During his campaign, Obama called for all the pollution permits to be sold to help raise money for other priorities, but went along with House Democrats' plan to give many of them away to help lower the cost to industry.

On Sunday, Obama also acknowledged reservations about a provision that would punish trading partners that don't work to curb pollution. "At a time when the economy worldwide is still deep in recession and we've seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals out there," he told reporters.

House Republicans railed against the bill, saying it amounted to an energy tax on Americans -- and Senate Republicans quickly indicated they will use the same line of attack to try to stop the bill.

Senate Republican leader Mitch McConnell said on "Fox News Sunday" that the measure would lead to "significant increases" in electricity costs across the country.

But in his weekly Internet and radio address on Saturday, Obama urged the Senate not to listen to the naysayers. "We cannot be afraid of the future," he said. "And we must not be prisoners of the past. Don’t believe the misinformation out there that suggests there is somehow a contradiction between investing in clean energy and economic growth. It’s just not true."

While Obama and supporters say the bill is a historic advance, some liberal allies say it doesn't go far enough.

MoveOn.org, the major advocacy group, sent a fund-raising missive to members today asking for a vote whether to fight the bill in the Senate.

"The US House passed a huge energy bill Friday. Lots of good people are applauding the passage of this legislation. But here's the ugly truth: Big Oil and Coal lobbyists, working in cahoots with some conservative Blue Dog Democrats, weakened the bill terribly—it now falls far short of President Obama's campaign vision to transition America's economy to clean energy and create millions of new jobs," the email said.

"In fact, the bill repeals a key part of the Clean Air Act and doesn't do nearly enough to shift America to renewable energy -- so instead of a boom in solar and wind, the bill locks us into dirty coal power for another generation.... o win in the Senate, we need to make sure everyone understands that the Clean Air Act is under attack and highlight the other big problems with the bill. If we decide to proceed with this campaign together, we'll boost progressive champions like those who fought in the House, and expose conservatives who do the bidding of the oil and coal industry."

President Obama bragged this afternoon about 10 of the nation's largest banks repaying $68 billion in government bailout money.

"Taxpayer dollars were used to stabilize the financial system at a time of extraordinary stress. And these funds were also meant to be an investment -- and they were meant to be temporary. And that's why this morning's announcement is important," the president said at the White House.

"Several financial institutions are set to pay back $68 billion to taxpayers. And while we know that we will not escape the worst financial crisis in decades without some losses to taxpayers, it's worth noting that in the first round of repayments from these companies the government has actually turned a profit," he added.

"This is not a sign that our troubles are over -- far from it. The financial crisis this administration inherited is still creating painful challenges for businesses and families alike. And I think everybody sees it in their own individual districts. But it is a positive sign. We're seeing an initial return on a few of these investments. We're restoring funds to the Treasury where they'll be available to safeguard against continuing risks to financial stability. And as this money is returned, we'll see our national debt lessened by $68 billion -- billions of dollars that this generation will not have to borrow and future generations will not have to repay.

"I've said repeatedly that I have no interest in managing the banking system -- or, for that matter, running auto companies or other private institutions. So today's announcement is welcome news to me. But I also want to say the return of these funds does not provide forgiveness for past excesses or permission for future misdeeds. It's critical that as our country emerges from this period of crisis, that we learn its lessons; that those who seek reward do not take reckless risk; that short-term gains are not pursued without regard for long-term consequences."

The Treasury Department announced today that it has approved the repayments from the banks, which withdrew cash from the $700 billion Troubled Asset Relief Program created by Congress last October at the height of the financial crisis.

Barack Obama is president, but he's also still a politician.

So after trying to shore up his support on how he's handling the economy with a high-profile pledge on Monday to ramp up the impact of the $787 billion stimulus package, today he's focusing on his weakest area -- federal spending.

With the deficit this year headed to a record $1.8 trillion -- four times the previous high -- Obama outlined new rules that would require Congress to pay for any new tax cuts or spending, including an overhaul of the healthcare system.

He spoke at the White House on what is known as "PAYGO" -- as in pay as you go.

"The 'pay as you go' rule is very simple," he said. "Congress can only spend a dollar if it saves a dollar elsewhere. This principle guides responsible families managing a budget. And it is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s -- and that when this rule was abandoned, we returned to record deficits that doubled the national debt. Entitlement increases and tax cuts need to be paid for. They are not free, and borrowing to finance them is not a sustainable long-term policy.

"Paying for what you spend is basic common sense. Perhaps that's why, here in Washington, it has been so elusive."

Obama said he is sending Congress a bill to turn the proposals into law.

(His full remarks are below, followed by a White House release on the proposals.)

Obama announced rules -- similar to those used by President Bill Clinton to produce budget surpluses -- that would ban lawmakers from expanding entitlement programs such as Medicare and Social Security, creating new entitlement programs, or cutting taxes unless they are paid for with spending cuts or tax increases. If lawmakers fail to do so, entitlement programs would be automatically cut.

Obama invited members of Congress, including fiscally conservative Democrats in the "Blue Dog Coalition," whose support he needs on healthcare and other parts of his ambitious agenda.

A new Gallup Poll reinforces that while Obama's job overall approval rating remains high at 61 percent, and he gets high marks on his handling of foreign affairs, his disapproval number is at the highest of his presidency, at 34 percent, eroded by increasing doubts on some of his policies. Disapproval of how he is handling the economy has risen from 30 percent in February to 42 percent in late May.

And more Americans now disapprove than approve how he is handling the federal budget deficit (46 percent approval, 48 percent disapproval) and how he is controlling federal spending (45 percent approval, 51 percent disapproval).

"This latest Gallup Poll shows that the US public has significantly differentiated views on various dimensions relating to Obama. Americans are most positive when asked about their basic opinions of Obama as a person. They also are positive when asked to assess his overall job performance, and on aspects of his performance relating to foreign and international issues. Americans have become increasingly less positive about Obama's handling of the economy in recent months, and are most negative when asked to say whether they approve of his handling of the federal deficit and federal spending," Gallup says.
"The good news for Obama is that the public continues to be quite positive when asked to rate him as a person and to rate his overall job performance -- both of which are presumably summaries of Americans' views of their president across all of the ways in which he could be evaluated."

The new poll, conducted May 29-31, has a margin of error of plus or minus 3 percentage points.

By Alan Wirzbicki, Globe correspondent

WASHINGTON -- The White House pulled out all the stops today, seeking to reassure Americans that the $787 billion economic stimulus package is working and outlining plans to save or create 600,000 jobs in the next three months by speeding up the program.

It launched a new website, it offered specific figures on the projects nationwide where spending will be accelerated, and top economic adviser had a PowerPoint presentation, including maps filled with dots pinpointing the projects.

But getting an actual list of projects turned out be heavy lifting. The White House didn't provide one, but referred reporters to various departments.

Some agencies had state-by-state rundowns, but others didn't. Curiously, for instance, the White House said that work would begin or be sped up on 20 Superfund sites, but the Environmental Protection Agency could not identify them. (Three sites in Massachusetts -- New Bedford Harbor, Hatheway & Patterson in Mansfield, and Silresin Chemical in Lowell -- are eventually scheduled to receive between $45 million and $85 million in stimulus funding.)

Here's what the Globe was able to compile about Massachusetts:

Agriculture: Start 200 new rural wastewater and water systems nationwide.
Massachusetts: Manchaug water district in Sutton, $1.4 million in grants and loans.

Defense: Initiate 2,300 projects at 359 military facilities nationwide.
Massachusetts: Unavailable.

Education: Fund 135,000 jobs, including teachers, principals and support staff nationwide.
Massachusetts: Unavailable.

Environment: Begin or accelerate cleanup at 20 Superfund sites nationwide.
Massachusetts: Unavailable.

Health and Human Services: Enable 1,129 health centers to serve 300,000 patients nationwide.
Massachusetts: 36 community clinics, $9.9 million total.

Interior: Begin repairs and other work at 107 national parks and historic sites nationwide.
Massachusetts: Charlestown Navy Yard, Bunker Hill Monument, Historic Longfellow House, Lowell historic mills, Saugus Iron Works, $9.2 million total.

Justice: Speed grants to hire or keep on the job 5,000 law enforcement officers nationwide.
Massachusetts: 210 agencies have applied for money for 922 jobs so far.

Labor: Create 125,000 summer youth jobs nationwide.
Massachusetts: $25 million for slots, including about 800 in Boston.

Transportation: Begin work on projects at 98 airports and more than 1,500 highway locations nationwide.
Massachusetts: Taxiway repairs at Hanscom Field in Bedford, Beverly Municipal Airport, and Orange Municipal Airport.
Also, Interstate 95 between Lexington and Reading, Route 6 in Swansea, Routes 18 and 28 in Bridgewater and Middlesborough, Route 116 in Adams, Route 6 in Bourne, $15.3 million total.

Veterans: Begin improvements at 90 veterans medical centers in 38 states.
Massachusetts: Unavailable.

Note: Dollar figures represent total funding, not necessarily how much will be spent in next three months.

After reaching out to Muslims and reassuring allies on his second world trip, President Obama returned today to job one on the domestic front -- reviving the economy, still bleeding hundreds of thousands of jobs a month.

He and Vice President Joe Biden convened his cabinet this morning to ramp up the impact of the $787 billion stimulus package in its second 100 days, announcing 10 major new projects designed to create or save more than 600,000 jobs in the second 100 days – compared to 150,000 in the first 100 days.

UPDATE: Before the cabinet session, Obama said the slowing pace of job losses is "a sign we're moving in the right direction."

But there are still far too many people losing their jobs and in danger of losing their homes, he said. It's a reminder that the US is still in a "very deep" recession and it will take a "considerable amount of time" to pull out of the tailspin.

The Labor Department reported on Friday that employers cut 345,000 jobs in May -- the lowest monthly total since September. But 787,000 more people joined the unemployment rolls, increasing the national rate to 9.4 percent, the highest in more than a quarter century.

Obama highlighted the impact of the stimulus package, but acknowledged that continuing job losses will further the negative economic cycle by reducing spending and hurting businesses. Now, he said, the stimulus package must reverse that cycle.

"I'm not satisfied. We've got more work to do," he said. "Now we're in a position to really accelerate."

Obama pledged anew to spend the money transparently and avoiding "boondoggles." And he hit back at his critics, saying that they should talk to people who have been helped by the stimulus package.

(The full remarks of Obama and Biden are below.)

The White House statement asserted that the work during the first 100 days "focused on providing immediate relief to hard-hit families and communities, jump-starting shovel-ready projects, and laying the foundation for large-scale infrastructure improvement programs."

The White House also released a "roadmap to recovery" -- a graphic representation of where the new projects will happen. It said that Obama will urge the cabinet to meet these targets during the second 100 days:

Enable 1,129 health centers to serve 300,000 patients – Department of Health and Human Services

Begin work on 107 national parks – Department of the Interior

Begin work on projects at 98 airports and more than 1,500 highway locations – Department of Transportation

Fund 135,000 education jobs, including teachers, principals and support staff – Department of Education

Begin improvements at 90 veterans medical centers in 38 States – Department of Veterans Affairs

Hire or keep on the job 5,000 law enforcement officers – Department of Justice

Start 200 new waste and water systems in rural America – United States Department of Agriculture

Begin or accelerate cleanup work at 20 Superfund sites -- Environmental Protection Agency

Create 125,000 summer youth jobs – Department of Labor

Initiate 2,300 construction and rehabilitation projects at 359 military facilities - Department of Defense

Obama has been under fire from Republicans and others for what they call the slow pace of job creation. Not a single House Republican voted for the package before it passed in February, and its leadership sent out a list of questions this morning in advance of Obama's announcement:

Does anyone really know how many jobs the stimulus has “saved or created”?

Why is stimulus spending bypassing the states hit hardest by the recession?

Does anyone know how much stimulus money has actually been spent?

Does $59,000 equal $27 million in stimulus money spent?

Who is being scammed by the stimulus?

Republicans also immediately jumped on a remark this morning by Vice President Joe Biden's chief economist, Jared Bernstein.

"The 600,000 jobs are full-time equivalence, meaning that if there are two part-time jobs they count as one full-time job. So that's some real employment in the job market,” Bernstein said on CNBC.

"Apparently, the 600,000 jobs the stimulus will 'save or create' over the next 100 days are not long-term, full-time jobs but temporary, part-time jobs. It’s statements like these that lead to real questions about the administration’s stimulus math," said Joe Pounder, a spokesman for Representative Eric Cantor, the No. 2 Republican in the House.

One group critical of Obama, Americans for Tax Reform, put out statistics of its own today, questioning the White House jobs saved number.

Figuring in the 1.5 million jobs lost since Obama signed the stimulus bill in February, and the $47.3 billion spent as of May 29, the group said "each lost job has cost taxpayers $2,900."

But Obama's labor allies praised his push. The Laborers International Union of North America's general president Terry O’Sullivan, issued a statement: "We commend President Obama and Vice President Biden for working to accelerate the speed of jobs created from the economic recovery plan. While the pace of construction job loss was cut by half in the last month, we agree with the Obama administration that 'not as bad is not good enough.' The best thing to bring relief to struggling Americans is good jobs with good paychecks."

"The economic recovery plan has already started to put people back to work and accelerating the funding for projects to build America will create more jobs that workers desperately need," O'Sullivan continued. "But even after the recovery plan creates or support an anticipated 700,000 construction jobs, there will still be more than 1 million unemployed construction workers. To create good jobs and demonstrate a sustained commitment to fixing our economy and taking care of our country we need a much greater investment to build America starting with the upcoming surface transportation reauthorization and the water bill currently waiting for action in the Senate. We know what’s working to get people back to work – for the sake of our country and economy, we must not only do it faster, but also do more of it."

Responding to the latest unemployment numbers, Vice President Joe Biden said today that he and President Obama will announce Monday plans to "ramp up" the pace of projects from the $787 billion economic stimulus plan.

The Labor Department reported that while employers cut 345,000 jobs in May -- the lowest monthly total since September -- the national unemployment rate still rose to 9.4 percent, the highest in more than a quarter century.

Biden called the numbers "tough" but said there are also "some signs of hope today," according to the press pool report before his meeting with his chief economist, Jared Bernstein, and Christina Romer, chairwoman of the White House Council of Economic Advisors.

Still, he told reporters, "It doesn't satisfy me, it doesn't satisfy the president. Less bad is not how we're going to measure success. We will not be satisfied until we are adding jobs on a monthly basis."

He did not offer more specifics about the Monday announcement.

Biden, who was put in charge of overseeing the recovery package by Obama, said that 3,600 projects are underway from the stimulus package, and that today's jobs report shows "some signs" of this.

"We still have a very long way to go," Biden said, adding "We're working to build that foundation every day we're here." (His full remarks are below.)

Critics, however, have complained that money for roads and other infrastructure projects, and have questioned the administration's jobs figures -- more than 150,000 saved or created as of late last month, 100 days after the stimulus was passed.

But the top House Republican, John Boehner of Ohio, used the jobs report to lay into the Obama administration's policies and the effectiveness of the stimulus package, which not a single GOP representative supported.

"Today's unemployment rate is the highest in more than a quarter century, and it's another reminder of how Washington is hanging middle-class Americans out to dry. More than 2.5 million Americans have lost their jobs this year, and what have the Democrats in charge of Washington given them? A trillion-dollar 'stimulus' that isn't producing jobs immediately, as the Administration promised, and that Vice President Biden admits is ripping off the American people. Another $400 billion spending bill loaded with 9,000 unscrutinized earmarks. And bailouts that reward irresponsible behavior and bad business decisions. These policies are harming middle class families when they can least afford it and adding to the massive debt inherited by future generations," he said in a statement.

"There is a better way. Doubling down on the Democrats' plans to tax more, spend more, and borrow more from our children and grandchildren is not the right answer to this economic crisis. Republicans have offered better solutions to create more jobs, curb spending, cut taxes, rebuild savings, and control the debt, and we have reached out to our Democratic counterparts to work on these policies in a constructive way. I urge Democrats in Congress and the Administration to finally follow through on their promises of bipartisan cooperation."

Answering a challenge from President Obama, House Republicans today outlined what they called "common-sense" savings totaling $375 billion over five years.

In a letter and proposals to Obama, the Republicans listed a host proposals -- many of them familiar -- including consolidating federal arts funding, ending "ineffective" and "duplicative" education programs, and terminating other small-bore federal agencies. (Click here to read them.)

"The President challenged us to come up with budget savings, and today House Republicans encourage him to not only look over our proposed list of $375 billion common-sense taxpayer savings, but to join our effort," Representative Eric Cantor, the No. 2 Republican in the House, said in a statement. "For the sake of our young people and America’s long-term fiscal viability, Congress simply cannot keep spending money that the President himself admits we don’t have. We have an opportunity to work together to finally start to bring some accountability to the way Washington spends taxpayer dollars, and I hope it’s taken seriously by the Administration and the Democrat majorities in Congress."

That would be far more than the $100 million in budget savings that Obama outlined at his first cabinet meeting in April. The president said those trims would set a new tone, but acknowledged they amount to a "drop in the bucket" when the federal deficit is projected to reach a record $1.84 trillion this year -- four times the previous high.

Obama's $3.6 trillion budget for the fiscal year that starts Oct. 1 has been criticized, by some Democrats as well as Republicans, because it would mean a projected $9.3 trillion in deficits over the next decade.

For a president who complained at first about all the hoopla over the 100-day milestone, which he termed an artifice, he seems to be embracing it now.

President Obama held a town hall and a primetime news conference to mark his first 100 days in office last month. And today, he held an event to mark the first 100 days under the $787 billion economic stimulus plan.

He toured the solar power array at Nellis Air Force Base in Las Vegas, then delivered a speech "highlighting the progress the country has made in the first 100 days of the American Recovery and Reinvestment Act and the work that has been done to build a new foundation for America’s economic recovery," the White House says.

Obama also released a report from Vice President Joe Biden, whom he has put in charge of making sure the money is well spent, on stimulus projects already underway across the country.

“One hundred days ago, in the midst of the worst economic crisis in half a century, we passed the most sweeping economic recovery act in history – a plan designed to save jobs, create new ones, and put money in people’s pockets,” Obama said. “....One hundred days later, we're already seeing results.”

(His full remarks are below.)

The White House said that more than $112 billion has been spent or pledged and more than 150,000 jobs have been created or saved. The president highlighted $467 million to expand and accelerate the development and use of geothermal and solar energy throughout the country.

The White House released a "100 Days, 100 Projects" report, with highlights that are below. (Click here to read it.)

As Republican leaders gather to find the way forward, a new poll shows the tough sledding ahead.

While 63 percent of Americans say President Obama's policies would move the country in the right direction -- and 57 percent say that of Democratic leaders in Congress -- only 39 percent say so of GOP congressional leaders, according to the CNN/Opinion Research Corp. survey.

The poll found that 53 percent of respondents believe the policies being proposed by Republicans would put the country on the wrong path. And 53 percent also blame Republicans and only 21 percent Democrats for the economic swoon.

Meanwhile, 37 percent say Obama's prescriptions have improved the economy, while 23 percent say his policies have made the economy worse, and 40 percent say they have had no impact.

UPDATE: This afternoon, the party leaders trashed a proposal to start calling their opponents the "Democrat Socialist" party.

The Associated Press reports that instead, they plan to vote on a resolution urging Americans to oppose the Democrats' "socialist" agenda. GOP Chairman Michael Steele and others had opposed the resolution urging the Democrats to change their name, calling it absurd.

President Obama this afternoon signed two significant bills that he hopes will help fix the struggling housing market.

“These landmark pieces of legislation will protect hardworking Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us into this crisis never happen again,” Obama said.

One is designed to clamp down on mortgage fraud and would set up a $5 million independent commission to investigate the cause of the worldwide financial meltdown.

The $265 million a year from the bill, which supporters say will pay for itself through additional fines and penalties, would go to hire about 160 more FBI agents and 200 more Justice Department prosecutors to work on mortgage fraud cases.

The other encourages banks to help homeowners avoid foreclosure by expanding a $300 billion program that pushes lenders to write down an individual's mortgage if the homeowner agrees to pay an insurance premium.

His full remarks are below, followed by a White House.

Because of the current strict eligibility requirements, only about 50 homeowners are refinancing through the program, compared to the 400,000 it was supposed to help. The bill does not include the so-called cram-down provision that would have allowed bankruptcy judges to reduce mortgage payments. Obama wanted the proposal, but banks and other lenders vehemently opposed it.

Earlier today, Obama huddled with more of his economic brain trust, attending the first quarterly meeting of the President’s Economic Recovery Advisory Board.

Afterwards, Obama thanked its chairman, former Federal Reserve chief Paul Volcker, for the panel's "extraordinary work."

The committee has an "impressive" though not unanimous consensus on the potential of clean energy jobs, Obama told reporters. It is also helping advise him on an overhauled financial regulation plan the administration plans to put before Congress this year, Obama said.

President Obama declares today that, yes, we can all get along.

In his weekly Internet and radio address, he says that advocates for opposing interests are coming to the table and negotiating in good faith on healthcare and energy -- to name two major issues being debated in Washington.

On climate change and clean energy legislation, "utility companies and corporate leaders are joining, not opposing, environmental advocates and labor leaders to create a new system of clean energy initiatives that will help unleash a new era of growth and prosperity."

On a healthcare overhaul, "representatives of insurance and drug companies, doctors and hospitals, and labor unions who are pledging to do their part to reduce health care costs. These are some of the groups who have been among the fiercest critics of past comprehensive health care reform plans."

"I have always believed that it is better to talk than not to talk; that it is far more productive to reach over a divide than to shake your fist across it. This has been an alien notion in Washington for far too long, but we are seeing that the ways of Washington are beginning to change," Obama added.

"This is how progress has always been made. This is how a new foundation will be built. We cannot assume that interests will always align, or that fragile partnerships will not fray. There will be setbacks. There will be difficult days. But we are off to a good start."

His full remarks are below, and the address can be viewed here:

Vice President Joe Biden, put in charge of the $787 billion economic stimulus package, submitted his first status report today.

The highlights of the first 77 days under the recovery act (through May 5), according to the White House:

· 150,000 jobs have been created or saved
· More than $88 billion has been made available for programs and projects
· More than 3,000 transportation construction projects have been funded in 52 states and territories
· Ninety-five percent of working families have begun getting tax credits in their paychecks
· COBRA health insurance premiums have been reduced by 65 percent
· Unemployment benefits have increased by $25 a week
· States have drawn down $15.7 billion in medical assistance funds, allowing them to avoid budget cuts
· Thirteen states have qualified for funds to improve education programs and save education-related jobs

"Looking ahead, an additional 600,000 jobs are expected to be created or saved under the Recovery Act in the next 100 days and billions of dollars in contracts and grants are expected to be awarded in the coming months," the White House said. "The report finds that the anticipated funds are already having an effect on economic and job growth as private sector companies staff up to meet expected demand for their products under Recovery Act programs and state and local governments adjust their spending plans ahead of receiving additional Recovery Act funds."

UPDATE: Republicans noted, however, that more independent analyses by the New York Times, the Associated Press, and others have suggested that the stimulus cash is trickling out or going to places not in as dire need as others.

Ask most Americans about former President Jimmy Carter and energy, and they'll probably recall the long gas lines during the 1970s Arab oil embargo and the 1979 "malaise" speech in which he outlined his plan for energy efficiency and reducing oil imports.

Today, he is being called upon to offer a "historical review"of US efforts to address energy security before the Senate Foreign Relations Committee.

Carter testified that there has been "a long period of energy complacency" and that the US is now lagging behind "many other nations in the production and use of windmills, solar power, nuclear energy, and the efficiency of energy
consumption."

"Our inseparable energy and environmental decisions will determine how well we can maintain a vibrant society, protect our strategic interests, regain worldwide political and economic leadership, meet relatively new competitive challenges, and deal with less fortunate nations. Collectively, nothing could be more important," he said, according to prepared remarks.

“President Carter has an unparalleled understanding of the depth and scope of the energy security challenges facing our nation, and we are honored to welcome him to the committee,” committee Chairman John F. Kerry said in a statement announcing Carter's appearance.

“This hearing will launch a series of targeted investigations into the manifestations and implications of our dependence on foreign oil, as well as the geopolitical challenges associated with current patterns of global energy flows.”

Kerry's opening statement at the hearing is below:

Critics -- including many Republicans and some economists -- have questioned President Obama's assertion that the economic stimulus package will create or save 3.5 million jobs.

It is exceedingly difficult, they note, to prove that a job was "saved." "If we lose over a million jobs since the stimulus passed, the administration can still claim to save 150,000. 'Save' is a communications department's greatest 'saving grace," the office of House GOP whip Eric Cantor said in an email today.

The skeptics are sure to have a field day with the new report from the president's Council of Economic Advisers that revises the estimate of job creation from the $787 billion stimulus package.

Besides repeating the 3.5 million jobs figure as of the fourth quarter of 2010, the report introduces a new number -- 6.8 million "job-years" saved or created hrough the end of 2012.

"For some purposes, looking at the effects at a single point in time is not the most useful approach," the report says. "Since the economy is likely to be operating below capacity for several years, job creation at any time over the next several years is valuable.

"Thus, a second way to look at the employment effects of the program is to estimate the number of job-years the program will create over the President's first term. A job-year means simply one job for one year."

The job-years include "direct jobs" created by government-sponsored projects, "indirect jobs" created at suppliers who make materials used in projects, and "induced jobs" created elsewhere in the economy from increased spending by workers and companies.

To read the report, click here.

Americans for Tax Reform, a group critical of Obama, noted that federal statistics show 1.9 million jobs lost since Obama took office.

"Obama and his economic advisors have resorted to the invention of highly questionable new metrics such as the number of ''saved' jobs and – making its debut today -- the number of 'job-years' created," the group said today.

It cited Senator Max Baucus, chairman of the Senate Finance Committee, responding to Treasury Secretary Timothy Geithner during a hearing: "You created a situation where you cannot be wrong. If the economy loses 2 million jobs over the next few years, you can say yes, but it would've lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs. You've given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct."

That $1.3 trillion deficit that President Obama likes to say he inherited whenever questioned on his spending?

Well, it has ballooned to a projected $1.8 trillion. And Obama has no one to blame but himself -- and the economic crisis, which has helped force the federal government to borrow about 50 cents of every $1 it forks out.

The deficit figure for the current budget -- which ends Sept. 30 -- is about quadruple last year's number. And that figure was an all-time record.

Since George W. Bush left office, the economy has gone further in the tank, and Obama and Democratic allies in Congress have pushed through a $787 billion stimulus package and a $410 billion supplemental budget bill.

The White House is now predicting the deficit will be $87 billion higher than expected for the 2010 budget year that begins Oct. 1, rising to $1.3 trillion.

President Obama uses his weekly Internet and radio address today to pressure Congress to pass a credit card reform bill by Memorial Day.

"Americans know that they have a responsibility to live within their means and pay what they owe," the president says. "But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all-too common in our credit card industry. You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application. And the abuses in our credit card industry have only multiplied in the midst of this recession, when Americans can least afford to bear an extra burden."

Obama called in the heads of major credit companies to the White House last month. Afterwards, industry representatives said those in the meeting discussed the need for a balance between protecting consumers and keeping credit available during the recession.

The House last week passed legislation to restrict abusive credit card practices and eliminate sudden increases in interest rates and late fees. The Senate is expected to vote next week.

"It is past time for rules that are fair and transparent," Obama says in his address. "That is why I have called for a set of new principles to reform our credit card industry. Instead of an 'anything goes' approach, we need strong and reliable protections for consumers. Instead of fine print that hides the truth, we need credit card forms and statements that have plain language in plain sight, and we need to give people the tools they need to find a credit card that meets their needs. And instead of abuse that goes unpunished, we need to strengthen monitoring, enforcement, and penalties for credit card companies that take advantage of ordinary Americans."

His full address is below. To see the web video, click here.

With the new jobless numbers offering that "glimmer of hope" he has been pitching, President Obama today to offered more help to the unemployed.

The lower figures, he said, are no "solace" to the laid-off who can't find jobs and struggle to support their families. And to emerge stronger from the recession, the nation's workforce must come out stronger out of the downturn.

So he laid out proposals to allow people without work to enroll in community college and other education and training programs without sacrificing their unemployment checks. He also wants to make it easier for the jobless to qualify for financial aid for colleges by not basing their eligibility on their prior year's income when they had a job.

The current rules are "senseless" when workers need to prepare themselves for jobs that often require more training. He cited the case of a Maine woman who did get help because the state already has such regulations.

"That's what our unemployment system should be, not just a safety net, but a stepping stone to a new future," Obama said.

Obama also announced a new website (click here) where laid-off workers can find out more about educational opportunities. He also announced that Jill Biden, the vice president's wife who has taught at community colleges, will lead an effort to raise awareness of what they offer.

Obama spoke hours after the Labor Department reported that the pace of layoffs slowed in April, when employers slashed 539,000 jobs, the fewest in six months. But after revised, higher numbers of layoffs in February and March, the unemployment rate rose to 8.9 percent, the highest in more than a quarter century. And since the recession began in December 2007, the economy has lost 5.7 million jobs

The layoffs are "still a sobering toll" and it could take years to recover from the recession, the president said. (His full remarks are below.)

The National Employment Law Project praised Obama's initiatives, saying in a report that despite federal law barring states from denying unemployment benefits to workers in “state-approved training,” many states only allow limited access to benefits.

“In a time when unemployment is at near-unprecedented levels, with long durations of joblessness and substantial job loss -- and with the federal government picking up the tab for 20 to 53 weeks of extended jobless benefits for the long-term unemployed, it is critical that states adopt this change to give workers the chance to develop skills that will help them find sustained work and stay afloat while they do so," the group's policy co-director, Maurice Emsellem, said in a statement.

Representative John Boehner, the House Republican leader, also jumped on the numbers, using them to criticize Obama's game plan. "About two and a half million jobs have been lost since the beginning of the year, yet some here in Washington continue to believe that we can borrow and spend our way back to prosperity," Boehner said in a statement. "Rather than working across the aisle on plans to create more jobs, rebuild Americans' savings, and reinvigorate the housing market, the spending, taxing, and borrowing binge that the Administration and Congress have set out on in the first four months of this year isn't helping our economy."

Predictably, Republicans bashed President Obama's budget, the details of which were submitted on Thursday.

But Democrats, too, are questioning some of the $17 billion or so in cuts. And so are Democratic-leaning advocacy groups.

Add to that list today the National Council of La Raza, the largest national civil rights and advocacy organization in the United States, which joined Republicans in noting that some of the proposed trims were unsuccessfully pushed by former President Bush, but from a different political perspective.

“What we have seen so far with the budget is discouraging and suggests that some of the key priorities of the Latino community are not those of the administration. I am very surprised that the Obama administration in its first budget would mirror similar cuts made by the Bush administration,” Janet Murguía, the council's president and CEO, said in a statement.

She cited the funding for health programs serving Latinos, and unemployment programs, even though the jobless rate among Hispanics has reached 11.4 percent. The council also expressed concern in "the lack of investment" in programs for parents, family literacy, and English learners.

“We realize this is just a proposal and Congress has the opportunity to deliver a budget that works for all Americans and we will continue to work with the Administration and Congress to achieve that,” Murguía added.

A liberal-labor coalition takes a whimsical approach in a new Mother's Day-themed web video urging Americans to support President Obama's economic agenda.

The video from Americans United for Change -- a major ally for the president in organizing grassroots support -- features old-timey organ music and a series of scenes of children offering their mothers what they really want.

"Equal pay (and flowers)," it says on screen as a young girl holds out a bouquet.

Then, "more college aid for our kids (and less laundry)" as kid throws clothes out of a basket.

And finally, "health care we can count on (and breakfast in bed)" as two kids hold out a tray.

The spot ends with a call to call Congress: "Tell them to support President Obama's agenda for families."

The relatively paltry size and breadth of his budget cuts are getting widely panned so far, but an undaunted President Obama declared this morning that he is streamlining government to get rid of wasteful or ineffective spending.

He formally unveiled a list of 121 proposed budget cuts totaling nearly $17 billion -- barely a dent in the $3.4 trillion federal spending plan that Congress has approved for the fiscal year that starts Oct. 1.

Obama acknowledged some of the cuts he wants are less than $1 million. That might be considered a pittance in Washington, he said, but most Americans still see the dollar amounts as significant -- and the savings "add up."

"Even by Washington standards, that should be considered real money," he said.

"We have to admit that there is a lot of money that's being spent inefficiently, ineffectively, and, in some cases, in ways that are actually pretty stunning," he said.

"Some programs may have made sense in the past -- but are no longer needed in the present. Other programs never made any sense; the end result of a special interest's successful lobbying campaign. Still other programs perform functions that can be conducted more efficiently, or are already carried out more effectively elsewhere in the government.

As an example of obsolete programs, he cited a long-range radio navigation system that costs $35 million a year. "Now there's GPS," he said.

About half the trims would come from defense programs and the other half from domestic programs, but at the same time Obama is proposing significant increases in some domestic priorities. About 80 of the targeted programs are new to the cut list, and some of the cuts, Obama conceded, will be painful.

That list is only a start, he and his top budget aides argue, but they also acknowledge that much bigger savings are more likely through the healthcare overhaul that the president wants.

"We recognize that there remain looming challenges to our fiscal health beyond that -- challenges that will require us to make healthcare more affordable and to work on a bipartisan basis to address programs like Social Security," Obama said. "So what we're proposing today does not replace the need for large changes in non-discretionary spending."

But Republicans are deriding the cuts as insignificant.

On the Senate floor, Senator Judd Gregg said the savings would have no impact on the federal deficit, projected at $1.5 trillion this year, especially when Obama is adding back "massive spending."

He likened what Obama proposes to taking a "few pieces of sand off the desert."

Obama's full prepared remarks are below, followed by a White House fact sheet on the cuts:

President Obama plans on Thursday to unveil a list of 121 budget cuts totaling nearly $17 billion, the latest installment of his pledge to scrub the federal budget "line by line" for wasteful spending.

A senior White House official told reporters that the cuts would total nearly $17 billion in the fiscal year that starts Oct. 1 and more in subsequent years, with about half the cuts from defense programs and the other half from domestic programs.

"This is an important step in the process, but it's only a step in the process," said the senior administration official, who spoke only on condition of anonymity to discuss the proposals before they are made public. "In many cases we have multiple programs that are doing the same thing, and that drives up administrative costs unnecessarily....We are searching for things that work and trying to cut back on things that do not work."

One example the official cited is a long-range radio navigation system that costs $35 million a year but has been made obsolete by the prevalence of global positioning systems. "It's not used, it's unnecessary, it costs us $35 million a year, and we perpetuate it just through inertia," the official said.

Another is saving $142 million by no longer making payments to states to clean up abandoned mines that have already been cleaned up, and a third is to have the Department of Education use email and videoconferencing instead of stationing an attaché in Paris. That would save $632,000 a year, the official said.

The official said that about 80 of the targeted programs are new and that much bigger savings are possible through the healthcare overhaul that the president wants.

The $17 billion, however, is only a drop in the proverbial bucket when the federal deficit that's likely to exceed $1.5 trillion this year.

And Republicans quickly pooh-poohed the list, asserting that former President Bush proposed even larger cuts last year -- $1 billion and 30 cuts more, by one accounting.

Trying to shore up support for his climate change proposals, President Obama called three dozen House Democrats into the White House today.

More than a month ago, Representatives Edward Markey of Massachusetts and Henry Waxman of California introduced a sweeping bill that would set strict new limits on greenhouse gases, cutting emissions by 20 percent by 2020 and by 85 percent by 2050.

The bill -- which calls for pollution credits to be given or auctioned off to utilities and businesses -- has stalled because of industry opposition, criticism from Republicans, and concerns from some Democrats over the so-called cap-and-trade system.

While Obama's spending blueprint calls for generating $650 billion by auctioning off the credits and using most of the windfall to help with higher energy prices, some are pushing to give away many of those permits to ease the cost on business.

Republican critics, meanwhile, call cap-and-trade an energy tax that will hurt families and small businesses. House Republicans held their own session on global warming and released a list of at least 31 congressional Democrats either concerned or opposed outright to the proposal.

In all the 100-day polls that gave him generally high marks, President Obama found himself faulted in one area -- not being tough enough on Big Business and Wall Street.

So both for political and budgetary reasons, it makes sense that this morning he unveiled a crackdown on corporate tax loopholes and offshore tax havens -- plus 800 more tax agents to enforce the changes.

Introduced by Treasury Secretary Timothy Geithner, Obama said that while nobody likes paying taxes, most do their duty, but some shirk their responsibility -- "aided and abetted by a broken tax system."

The current tax system rewards US companies for moving jobs to other countries and for moving profits offshore, the president said.

(His full remarks are below.)

His proposal would eliminate some tax deductions for companies that earn profits in countries with low tax rates. It would also make it illegal for US citizens to use tax havens in the Bahamas or Cayman Islands.

The changes, which require congressional approval and would not take effect until 2011, would increase the Treasury's take by about $210 billion over the next decade. They represent only a first step toward an overhaul of international financial regulations Obama has promised.

Though Obama offers to offset the corporate tax change by making permanent a research tax credit, the proposal is likely to face stiff opposition from business groups and their allies in Congress.

Americans for Tax Reform called it a "job killing" tax increase, asserting that US corporate taxes are already the highest among industrial countries and that US companies face double taxation on their profits.

Senator John F. Kerry of Massachusetts, citing his own legislative efforts to close offshore tax shelters, praised Obama's proposals.

“For five years we’ve been pushing to reform the tax code to end deferral and reward companies that create jobs at home not those that hide money offshore,” Kerry, a senior member of the Finance Committee, said in a statement. “I’m glad President Obama is taking action on an issue that has long needed attention and I will work closely with the administration to simplify and reform our international tax system.”

A White House summary of the proposal is below:

President Obama this afternoon praise the House's passage of a bill designed to protect consumers from sudden increases in interest rates and late fees.

The legislation, which House Financial Services Committee chairman Barney Frank of Massachusetts helped shepherd, passed by a bipartisan vote of 357-70.

"Today, under the leadership of Representatives Barney Frank, Carolyn Maloney, and Luis Gutierrez, members of both parties in the House of Representatives came together to protect American consumers, paving the way toward real, meaningful credit card reform," Obama said in a statement.

"While Americans have a responsibility to live within their means and pay what they owe, credit card companies have a responsibility to set rules that are fair and transparent. The principles I have long supported would help ensure that these responsibilities are met: strong and reliable consumer protections; credit card forms and statements that have plain language in plain sight; tools that can help people make an informed choice about what credit card to use; and beefed up monitoring, enforcement, and penalties. And building on what we have achieved today, I will work with Congress in the weeks to come so that I can sign a credit card reform bill into law that upholds these principles and upholds the interests of the American people."

Over in the Democratic-controlled Senate, however, a bill -- which Obama backed but didn't spend a ton of political capital pushing -- to spare hundreds of thousands of homeowners from foreclosure through bankruptcy was defeated.

A dozen Democrats joined Republicans in the 51-45 vote to shelve the legislation.

A Senate panel today begins the hard slog toward an overhaul of immigration policy -- the goal that Congress punted during the Bush administration and the issue that animated the rank-and-file during last year's Republican presidential primaries.

The Senate Judiciary Committee's Subcommittee on Immigration, Border Security and Citizenship will hold a hearing titled, "Comprehensive Immigration Reform in 2009: Can We Do It and How?"

Advocates hope it is the first step to a change that includes a path to citizenship for some of those already in the country illegally.

"For far too long, our state and local governments have been plagued by an out-of-date and broken federal immigration system. Now more than ever, Congress must take the necessary steps to reform our immigration system in a way that honors our laws, rewards honesty and hard work, and fosters economic prosperity," Benjamin Johnson, executive director of the American Immigration Law Foundation, said in a statement.

"The upcoming hearing marks a new day in the conversation on immigration. Rather than dwell on the problems of our broken system, we will hear a discussion that focuses on solutions....This is a discussion that must take place throughout the country because resolution of our immigration crisis will require all sectors of American society to work together to create an immigration system that works for our nation."

The National Council of La Raza, the nation's largest national Hispanic civil rights and advocacy organization, also praised the hearing. “For far too long, we have allowed a bullying minority to block the road to solutions and seed intolerance, yet recent elections have demonstrated that Americans want leaders who will solve tough problems, including immigration,” Janet Murguía, NCLR president and CEO, said in a statement.

The group wants the overhaul to include: Getting the 12 million undocumented people in our country to come forward, obtain legal status, learn English, and assume the rights and responsibilities of citizenship; creating smart enforcement policies that uphold national security; cracking down on unscrupulous employers and take away their incentives for hiring undocumented workers; widening legal channels that reunite families and allow future needed workers to come to the U.S. with the rights and protections that safeguard our workforce and prevent the dramatic increase in deaths along the border; and enacting proactive measures to advance the successful integration of new immigrants into our communities.

Pressed on the issue during his news conference Wednesday night, President Obama confirmed his support for comprehensive reform, but said that his administration must lay the groundwork first -- most notably improving border security so Americans are confident that illegal immigrants won't flood the country.

"We can't continue with a broken immigration system. It's not good for anybody," Obama said. "It's not good for American workers. It's dangerous for Mexican would-be workers who are trying to cross a dangerous border. It is putting a strain on border communities who oftentimes have to deal with a host of undocumented workers, and it keeps those undocumented workers in the shadows, which means they can be exploited at the same time as they're depressing US wages."

He said he expects to convene a working group "to start looking at a framework of how this legislation might be shaped. In the meantime, what we're trying to do is take some core -- some key administrative steps to move the process along to lay the groundwork for legislation, because the American people need some confidence that if we actually put a package together we can execute."

"If the American people don't feel like you can secure the borders, then it's hard to strike a deal that would get people out of the shadows and on a pathway to citizenship who are already here, because the attitude of the average American is going to be, 'Well, you're just going to have hundreds of thousands of more coming in each year.' On the other hand, showing that there's a more thoughtful approach than just raids of a handful of workers -- as opposed to, for example, taking seriously the violations of companies that sometimes are actively recruiting these workers to come in -- that's again, something that we can start doing administratively," Obama continued.

"So what we want to do is to show that we are competent in getting results around immigration, even on the structures that we already have in place, the laws that we already have in place, so that we're building confidence among the American people that we can actually follow through on whatever legislative approach emerges. I see the process moving this first year, and I'm going to be moving it as quickly as I can."

UPDATE: As part of the administrative changes, the Department of Homeland Security issued policies today that put more emphasis on going after employers who knowingly hire illegal immigrants, though it will still continue to arrest illegal workers.

The Bush administration was criticized by advocacy groups after a series of large raids that resulted in the arrests of about 6,000 workers last year.

"This is a good first step in realigning enforcement priorities," the Immigration Policy Center said. "However, DHS's ability to truly focus on abusive employers is limited by the fact that our current immigration system doesn't provide immigrants or legitimate employers the protections and tools they need to comply with the law. Rather than trimming around the edges, real reform must involve an overhaul of the entire system to ensure that enforcement of our immigration laws is effective, fair, and humane."

Congress this afternoon handed President Obama another big victory to mark his 100th day in office by passing a spending blueprint that incorporates many of his major policy goals ahead on healthcare, energy, and other issues.

But the votes on the budget outline belied Obama's plea for bipartisanship.

The Senate voted 53-43 for the spending plan, with no Republican support, after the House voted 233-193 earlier today, again without a single Republican vote.

In his prepared opening statement for tonight's press conference, Obama says the budget "builds on the steps we’ve taken over the last one hundred days to move this economy from recession to recovery and ultimately to prosperity."

Newly-turned Democrat Arlen Specter of Pennsylvania voted "no," as he did earlier this month when it initially passed the Senate. Three other Democrats also voted no: Ben Nelson of Nebraska, Robert Byrd of West Virginia, and Evan Bayh of Indiana.

And, still, Obama's allies declared victory.

"America’s workers applaud Congress for passing President Obama’s budget resolution that is a transformational blueprint for growing the middle class and making the economy work for everyone again," John Sweeney, president of the AFL-CIO, said in a statement.

"Now, more than ever, it is crucial that we build an economy that works for working Americans. President Obama’s budget includes a huge down payment on national healthcare reform, investment in growing green jobs and addressing climate change and more funding for education. The budget also moves away from the failed economic policies of the past and includes tax cuts for middle-class working families, rather than for the wealthy and Big Business. "

“Facing the worst economic crisis in decades, President Obama took the oath of office 100 days ago with a bold agenda to turn our economy around, get Americans back to work and lay a solid foundation for future economic growth and prosperity. And he has done just that. The budget passed today by Congress affirms and supports that vision and addresses the President’s fundamental priorities: halving the deficit over the next four years, providing quality, affordable health care to Americans, improving education investing in the clean energy revolution while reducing our dependence on foreign oil,” added Democratic National Committee chairman Tim Kaine.

Tom McMahon, acting executive director, of the labor-liberal coalition Americans United for Change, said in a statement: “While President Obama inherited a crushing recession and the largest deficit in history, 100 days later the nation is on a clear path to economic recovery paved through the transformational budget Congress passed today. In addition to returning fairness to our tax code and beginning to take control of the federal deficit, the President’s budget recognizes that without fixing our broken health care system, without reducing our dependence on foreign oil, and without investing in tomorrow’s educated workforce, America’s struggling middle-class families will never get ahead. The investments called for in this budget for health care reform, education, and clean energy are essential for long-term economic prosperity. It also remains disappointing that many of the same conservatives members of Congress that enabled the very failed economic policies that got us into this mess once again turned their backs on middle-class families and just said ‘no’ today.”

The bill includes a parliamentary maneuver, which if a healthcare plan isn't passed by Oct. 15, would allow Democrats to push through a plan with a simple majority in the Senate, instead of the 60 votes normally required for such major legislation.

Vice President Biden hit the road today to tout the economic stimulus package's help for weatherization and energy efficiency programs.

He toured Serious Materials Chicago, a window factory that is reopening, responding to increased demand for energy-saving building products. The factory previously housed Republic Windows and Doors, which closed in December, prompting a highly publicized protest by workers against the company and against Bank of America, which had withdrawn its financing despite receiving a taxpayer bailout.

“What I have seen here today at Serious Materials Chicago inspires me and brings to life the real impact the Recovery Act is already having, just in the short time since our work began,” Biden, who was joined by Senators Dick Durbin and Roland Burris, Chicago Mayor Richard Daley, and company CEO Kevin Surace, said in a statement. “Everywhere I go, I am hearing stories just like this one – stories of hard workers filling good jobs, our $8 billion investment in weatherization and energy programs re-opening doors and our tax credits creating new demand for energy-saving materials. This is the story of our new economy - and this is the story of the Recovery Act.”

Under the $787 billion stimulus package, $8 billion is available for state and local weatherization and energy efficiency efforts through the Department of Energy -- $5 billion through the Weatherization Assistance Program and another $3 billion for the State Energy Program.

President Obama uses his weekly Internet and radio address today to try to burnish his spendthrift credentials, promising to rein in federal spending to build a firm foundation for economic recovery.

"All across America, families are tightening their belts and making hard choices," he says. "Now, Washington must show that same sense of responsibility.

Saying it's "time to fundamentally change the way that we do business in Washington," he announced that he supports "pay-as-you go" legislation that would require any new spending or tax cuts to be simultaneously paid for -- a bill that fiscal hawks have been clamoring for since Democrats took control of Congress after the 2006 election.

He also announced a new incentive for departments to cut costs: "Agencies that identify savings will get to keep a portion of those savings to invest in programs that work."

The president also said he will establish a way for every government worker to submit cost-saving ideas, and convene a forum later this year for private businesses to share their innovative reforms.

"We must also recognize that we cannot meet the challenges of today with old habits and stale thinking," he says. "So much of our government was built to deal with different challenges from a different era. Too often, the result is wasteful spending, bloated programs, and inefficient results."

His speech comes as Congress is primed to give final approval next week to a spending blueprint, largely based on Obama's, that would mean annual deficits of $500 billion or more for years to come.

Obama has been criticized for unleashing a flood of budgetary red ink with his $787 billion economic stimulus package, and a subsequent $410 billion spending plan for the rest of this fiscal year.

But he notes, again, that he inherited a record $1.3 trillion deficit this year, and that the stimulus spending was needed to lift the nation out of the worst recession in decades.

"We cannot sustain deficits that mortgage our children’s future, nor tolerate wasteful inefficiency," Obama concludes. "Government has a responsibility to spend the peoples’ money wisely, and to serve the people effectively. I will work every single day that I am President to live up to that responsibility, and to transform our government so that is held to a higher standard of performance on behalf of the American people."

Saying he feels their pain, President Obama today reached out to families struggling to pay college bills, highlighting his plan to revamp student loan programs to cut out private middlemen.

Obama wants to end the private Federal Family Education Loans program that the White House says costs taxpayers an unnecessary $5 billion a year by using private firms as brokers.

"That is a premium we can no longer afford," he said, saying the system is "rigged" to give profits to "special interests" without any risk.

He told reporters that "wasteful subsidies" are worsening the paradox facing the country: a college education is more important than ever, but the cost of attending is also higher than ever.

"The stakes could not be higher," he said.

Obama said he wants to boost the percentage of Americans attending college to the world's highest again, and a key part of that is reforming the student loan system.

He acknowledged that private loan companies vehemently oppose the change. "They are gearing up for battle," he said. "So am I."

(His full remarks are below, along with a White House summary of his proposal.)

The private student loan industry has also been beset by allegations of kickbacks to college officials to steer students to the loans. Investigations by Congress and New York Attorney General Andrew Cuomo found that some lenders had secret deals to give colleges or their staffs consulting fees, company shares, and other perks.

A working federal budget deal would end President Obama's $400 middle-class tax cut after next year, but would make it easier to pass a healthcare overhaul, according to press reports.

Senate Majority Leader Harry Reid and congressional aides are telling the Associated Press and Bloomberg News today that the tentative agreement to use a parliamentary procedure, known as reconciliation, that would allow the healthcare plan to pass with a simple majority vote, rather than the 60 votes needed to overcome a Republican filibuster.

The decision is sure to anger Republicans, who oppose many of Obama's health proposals, but it makes it much more likely that a sweeping plan will pass.

Democrats do not plan to use the tactic on another controversial proposal -- so-called cap-and-trade legislation to cut carbon emissions.

Negotiators for the House and Senate, both controlled by Democrats, are pulling together a compromise from the slightly different versions of the $3.6 trillion spending blueprint that each chamber passed and that both preserved most of Obama's agenda.

Former Vice President Al Gore, who won a Nobel prize for his crusade on climate change, gave his stamp of approval today to House Democrats' bill to tackle global warming.

He is testifying before a House committee holding hearings this week on a bill introduced by Representatives Edward Markey of Massachusetts and Henry Waxman of California.

Gore urged lawmakers to overcome partisan differences and take action to reduce greenhouse gases, calling the climate issue the most important ever before Congress.

"We are, along with the rest of humanity, facing the dire and growing threat of the climate crisis," he testified, according to the Associated Press. Gore argued that Congress must act to "restore America's leadership of the world and begin, at long last, to solve the climate crisis."

The legislation would seek to cut carbon emissions by 20 percent by 2020 and by 85 percent by 2050 and also create a renewable energy standard that requires wind, solar, and other renewable sources to meet 25 percent of US energy needs by 2025. One of its most controversial components is to establish a cap-and-trade system to push utilities and industry polluters to meet those goals.

The Obama administration supports many aspects of the bill, but told the committee this week that it wants to work with Congress to fine tune it. Republicans and some Democrats say the legislation would cause dramatically higher energy prices.

Industry leaders warned in testimony yesterday that consumers would be hit with higher prices if the measure does not give electric utilities allowances to emit greenhouse gases.

Larry Summers, President Obama's top economic adviser, is catching some flak for appearing snoozy at a White House meeting today.

As Obama spoke after a private meeting with credit card industry executives, Summers appeared to doze off, closing his eyes, supporting his face with his fist at one point, and wiping his face at another. There are items with photos here and here.

The former Harvard president has been putting in long hours, of course, trying to help Obama find ways to resuscitate the economy.

President Obama waded back in today into the issue of credit cards, which would seem to be a political winner but which the industry warns could backfire in the tattered economy.

He met privately with leaders of the credit card industry, pushing to cut costs for consumers and rein in practices that squeeze people into paying much higher fees or interest rates than anticipated.

After the private session, Obama told reporters that as the administration tries to free up credit and prevent a similar economic crisis, the credit card industry needs to become "more stable, more effective, more consumer-friendly."

"We want to preserve the credit card industry,but we also want to do away with abuses," he said, pausing, then declining to even characterize the "discussion" with the executives.

Those include interest rates being jacked up, undisclosed fees being imposed, and consumers not getting enough information, he said.

He said he delivered a message to the industry leaders: "There's going to be action in Congress. Our administration is going to be pushing for reform."

Any reform, he said, should include measures to stop the abuses and more accountability. (Read the White House rundown on the principles below.)

Both the House and Senate are considering a credit card "bill of rights" to limit the ability of credit-card companies to raise interest rates and fees and to require greater disclosure. The House Financial Services Committee, led by Representative Barney Frank of Massachusetts, approved its version on Wednesday.

But the banking industry is warning that the push for legislation could make even less credit available during the economic crisis.

"President Obama has been a strong proponent of cleaning up the practices of the credit card industry since he was a Senator and he called for measures to strengthen consumer protection in the credit card market during the campaign," the White House said.

It also released a list of attendees: Treasury Secretary Timothy Geithner, economic advisers Larry Summers and Christina Romer, policy adviser Valerie Jarrett; David Bohne, President, USAA Savings Bank, USAA; Patrick Burke, Senior Vice President and Chief Operations Officer, HSBC Card and Retail Services; Paul Galant, CEO, N.A. Cards, Citi; Pamela Joseph, Vice Chairman, Payments, US Bancorp; Christopher McWilton, President, US Markets, MasterCard Worldwide; David Nelms, CEO, Discover Financial Services; Kevin Rhein, Division President, Wells Fargo Card Services and Consumer Lending, Wells Fargo and Company; Ryan Schneider, President of Cards, Capital One Financial Corporation; Lawrence Sharnak, Executive Vice President and General Manager, Consumer Cards, American Express; William Sheedy, Global Head of Strategy, VISA U.S.A., Inc.; Gordon Smith, CEO, Chase Card Services, JPMorgan Chase & Co.; Richard Struthers, President, Global Card Services, Bank of America; Lloyd Wirshba, Chief Executive Officer, Barclaycard US; and Edward L. Yingling, American Bankers Association.

With President Obama primed to hit 100 days in office on Wednesday, Democrats and their allies are already seeking to crow about accomplishments -- and assail the Republican opposition as obstructionists.

The Democratic National Committee released a web video that says Republicans have delivered "100 days of no."

As each date appears on screen, one Republican leader after another is shown speaking against Obama and Democrats on various economic and other bills. At one point, Republican members of Congress are shown on the steps of Capitol Hill in unified opposition.

“Unfortunately, instead of joining President Obama in forging a new foundation for change, the Republicans have openly employed the same obstructionist, just-say-no approach that helped create the problems we currently face,” DNC spokesman Brad Woodhouse said in a statement. “As long as Republicans continue to rely on Dick Cheney, Karl Rove, and Rush Limbaugh for their inspiration, Americans can only expect more of the same recycled Republican talking points and baseless criticisms from the party of no new ideas and no new leadership.”

A TV ad being unveiled this afternoon by the American Federation of State, County, and Municipal Employees and Americans United for Change takes a somewhat more positive tack.

The spot, which is to appear starting Friday on national cable outlets, lists Obama's priorities passed by Congress and signed into law -- an expansion of health insurance for children, an equal pay law for women, the $787 billion economic stimulus package -- while noting that most Republicans opposed them.

"There have always been those who said no to progress," the narrator concludes. "But in times of crisis, Americans have never taken no for an answer."

UPDATE: House GOP leaders, meanwhile, sent a letter today to Obama complaining about their Democratic counterparts. Obama and Vice President Biden are scheduled to meet this afternoon with congressional leaders of both parties.

"Democratic leaders in Congress have so far ignored your call for a new era of bipartisanship in Washington -- however, the next 100 days can be different," the Republicans wrote. "We know that by working together, we can face our challenges and renew our nation, and we respectfully request that our meeting tomorrow serve as the beginning of a meaningful bipartisan conversation about the challenges we face."

Marking Earth Day, President Obama declared today that moving toward renewable energy is essential to America's prosperity and announced that his administration will for the first time lease federal waters for projects to generate electricity from wind as well as from ocean currents and other renewable sources.

"On this Earth Day, it is time for us to lay a new foundation for economic growth by beginning a new era of energy exploration in America," he said.

"The choice we face is not between saving our environment and saving our economy -- the choice we face is between prosperity and decline," he added. "We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy. We can allow climate change to wreak unnatural havoc across the landscape, or we can create jobs working to prevent its worst effects....The nation that leads the world in creating new energy sources will be the nation that leads the 21st century global economy.

"America can be that nation. America must be that nation. And while we seek new forms of fuel to power our homes and cars and businesses, we will rely on the same ingenuity -- the same American spirit -- that has always been a part of our American story," he said after touring a $21 million wind turbine tower plant in Newton, Iowa, which last year took over the site of a Maytag appliance plant closed in 2007, costing the small city hundreds of jobs.

Obama said that opening federal waters "will open the door to major investments in offshore clean energy," including projects off the coasts of New Jersey and Delaware.

He said wind energy could generate as much as 20 percent of our electricity by 2030, creating as many as 250,000 jobs. (Read Obama's full remarks below.)

Now, wind-generated power totals less than 2 percent of all electricity generated, and other renewable sources another 1 percent.

UPDATE: Later today, the Interior Department issued long-awaited regulations governing such offshore renewable energy projects and how leases will be issued. The rules put in place revenue sharing with nearby coastal states that will receive 27.5 percent of the royalties that will be generated from the electricity production, the Associated Press reports.

Interior Secretary Ken Salazar told the AP that applications are expected for dozens of proposed offshore wind projects, many off the north and central Atlantic in the coming months, and that he expects the first electricity production from some of the offshore projects in two or three years, probably off the Atlantic Coast.

“These rules will unleash a wave of American clean energy development,” Representative Edward Markey of Massachusetts, who is co-author of energy legislation that includes ambitious targets for renewable energy, said in a statement. “Looking beyond our shores, to the winds, tides and waves for discoveries should not be the solitary providence of explorers, but for clean energy entrepreneurs who will chart the course to America’s energy independence.”

Obama's $3.6 trillion budget for next fiscal year that Congress is hashing out calls for $15 billion each year for ten years to develop clean energy including wind power, solar power, geothermal energy, and clean coal technology.

In his official Earth Day proclamation, Obama also stressed the need for action on global warming, as well as preserving America's natural resources. (To read the proclamation, click here.)

Vice President Joe Biden, meanwhile, announced $300 million in funding today from the stimulus package for state and local governments, and transit authorities to expand their fleets of clean, sustainable vehicles.

“For city and state governments across this country, every day is Earth Day thanks to the ambitious commitments they are making to green their vehicles and transit systems. Now it’s time for Washington to help them deliver on those promises,” Biden said in a statement. “From advanced battery cars to hybrid-electric city buses, we’re going put Recovery Act dollars to work deploying cleaner, greener vehicles in cities and towns across the nation that will cut costs, reduce pollution and create the jobs that will drive our economic recovery.”

Setting the stage for Obama's trip, his Energy Secretary Steven Chu and Labor Secretary Hilda Solis sought to spread the word in an op-ed piece published in a half-dozen regional newspapers.

"This focus on jump-starting the creation of an American clean energy sector will be the foundation of the president’s energy policy," they wrote. "With the depletion of the world’s oil reserves and the growing disruption of our climate, the development of clean, renewable sources of energy is the growth industry of the 21st century.

"As part of this comprehensive policy, we must crack down on the corporations that pollute the water we drink and the air we breathe," they added. "Cracking down on these polluters in a real way will mean that we can finally tackle global warming and its potentially catastrophic effects – because ultimately, our approach to energy policy and combating the effects of global warming are two sides of the same coin."

The full op-ed -- which appeared in the Austin American-Statesman, Buffalo News, Denver Post, Montgomery Advertiser, Omaha World Herald, and Pittsburgh Post-Gazette -- is below:

Senator John F. Kerry, opening a hearing on global warming on Earth Day, says this is a "make-or-break" year on the issue and calls on the United States to spearhead the effort.

Covening the Senate Foreign Relations Committee, the Massachusetts Democrat notes that a key international conference on climate change is later this year in Copenhagen, Denmark.

"The clock is ticking on the best chance the countries of the world will have to marshal an effective global response," he said in his prepared opening remarks.

"All policymakers involved in this process need to realize that if we aim too low, America and the global community will fail to do what is necessary to meet this challenge. It’s that simple."

He added, "We here in Washington must realize that the world is taking its cues from us. In my meetings over the past several months with environment ministers from Germany to China to Bangladesh, I have been struck by the extent to which the eyes of the world are focused on the U.S. Congress and our domestic policy process. Without a clear signal from Congress on the scope, format and ambition of our domestic program, our negotiators will lack the leverage to secure the participation of all the major contributors to climate change. Ultimately, the strength of our domestic policy will be a critical factor in galvanizing the world to enter into a global agreement."

Kerry also asserts that the crucial debate will revolve on what steps the United States takes -- and what is required of China, which passed the US inb 2007 as the largest carbon emitter.

"While China is implementing policies to address its energy use – in some cases more ambitious than our own– their emissions trajectory continues to pose a grave risk to the global climate," he said. "We have to find a way to reconcile two imperatives: on one hand, China requires a treaty that gives it room to develop; on the other hand, unless we can convince the world’s most populous nation to pursue a sustainable, low-carbon development path, we cannot hope to solve climate change. These two constraints define the scope and structure of any viable agreement."

Kerry's full prepared statement is below:

Leading Democrats are touting an Environmental Protection Agency preliminary analysis of their sweeping climate change bill, saying that the study shows that the legislation would succeed in “moving the U.S. to a clean energy economy.”

The analysis also found that the bill's proposed cap on carbon emissions would accelerate the use of alternative energy by 150 percent over the next two decades, and that energy efficiency measures will significantly decrease energy demand. The draft bill calls for a reduction of greenhouse gases by 20 percent from 2005 levels by 2020, and 83 percent by mid-century.

The EPA analysis was requested by the bill's co-authors, Representatives Edward Markey of Massachusetts and Henry Waxman of California.

"This analysis confirms that the Waxman-Markey legislation will create a clean energy economy that will continue economic growth and cut harmful pollution," Markey said in a statement today. "When you combine this analysis with cost-saving measures from updated energy efficiency measures and weatherization, the savings will pile up for consumers."

But Republicans argue that the carbon cap would dramatically increase energy costs for consumers.

Members of the Energy and Commerce Committee said the panel's Democratic leaders are moving too quickly to try to push the legislation through and that the draft bill, which calls for broad limits on carbon dioxide and other greenhouse gas emissions, was not ready for serious discussion because it doesn't say how emission permits would be distributed, the Associated Press reports.

"The manner in which you will address this issue is the cornerstone of the legislation," the 23 GOP committee members wrote in a letter to Waxman. "Without it, the bill is simply not finished and not ripe to be marked up or accurately discussed in the context of hearings."

House Speaker Nancy Pelosi, however, said she's determined to pass legislation addressing climate change this year.

Noting that Wednesday is Earth Day, she told reporters taht when the next Earth Day comes around "we want to celebrate what we've done this year" to address climate change and shift the nation toward greater use of clean energy.

Rejoining the battle over President Obama's $3.6 trillion budget, Democrats are stressing another line of attack -- that Republican foes, besides not offering a real alternative, are being hypocrites.

In a new web video, the Democratic National Committee says that while the two top House Republicans -- John Boehner of Ohio and Eric Cantor of Virginia -- are accusing Obama and the Democrats of so much deficit spending that it threatens to bankrupt the country, they both voted for President Bush's budgets that vastly increased the national debt.

“Over eight years, Republicans nearly doubled the national debt,” it says on screen. “John Boehner and Eric Cantor were with Bush every step of the way. Now, Washington Republicans want you to forget what they did.”

"From the Party of No to the Party of Hypocrites?" the video ends.

Responded Antonia Ferrier, a spokesperson for Boehner: "We missed the part of the video where they defend their massive, fiscally-irresponsible budget that will double the debt in five years and triple it in 10. When the President's Budget Director concedes they are raising the deficit to unsustainable levels, I guess they have to do everything they can to blame everyone else."

"As we close in on President Obama's first 100 days, I would ask Virginia's Governor Tim Kaine if his partisan attack ads and disinformation campaigns are a calculated rejection of the President's attempts to change Washington,” added Brad Dayspring, a spokesman for Cantor.

Before leaving on their Easter recess early this month, the House and Senate each passed different versions of the spending blueprint that largely preserved Obama's priorities on healthcare, education, and energy. The leaders of the Democratic-controlled chambers are expected today to name members of a conference committee that will iron out a compromise version.

He didn't exactly come bearing gifts as he convened the first full Cabinet meeting of his administration.

Instead, President Obama told his cabinet secretaries (all but Kathleen Sebelius, not yet confirmed at health and human services) that they must join in the penny-pinching that many American families are trying to make ends meet with a goal of slicing $100 million from the federal budget in the next three months.

Obama said because of the economic crisis, his administration has had to spend gargantuan sums of money, including the $787 billion stimulus plan.

"However, moving forward we have an obligation to make sure this government is as efficient as possible" and to make sure no taxpayers money is being wasted to close any "confidence gap" the public has, he said.

He cited the sweeping cuts that Defense Secretary Robert M. Gates proposed earlier this month, along with other trims. But he said more savings are needed and pledged that 100 unnecessary programs will be ended.

Obama also told reporters after the meeting that he is "extraordinary proud of the talent, diversity, and work ethic" of his team, which he said faced historic challenges in the first three months.

But the total savings is largely symbolic and a proverbial drop in the bucket -- far less than 1 percent of the $192 billion federal deficit just for March.

Obama's $3.6 trillion budget for the fiscal year that starts Oct. 1 has been savaged, by some Democrats as well as Republicans, because it would mean a projected $9.3 trillion in deficits over the next decade.

The White House released a list of cost-cutting measures that agencies have already made, but many of them would be over several years. They include eliminating the job of education policy attaché at the US mission to UNESCO in Paris and closing the office to save $713,000 a year; no longer creating new seals and logos for Homeland Security programs, for which consultants were paid $3 million since 2003; and converting publication of judicial forfeiture notices from newspapers to the Internet, a change expected to save $6.7 million over the first five years.

Obama critics are ridiculing the savings.

"First the President wanted nobody watching him spend trillions of dollars - now he wants everyone watching him cut a tiny fraction," said the conservative-leaning Americans for Tax Reform.

"The British have an old saying: Penny-Wise, Pound-Foolish. This is taking this saying to new levels - not Pound-Foolish, but trillion dollar foolish."

The Heritage Foundation put out a graphic showing the $100 million goal as a tiny dot in comparison to the stimulus package and the additional $410 billion budget approved for the remainder of this fiscal year.

Asked whether the savings were a mere "drop in the bucket," Obama replied, "It is, and that's what I just said."

"None of these things alone are going to make a difference," he said, according to the press pool report. "But cumulatively that make an extraordinary difference because they start to set a new tone. And so what we're gonna do line by line and page by page, $100 million here, $100 million there, pretty soon even in Washington, it adds up to real money."

His full remarks are below, as is the full White House list is below:

Democrats, having succeeded in pushing through President Obama's sweeping budget blueprint Thursday night, are seizing on the new job loss numbers to suggest that more needs to be done to turn the economy around.

But after setting the stage for bruising battles on healthcare and alternative energy by passing the $3.5 trillion outlines, and after already passing the $787 billion stimulus plan, there's no consensus on what to do next. And Congress is about to start a two-week recess, leaving a leadership vacuum in Washington unless the leadership calls the rank-and-file back into session.

The US economy lost another 663,000 jobs last month -- raising the total this year to 2 million -- and the unemployment rate jumped to 8.5 percent, the highest since late 1983, the Labor Department said.

“Month after month, America’s working families have been bearing a heavier and heavier brunt of this recession, and now, even more families need our help," Senator Edward M. Kennedy, chairman of the Senate Committee on Health, Education, Labor, and Pensions, said in a statement. "Our first priority in Congress is to do what’s required to create jobs and lend a real helping hand to as many struggling citizens and their families as possible. We’re firm in our resolve to meet these challenges and restore prosperity for all Americans.”

UPDATE: In a joint news conference with German leader Angela Merkel, Obama noted the jobs numbers and asserted that the G-20 agreement will aid the recovery, though there is no guarantee that more steps won't be needed.

"None of us can isolate ourselves from the global market," Obama said. "If we don't have concerted action, we will have collective failure."

The budget resolutions passed on party-line votes in the Democratic-controlled chambers. When they return from recess, House and Senate negotiators will have to reconcile the different versions, which both incorporate much of Obama's agenda.

“The sobering news today that 663,000 more Americans received pink slips last month signals that the economy is in even worse shape than we thought," Tom McMahon, acting executive director of Americans United for Change, a pro-Obama liberal-labor coalition, said in a statement. "President Obama inherited the nation’s worst economic crisis in generations and the thousands of Americans continuing to lose their jobs each day underscores the urgent to need for Congress preserve his transformational budget plan - a blueprint for rebuilding and renewing America’s economy and creating jobs - as it moves toward final passage.”

“The unemployment line is grower longer and longer every day. There could not be a worse time for the same old partisan games in Washington when so many people are losing their healthcare, their livelihood and dignity. We don’t need politics as usual; we need bold solutions from our leaders.”

AFL-CIO President John Sweeney raised the possibility of a second stimulus package.

"We need to get our economy back on track, create good paying jobs, and restore balance to the fundamental building blocks of our economy," he said in a statement. "President Obama’s budget is an important first step that includes a serious down payment on national healthcare reform, investments in growing green jobs and addressing climate change, essential funding for education and other programs that are crucial for working families.

"But we also must make broad-based economic changes to have sustained economic growth and an economy that works for everyone," he added. "At the G20 meeting President Obama attempted to get world leaders to be more aggressive in addressing their economic problems to make the United States’ stimulus package more effective. It was a successful meeting in many ways but in order to counter what is a global recession world leaders will need to do more and the United States may well need to pass a second stimulus package."

This evening, the US House approved its $3.6 trillion budget outline, largely in line with President Obama's ambitious blueprint on healthcare, alternative energy, education and more -- after defeating a Republican alternative that slashed spending and taxes.

The vote in the Democratic-controlled House was 233-196, along party lines.

Obama called the passage "another step toward rebuilding our struggling economy.

"This budget resolution embraces our most fundamental priorities: an energy plan that will end our dependence on foreign oil and spur a new clean energy economy; an education system that will ensure our children will be able to compete in the economy of the 21st century; and health care reform that finally confronts the back-breaking costs plaguing families, businesses and government alike. And by making hard choices and challenging the old ways of doing business, we will cut in half the budget deficit we inherited within four years. With this vote comes an obligation to pursue our efforts to go through the budget line-by-line, searching for additional savings. Like the families we serve, we must cut the things we don't need to invest in those we do,” he said in a statement.

Democratic National Committee chairman Tim Kaine congratulated House Democrats for passing a very close cousin to the president's budget -- "a plan to help turn our economy around by slashing the deficit in half, making health care more affordable, reducing our dependence on foreign oil and investing in education. This vote today is a victory not only for this generation of Americans, but generations to come."

"Unfortunately, the unanimous vote by the House Republicans against the budget does not represent the principle of loyal opposition upon which this country was founded, but opposition purely for political gain," Kaine said in a statement. "While Republicans continue to cling to the failed policies of the past that created the current economic crisis, President Obama and Democrats have taken bold steps to restore stability and prosperity for all Americans. Today's vote affirms that the Party of No is more interested in playing politics than working with the Democrats and the President to solve our nation's problems on a bipartisan basis."

Later tonight, the Senate is expected to pass its modified version of Obama's $3.6 trillion blueprint.

The two Maine moderates, Senators Susan Collins and Olympia Snowe, provided key votes to pass Obama's stimulus package in February. And today, they reprised their role in rejecting an alternative to Obama's budget proposed by his Republican presidential rival, John McCain.

The Senate voted 60-38 to kill McCain's plan, which would have capped domestic spending and eliminated the income tax increases on people earning more than $200,000 and couples making more than $250,000 by letting Bush tax cuts expire. One other Republican and every Democrat present voted against McCain's plan.

The McCain amendment was one of the last major hurdles to passage tonight.

President Obama had reason to smile at his news conference today at the close of the G-20 economic summit.

After all the hype over dissension between Europe and America, the meeting of the world's leading economies produced a wide-ranging deal that includes some more stimulus -- though not nearly as much as the United States sought -- and more regulations wanted by Europe.

Obama said the agreement will mark a "turning point in the pursuit of global economic recovery," calling it an unprecedented package of coordinated actions and contrasting it to the delayed response to the Great Depression and the 1980s recession.

"Today, we've learned the lessons of history," the president said. "I know that in the days leading up to this summit, some confused honest and open debate with irreconcilable differences. But after weeks of preparation, and two days of careful negotiation, we have agreed upon a series of unprecedented steps to restore growth and prevent a crisis like this from happening again."

He added, "In an age when our economies are linked more closely than ever before, the whole world has been touched by this devastating downturn. And today, the world’s leaders have responded today with an unprecedented set of comprehensive and coordinated actions.".

Still, he said the crisis is causing real pain around the world for people losing homes, jobs, and the chance to go to college. He noted that new jobless numbers out today in the United States are the highest in a quarter-century.

Asked what out of the summit would directly help struggling Americans, Obama said that the US economy is inextricably linked with the rest of the world, particularly when it comes to exports. "We've got to make sure the global economy as a whole is successful," he said.

Obama said the leaders made significant progress in stimulating the world economy, reforming financial regulations, increasing transparency, and protecting the poor and voiceless He announced he would work with Congress on $448 million in aid. To see details on the aid, click here and here.

But Obama also said that the agreement is only a first step, and more steps might be needed. The G-20 will meet again in the fall and monitor progress, he said. (Read Obama's remarks and the subsequent transcript.)

The leaders pledged an additional $1 trillion to restore credit, growth, and jobs; agreed to renounce protectionism and pledged $250 billion in trade finance over the next two years; and outlined new measures, including a crackdown on tax havens and hedge funds and new rules on linking executive pay to performance.

French President Nicolas Sarkozy, who said he would not sign the final communique if it did not include enough progress on stricter financial regulation -- the diplomatic equivalent of walking out on the summit -- told reporters that the agreement represents "great progress."

German Chancellor Angela Merkel, who had expressed similar concerns that lack of regulation had led to the financial crisis, said the agreement was "a very, very good, almost historic compromise" that will create a "clearer financial market architecture."

In his press conference, the summit's host, Prime Minister Gordon Brown, bragged about unprecedented progress, according to the Associated Press.

"Today the largest countries of the world have agreed on a global plan for economic recovery and reform," Brown said. "For the first time we have a common approach to cleaning up banks around the world to restructuring of the world financial system. We have maintained our commitment to help the world's poorest. This is a collective action of people around the world working at their best."

The political war over global warming legislation is getting louder on Capitol Hill.

Just two days after leading House Democrats, including Representative Edward Markey of Massachusetts, unveiled a climate change bill that will be the starting point for debate, the staff of Markey's committee issued a response today to what it called the "inevitable attacks from entrenched special interests and obstructionist Republicans."

"And just as they did in last year’s fight over energy policy--when they made countless false statements, like no oil was spilled during Hurricane Katrina--they are now spreading misinformation about clean energy legislation," said the staff of the Select Committee on Energy Independence and Global Warming.

"The Republican campaign to kill clean energy legislation uses the names of respected organizations like the Congressional Budget Office and the Massachusetts Institute of Technology, and then distorts their trusted analyses. It takes the gloom and doom predictions from Big Oil and their hired consultants like Charles River Associates to prey on fears of hard-working Americans over the future of our economy."

(The full staff report is below.)

One particular issue is Republicans' assertion that a cap-and-trade system on greenhouse gases would mean a "light switch tax" on consumers because utilities would pass on the cost of buying emissions credits to households.

That is disputed by John Reilly, an energy, environmental and agricultural economist at MIT and one of the authors of the report cited by the House Republicans, according to Politifact, an independent fact-checking group.

"It's just wrong," Reilly said. "It's wrong in so many ways it's hard to begin."

He goes on to explain that while cap-and-trade might increase the price of carbon-based fuels, it would also lower consumer costs through increased energy conservation and more availability of alternative fuels.

With President Obama across the pond trying to unify the worldwide response to the economic crisis, his cabinet is hitting the road today to trumpet the benefits of the economic stimulus package he championed back home.

Vice President Biden and Agriculture Secretary Tom Vilsack traveled to North Carolina to highlight the Recovery Act's help to rural America. In Faison, they visited the Goshen Medical Center, a rural health clinic.

The medical center is getting $635,876 in stimulus money, enough to add seven jobs and treat 4,800 more patients, including 1,500 with no health insurance, the White House said.

“Community health centers are at the heart of many of our rural communities,” Biden said. “Sometimes, these clinics are the only health facilities for miles and miles. The Recovery Act’s investment is crucial meeting the health and medical needs of millions of Americans.”

(Biden's full remarks are below.)

In Pikeville, Biden and Vilsack stopped by the rural fire department’s main station, which is using stimulus cash to build a new firehouse big enough for ladder trucks. They also announced that the Agriculture department has begun disbursing the first installment of $10 billion in guaranteed housing loans.

About $1.76 billion will help 15,000 rural families and create or save approximately 7,500 jobs, the White House said. Once all the Recovery Act funding for rural housing is released ($7 billion directly to states and $3 billion held in reserve for higher need areas), the White House says that 42,500 jobs will be created or saved.

Kennedy and Kerry said that $37.2 million of the housing loan money will come to Massachusetts to help low-income individuals or households build, repair, renovate, or relocate a home, or to purchase and prepare sites.

“At this time of economic crisis, these funds could not come to Massachusetts at a more critical time. These guaranteed loans will allow Massachusetts citizens in hard hit, rural areas the opportunity to get back on their feet,” Kennedy said in a statement.

Meanwhile, Education Secretary Arne Duncan visited Doswell E. Brooks Elementary School in Capitol Heights, Md., to announce the first $44 billion for schools from the $787 billion stimulus bill.

The White House says that Maryland Governor Martin O'Malley and other state and local leaders will join Duncan on a tour of the award-winning school. It is part of the Prince George's County school district, the nation's 18th largest, which plans to use stimulus funds to avoid furloughs, layoffs, increases in class sizes, and other education program cuts.

Also starting this week, most employees will see a little extra in their paychecks as the $400-per-worker, $800-per-couple tax cut kicks in.

UPDATE: Senators John F. Kerry and Edward M. Kennedy said this afternoon that the tax credit means $1.2 billion for 2.4 million working families in Massachusetts.

“Working families struggling to make ends meet will soon have more money in their pockets,” Kerry said in a statement.

“Hard-working families across our Commonwealth are struggling to make ends meet,” Kennedy added. “This tax credit will bring them some relief over the next two years. President Obama was right to make it a big part of his economic recovery plan for the nation.”

The battle over President Obama's budget is intensifying today with his grassroots army descending on Washington and congressional Republicans holding an event of their own.

In an unusual move, House and Senate Republicans joined together to unveil an alternative to Obama's $3.6 trillion blueprint, which they say will drive the economy further into the ditch and possibly bankrupt the country.

This time, Representative Paul Ryan, the top Republican on the House Budget Committee, took the wraps off an alternative that includes details and numbers. Democrats and the White House mocked the GOP when last week it produced a 19-page outline that was rather vague and had few numbers.

UPDATE: The GOP alternative calls for freezing non-defense discretionary spending for five years, for more tax cuts, and for starting to make changes to entitlement programs such as Social Security.

The plan would rescind the $787 billion stimulus plan next year, except for unemployment spending, and also rescind the additional money in the $410 billion spending plan Congress passed. It also rejects a cap-and-trade policy to cut greenhouse gases and move the country toward alternative energy, instead calling for more domestic oil and gas drilling.

With Democrats in control of both the House and Senate, the Republicans' plan will likely go nowhere. Democrats are already dismissing it. White House economic adviser Austan Goolsbee said on MSNBC that it's appropriate that the plan was unveiled on April 1 because "this is the biggest April Fool's joke in history."

Senator Judd Gregg -- the New Hampshire Republican who was once Obama's nominee for commerce secretary but is now one of his most vocal critics -- said the GOP alternative is no joke, but a serious attempt to trim back the federal deficits.

He said on MSNBC that under the deficits projected under Obama's budget, the United States would not qualify for European Union membership.

Gregg also said that Republicans are offering a series of amendments in the Senate.

But the alternative is a political document, a way for Republicans to assault the economic policies of Obama and the Democrats.

"America is in the midst of a fiscal and an economic crisis. And, yes, the president did inherit this fiscal crisis. But the question is, is he fixing it or is he making it worse?" Ryan said at a news conference this morning.

"We believe that the president's budget, which comes to the floor of the House of Representatives today, makes our fiscal crisis much, much worse," Ryan said.

"Rather than getting spending under control, it sends spending out of control. Rather than keeping taxes low to create jobs, it chases ever higher spending with ever higher taxes and results in ever higher debt; not just a modest increase in our national debt, but an unprecedented, unsustainable increase in red ink," he said. "The president's budget is little more than a thinly veiled attempt by Washington to spend its way into prosperity, tax its way into tax relief, and borrow its way into debt reduction. This simply cannot work."

Democrats held a news conference in response, telling reporters that they remain united behind their tweaked version of Obama's budget, which they say will help rebuild the economy.

They also said the Republican alternative is not realistic.

"Going down the list, it gets to the point where even the Republicans, for the most part, will find it hard to live with something like this," said Representative John Spratt, chairman of the House Budget Committee. "I find it -- I find it very improbable that this can be put together in anything that would really have enough appeal to carry ever in the House or elsewhere on the Hill in either party, but that's what they will be leading with today."

Democratic National Committee Chairman Tim Kaine added his disdain.

“The House GOP budget would be just an April Fool’s day joke if it didn’t actually reflect the true priorities of House Republicans and what they would do if they had the votes in Congress to pass their own plan. Their budget relies on the failed economic policies that drove the U.S. economy into its deepest spiral in decades," he said in a statement.

“If House Republicans had their way and the budget they outlined today were adopted, President Obama’s economic recovery program, which is already saving and creating jobs throughout the country, would be gutted, Medicare as we know it would all but be all but eliminated, Social Security checks would be slashed and a proposed spending freeze on discretionary programs would cut essential services – from health care and support for veterans to education to job training - that Americans most depend on when the economy is in crisis."

Americans United for Change, one of the major labor-liberal groups backing Obama, lambasted the GOP budget.

“The Republican ‘alternative’ to the President’s budget aims to rewind and redo the same failed economic policies from the Bush-era that got us into this economic mess to begin with," the group's acting executive director, Tom McMahon, said in a statement. "House Republicans have come forward on April Fool’s Day with a budget that in all seriousness cuts new money from programs benefiting cops, teachers, and veterans so they can pay for more tax cuts for multi-millionaires and corporations that outsource American jobs. They could not have offered a more counterproductive, unstimulative “alternative” to the investments in healthcare, education, and clean energy the President is proposing – investments that will do far more to lay a solid foundation for growing the economy and creating jobs than tax breaks for millionaires ever have.”

Meanwhile, Organizing for America, the post-election Obama grassroots group, is dispatching dozens of volunteers today to the Democratic National Committee to deliver 642,000 pledges of support for the president's budget. The group is also urging supporters to call Congress.

And a new pro-Obama advocacy group has ads today in the Politico and Hill newspapers urging support for his budget, which sets ambitious goals on alternative energy, healthcare, and education.

"For the first time in years, we have an honest, fair and transparent blueprint to extend opportunity and security for families in all walks of life by expanding healthcare coverage, making college more affordable, developing clean sources of energy that reduce global warming and create good paying jobs to rebuild our middle class," says the ad placed by the Rebuild and Renew America Now coalition. "We believe these steps will set our nation on a responsible path -- making long-term investments in our nation's future while gradually reducing the deficit."

Some TV occupants of the White House are getting in the middle of the high-stakes fight over a bill that would make it easier for unions to organize.

Today, actors from "The West Wing" will join workers and members of Congress to unveil a new ad and grassroots campaign called “Faces of the Employee Free Choice Act."

Then, the actors -- Martin Sheen, Bradley Whitford, and Richard Schiff -- will join in lobbying on Capitol Hill for the legislation, according to the labor coalitions pushing it.

UPDATE: "It's a human rights issue," Sheen, who played president Josiah Bartlet, said, according to the Associated Press. "It's just bottom line fair that workers should be paid for their labor fairly."

Whitford, a union member and board member of the pro-labor group American Rights at Work, said he was behind the event. "I call this process celebrity lubrication," Whitford joked to reporters.

The pro-business Workforce Fairness Institute responded with this missive: “Today’s event on Capitol Hill with actors who played fictional political powerbrokers addressing a fictional problem is like a work of fiction that would be better suited for a comedy if their proposed ‘solution’ wasn’t so devastating to our nation’s economy,” said Katie Packer, executive director of the Workforce Fairness Institute. “Job creators don’t need policy prescriptions from out-of-touch, Hollywood elite who want to drive up costs and encourage a hostile takeover of American small businesses.”

By Lisa Wangsness, Globe Staff

WASHINGTON -- House Democrats today are unveiling their climate change legislation, a bill that would seek to cut carbon emissions by 20 percent by 2020 and by 85 percent by 2050.

The bill would also establish a cap-and-trade system to push utilities and industry polluters to meet those goals, according to a document obtained by the Globe.

The bill, which is being introduced by Representatives Henry Waxman of California, chairman of the House Energy and Commerce Committee, and Ed Markey of Massachusetts, chairman of the Energy and Environment subcommittee, would also create a renewable energy standard that requires wind, solar, and other renewable sources to meet 25 percent of US energy needs by 2025. And it would create an energy efficiency resource standard that requires utilities to achieve a savings of 15 percent of electricity and 10 percent of natural gas by 2020.

The legislation, which is on track for a committee vote in May, leaves open one of the most controversial aspects of the cap-and-trade system, which is how many pollution credits will be auctioned off and how many will be doled out for free. That would be settled in the coming weeks, as lawmakers weigh in on what they would be willing to accept.

Environmentalists are urging Congress to adopt a global warming policy in advance of international climate talks in Copenhagen scheduled for December, where leaders have agreed to update the Kyoto Protocol, which the Bush administration refused to sign.

In his first week in office, President Obama overturned Bush policy on climate change, ordering environmental regulators to reconsider allowing California, Massachusetts, and other states to set stricter auto emissions standards.

“This legislation will create millions of clean energy jobs, put America on the path to energy independence, and cut global warming pollution.” Waxman said in a statement. “Our goal is to strengthen our economy by making America the world leader in new clean energy and energy efficiency technologies.”

Markey added in a statement, “This legislation will create clean energy jobs that can’t be shipped overseas, reduce our dependence on foreign oil, and make America the global leader in energy technology. We will create jobs by the millions, save money by the billions, and unleash energy investment by the trillions. Chairman Waxman and I will work with our colleagues to ensure that we are protecting American consumers and that our clean energy future helps all parts of the country.”

House Speaker Nancy Pelosi offered measured support, calling the Waxman-Markey bill "a strong starting point."

"The President has called for landmark legislation to launch a clean energy economy that will build prosperity and balance the needs of the American people and industry," she said in a statement. "As was the case with the Energy Independence and Security Act in 2007, House leaders will work closely with the committees of jurisdiction to advance this critical legislation.

"The final legislation will: create millions of new, green jobs; increase our national security by reducing our dependence on foreign oil; increase American competitiveness by making us a technology leader; meet the climate crisis with sound science; and reduce overall energy costs for consumers and businesses. We will continue to hear the best ideas about how to tackle the challenge from a broad range of stakeholders, with the intention of having legislation on the House floor this year. The scope of this effort is historic and overdue."

The US Climate Action Partnership -- a coalition of businesses and environmental groups -- also called the bill a good starting point.

"The discussion draft provides a solid foundation to create a climate strategy that both protects our economy and achieves the nation's environmental goals. It recognizes that many of these issues are tightly linked and must be dealt with simultaneously. We appreciate the thoughtful approach reflected in the draft and the priority the Chairmen are placing on this important issue," the partnership said in a statement.

"The draft addresses most of the core issues identified by USCAP in our Blueprint for Legislative Action and reflects many of our policy recommendations. Any climate program must promote private sector investment in vital low-carbon technologies that will create new jobs and provide a foundation for economic recovery. Legislation must also protect consumers, vulnerable communities and businesses while ensuring economic sustainability and environmental effectiveness."

The partnership includes some big corporate names, including Boston Scientific, that favor action on global warming.

Scott Paul, executive director of the Alliance for American Manufacturing, had some praise for the bill.

"We are pleased that the Waxman-Markey draft bill recognizes the need to stop carbon leakage and ensure the competitiveness of our domestic industries," he said in a statement. "The right combination of rebates and border adjustments can help fulfill the mission of the bill: lowering carbon output while strengthening the domestic economy. As the legislative process moves forward, we are eager to work with Congress to make sure the rebate and border adjustment features are strong enough to hold other countries accountable for their contributions to greenhouse gas emissions. Greenhouse gases are a global problem and a global solution is an imperative. The last thing Congress should want to do is offshore jobs and production to foreign manufacturers that have significantly larger carbon footprints, undermining the aim of climate change policy."

The summary of the bill and schdule is below. For more detail, click here.

The last time Barack Obama traipsed off to Europe, he was greeted by adoring throngs, excited beyond measure by the idea that he might be the next American president.

More than 200,000 came to see him speak last July in Berlin. The worship was such that Republican rival John McCain tried to boomerang it on Obama, comparing him in an Internet ad to bubble-headed celebrities like Britney Spears.

Now, Obama is the president, facing the reality of an economic crisis, and likely to hear some tough talk as he arrives at the G-20 economic summit in London.

This week, the crowds greeting Obama won't be as large. And some of them won't be cheering, but rather jeering him and other world leaders because of the global recession. An estimated 35,000 union members, environmentalists, and others marched in the first major protest over the weekend, and more are planned.

Before he leaves for Europe, President Obama urged congressional Democrats late today to have his back on his ambitious budget.

According to the White House account, he praised Democrats for passing the $787 billion stimulus package, then reinforced the high stakes of the votes this week on his $3.6 trillion budget.

"Calling his budget 'a distillation of core Democratic values,' he urged members of Congress to pass his blueprint for sustained economic growth," the White House said. After answering questions for about 30 minutes about his budget priorities, Obama again asked for support on his budget.

While Republicans have railed against Obama's plan, saying it risks bankrupting the country, some Democrats have also raised doubts about some of the spending and the deficits.

President Obama this morning outlined his latest version of tough love for Detroit automakers, extending a federal lifeline, but giving the companies a deadline to put up or risk bankruptcy.

"We cannot and must not, and will not let our auto industry simply vanish," he declared at the White House. "This industry is like no other. It's an emblem of the American spirit; a once and future symbol of America’s success. It is what helped build the middle class and sustained it throughout the 20th century. It is a source of deep pride for the generations of American workers whose hard work and imagination led to some of the finest cars the world has ever known. It is a pillar of our economy that has held up the dreams of millions of our people.

"But we cannot continue to excuse poor decisions," Obama added. "We cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars. These companies – and this industry – must ultimately stand on their own, not as wards of the state. "

After rejecting restructuring plans the carmakers submitted, the president announced that the federal government is giving Chrysler 30 days to complete a proposed partnership with Italian automaker Fiat, with the promise of up to $6 billion in aid if they can make a deal. Chrysler has received $4 billion in federal help so far and had asked for $5 billion more.

Obama gave General Motors 60 additional days of operating money to restructure, but with a price -- GM chairman Rick Wagoner was forced out. Michigan Governor Jennifer Granholm, who has been advising the White House on the auto rescue, said on NBC's "Today" show that Wagoner "clearly is a sacrificial lamb." GM, after $13.4 billion in government loans, had sought as much as $16.6 billion more.

Obama said it is time for tough decisions, for no longer putting off facing fundamental problems.

"What we are asking for is difficult," he said. "It will require hard choices by companies. It will require unions and workers who've already made painful concessions to make even more. It will require creditors to recognize that they can't hold out for the prospect of endless government bailouts....Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry.

"But I am confident that if each are willing to do their part... then this restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry; an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy independent future. I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars."

He reached out to auto workers, who he said are among those suffering the most during the recession.

"The pain being felt in places that rely on our auto industry is not the fault of our workers. They labor tirelessly and desperately want to see their companies succeed. And it is not the fault of all the families and communities that supported manufacturing plants throughout the generations. Rather, it is a failure of leadership – from Washington to Detroit – that led our auto companies to this point," he said.

To reassure consumers during the uncertain period, Obama said the US government will stand behind warranties. (Click here for more detail.)

"It is my hope that the steps I am announcing today will go a long way toward answering many of the questions people may have about the future of GM and Chrysler," he said. "But just in case there are still nagging doubts, let me say it as plainly as I can – if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warranty will be safe. In fact, it will be safer than it’s ever been. Because starting today, the United States government will stand behind your warranty."

Obama's full remarks are below. For more detail on the plan, click here.

Fritz Henderson, GM's new CEO, issued a statement taking on Obama's challenge:

"Over the next 60 days, we will work around the clock, with all parties, to meet the aggressive requirements that have been set by the task force, and to make the fundamental and lasting changes necessary to reinvent GM for the long-term.

"We have significant challenges ahead of us, and a very tight timeline. I am confident that the GM team will succeed, and that a stronger, healthier GM will play an important role in revitalizing America's economy and re-establishing its technology leadership and energy independence."

"The administration has made it clear that it expects GM to expand and accelerate its restructuring efforts. I want the American people to know that we understand and accept this guidance. The road is tough, but the ultimate goal -- a leaner, stronger, viable GM -- is one we share."

Soon after Obama's speech, Chrysler CEO Bob Nardelli said that his company and Fiat have reached a framework of a deal. "We appreciate the willingness of the task force, along with industry and financial experts, to consult closely with us in order to achieve this significant step," Nardelli said in a statement.

But so far, Obama's plan is not reassuring the markets. The bellwether Dow Jones industrial average has already plummeted more than 200 points.

The auto plan represents Obama's latest set of sweeping proposals as he juggles what he has acknowledged is a very full plate. Last week, Obama's team laid out a new bank rescue plan and a new strategy for Afghanistan and Pakistan. On Tuesday, Obama heads overseas for the G-20 economic summit.

Ronald Logue, chairman and CEO of State Street Corp. in Boston, is among the banking chiefs meeting today with President Obama as he tries to build support for his administration's latest rescue plan to help banks divest "toxic assets," bad investments that are tying up capital and making it difficult for them to lend money.

Treasury Secretary Timothy Geithner, who also unveiled proposals Thursday for tighter regulations of the financial sector, is also at the meeting, which comes days before Obama attends his first international summit, the G-20 Thursday in London.

According to the White House, Obama wants to "reiterate his belief that getting the economy back on track will require an understanding that each of us must look beyond our own short-term interests to the wider set of obligations we have to each other in order for America to succeed."

The others in attendance at the closed meeting, according to the White House: Jamie Dimon, JP Morgan Chase; Ken Chenault, American Express; John Koskinen, Freddie Mac; Robert Kelly, BONY-Mellon; Rick Waddell, Northern Trust; James Rohr, PNC; Lloyd Blankfein, Goldman Sachs; John Mack, Morgan Stanley; Vikram Pandit, Citi; John Stumpf, Wells Fargo; Cam Fine, Independent Community Bankers; Edward Yingling, American Bankers Association; Richard Davis, US Bank; and Ken Lewis, Bank of America.

UPDATE: Besides the toxic assets and tighter regulation, Obama and the bank executives also discussed the administration's plan to stem the rise in home foreclosures, executive pay, and the financial bailout program, White House spokesman Robert Gibbs said afterwards.

"The president emphasized that Wall Street needs Main Street and Main Street needs Wall Street," and "that he had no agenda beyond working to get a solution, the right solution for our financial system and to get it stabilized and working again for the American people," Gibbs said during his daily briefing.

Senators Edward M. Kennedy and John F. Kerry todayunveiled a fuller list of 36 community health centers in Massachusetts that will receive a total of $8.6 million in economic stimulus money.
"At a time when families across the Commonwealth are losing their jobs and struggling with health care costs, this funding for our community health centers is desperately needed and will greatly benefit the vital work they do so well,” Kennedy said in a statement. “The first community health center was created here in Massachusetts, and I’ve long been an advocate for the outstanding services they provide in our neighborhoods. I commend President Obama for his commitment to ensuring health centers are a centerpiece of our nation’s health care system so they can continue to serve those who would not otherwise have access to such quality care.”

“This investment is a lifeline for people struggling to pay their bills and those desperate for a job,” added Kerry. “It will create jobs modernizing and renovating the health centers that our seniors, pregnant women and families depend on and will relieve some of the strain on an already overburdened public health system.”

James W. Hunt Jr., president of the Massachusetts League of Community Health Centers, said in a statement, “This is an extraordinary step led by our Members of Congress and Senators to work with the Administration to reinforce the role community health centers play in providing access to health care and creating and maintaining jobs. A special thanks to Senator Kennedy for his consistent leadership in making health centers a key element in protecting our most vulnerable residents of the Commonwealth and nation. As the nation struggles, we’re seeing an increased demand for services, and community health centers will continue to be a key priority. We’re ready to serve.”

The list of grants is below:

Democrats have been giddily calling Republicans the "party of no," accusing the GOP of opposing President Obama's budget and economic plans without offering proposals of their own.

Now, they're chortling over the alternative budget outline that House Republicans unveiled on Thursday. The GOP is warning that Obama's $3.6 trillion plan will bankrupt the country and worsen the recession with tax hikes.

But Democrats are mocking the plan for its lack of detail.

"This DNC ad is brought to you by the number 0," a new web ad by the Democratic National Committee t says on screen.

"That’s how many numbers are in the GOP’s budget: 0," painting the number in bright red.

With whimsical music, the video then shows a series of cable talking heads remarking on the absence of detail. But Republicans will see more evidence of media bias.

White House spokesman Robert Gibbs joined in the mocking on Thursday. Asked whether he had perused it, he replied, "I did. It took me several minutes to read it." The White House press corps laughed.

"I will note that ... there's one more picture of a windmill than there is of a chart of numbers. There's -- just for your knowledge, there's exactly one picture of a windmill."

The Obama administration today announced plans to invest $3.2 billion in energy efficiency and conservation projects across the country as part of the economic stimulus package.

“These investments will save taxpayer dollars and create jobs in communities around the country,” Vice President Biden, who is overseeing the spending, said in a statement. “Local leaders will have the flexibility in how they put these resources to work – but we will hold them accountable for making the investments quickly and wisely to spur the local economy and cut energy use.”

The grants -- nearly $1.9 billion for cities and counties and nearly $770 million for states and territories -- will pay for energy audits and energy efficiency retrofits in residential and commercial buildings, the development of advanced building codes and inspections, and financial incentive programs for energy efficiency improvements.

Other programs that are eligible for funding include projects to reduce and capture methane and other greenhouse gas emissions from landfills, renewable energy installations on government buildings, and energy efficient traffic signals and street lights.

UPDATE: Senators Edward M. Kennedy and John F. Kerry announced today that $42.2 million of that money will flow to Massachusetts.

“Now and in the years ahead, environmental protection and energy efficiency are more important than ever to our families, the strength of our economy, and the future of our planet,” Kennedy said in a statement. “I’m proud to work with President Obama and Senator Kerry to strengthen our economy and our national commitment to energy reform. The President is right to make it a central part of his economic stimulus plan.”

“These recovery dollars will create green jobs, reduce our energy use, and cut polluting emissions. From every angle, this means more money in the pockets of working people in Massachusetts. Anytime you can create jobs and save taxpayers money, it’s a smart investment,” Kerry added.

President Obama is hosting an online town hall meeting this morning focusing on the economy, his latest bid to make the White House more accessible.

UPDATE: "I promised to open up the White House," and the virtual town hall is a key step, Obama said in opening the event, which is being streamed live online.

The things that Washington focuses on are often different than what real Americans care about, the president said before launching into his current stump speech on economic recovery.

The first question, selected from among the most asked, was about education.

Obama said the only reason he's in the White House is because of the education he received through sacrifices by his family and scholarships from generous schools.

"Too many of our children aren't getting that kind of education," he said.

While schools need more money, it's also time to lengthen school days and school years, to improve curricula and teacher training, and to expand proven reforms, he said.

Another question, submitted by video by a Georgia woman, was whether any of the jobs that have been outsourced in recent years will come back to America and be made available to the fast-growing ranks of the unemployed.

"Not all of these jobs are going to come back," Obama replied. "It's very hard to hang on to those jobs."

The solution, he said, is to move away from low-skill work that can be sent abroad. -- and toward high-skill jobs, particularly in clean energy, that could also revive the manufacturing sector and "put our economy on a more solid footing."

Asked why American can't have a European-style universal healthcare system, Obama said he wants affordable coverage for everyone, but a single-payer plan like those in Canada isn't the only path there.

The best approach, he said, is not to entirely scrap the US system that is based on most people getting their healthcare through their employers. "It works for a lot of people," he said.

Instead, the solution is to build on the current set-up, he said, and it's up to the legislators, insurers, advocacy groups, and others who were represented at last month's White House forum to devise the specific.

He declared again that now is the time for healthcare reform, and he wants to pass a plan this year.

The rising costs of care are a drag on the economy, on individual businesses and families, and governments at all levels, he said.

Healthcare is the real budget-buster, he said, not the additional spending that critics are carping about. "Better to pay now," he said.

Obama brought up a question himself, saying a popular choice was whether he believed that legalizing marijuana would boost the economy.

"I don't know what this says about the online audience," he joked. "The answer is no, I don't think that's a good strategy for growing the economy."

(Obama's full answers are below.)

The forum was interactive: The questions were categorized and searchable, and there was a way to rate others' questions.

As of 10 a.m. EST, about 92,600 people had submitted nearly 104,000 questions and cast 3.6 million "votes" on the queries. To take part, click here. (The voting ends at 9:30 a.m. EST)

Adding more detail about the event, the White House says that Obama will answer questions online and also reply to follow-up questions submitted in person from an audience of about 100 people in the East Room, including teachers, nurses, small business owners, and community leaders. Jared Bernstein, chief economist for Vice President Biden, is the moderator, reading some of the most popular questions from the website and cueing video questions.

Obama is the most web-savvy president ever. During his campaign, Obama used the Internet to connect with voters, mobilize supporters, and raise record-shattering sums.

Organizing for America, the post-election vehicle for his grassroots army, is urging supporters to take part. "Americans deserve to know what their government is doing to get our economy back on track," the group's director, Mitch Stewart, wrote in an email. "But it's up to you to participate and make this experiment a success."

The White House announced today that Social Security recipients will get their extra $250 payments from the stimulus plan in May.

Those who receive Social Security and Supplemental Security Income benefits don't need to take any action to get the cash, which will be sent separately from the person’s regular monthly payment. In all, more than $13 billion will be going to more than 50 million Americans

"The Social Security Administration and Commissioner Astrue have been working closely with other federal agencies to get these payments out the door in record time and into the hands of folks who need it most," Vice President Biden said in a statement. "These are checks that will make a big difference in the lives of older Americans and people with disabilities - many of whom have been hit especially hard by the economic crisis that has swept across the country."

The middle-class tax cut of $400 for most workers and $800 for couples is to appear in paychecks starting next week.

In preaching patience to American worried sick about the economic swoon, President Obama is trying to create his own scorecard for success in the economic recovery.

It's not the stock market's daily gyrations, or what the cable talking heads are saying, he told two sold-out Democratic Party fund-raisers Wednesday night.

"There will be days where we may be declared winners, and there will be days where the umpires say, oh, they lost that one. There will be days when the markets go up; there will be days when the markets go down," he said at the National Women in Arts Museum.

"But you and I, we measure our economic recovery in a different way. We're already starting to see signs of progress that we're making a difference in the lives of the American people."

In remarks he echoed at the second event at the Warner Theater, Obama declared that success should be measured by what happens in the lives of real Americans.

"We measure our recovery by how many Americans can bring home a paycheck that lets them make ends meet," he said. "That’s why the first part of our strategy was to pass a recovery plan to jumpstart job creation and put money in people’s pockets. And because we did, all across the country there are teachers that are still in the classroom, and police officers that are still on the beat, and construction crews that are breaking ground rebuilding America’s infrastructure for the future. Because of this plan, as early as next week, 95 percent of all Americans are going to receive a tax cut -- a tax cut that we promised during the campaign -- it's going to be in their paychecks.

"That's how we measure success," Obama added. "We measure our recovery by how many families own their own piece of the American Dream. That’s why the second step of our strategy was to launch a plan to stabilizing the housing market and help responsible homeowners stay in their homes. That's why the recovery plan included an $8,000 tax credit for first-time homebuyers. Already, mortgage rates have fallen to near-historic lows, encouraging Americans to re-finance their mortgages, and we've begun to see signs of increased sales and stabilizing home prices for the very first time in a long time.

"We measure our recovery by how many small businesses can keep their doors open, and how many families can afford the promise of a college education. And that’s why the third step that we took was to restart the flow of credit to families and businesses by generating car loans and student loans and small business loans. It's a program that Secretary Geithner worked with the Federal Reserve to design and it has already generated more lending in the last week than we saw in the previous four months combined.

"And ultimately, we're going to measure our success based on whether we can create an economy that builds a lasting foundation for our shared economic growth so that we don't face another crisis like this 10 years from now, or 20 years from now."

President Obama's grassroots group announced today it is launching its first TV ad, a call to backers to contact Congress in support of his budget.

"America is facing tough times," the announcer says. "Fortunately, President Obama has a plan to get our economy moving again, to cut the deficit in half, and create jobs by investing in healthcare, energy independence, and schools."
"Thousands are going door to door as part of Organizing for America -- gathering support for President Obama’s plan to invest in America’s future," the announcer continues, referring to last weekend's nationwide canvassing. "You can help too. Call Congress and tell them to support President Obama’s budget plan to get our economy moving again."

The ad by Organizing for America, now housed within the Democratic National Committee, is to air on national cable and local cable in Washington, D.C.

How do you separate policies from the person?

It's more than an academic riddle these days, as President Obama's Republican critics gingerly walk the tightrope of opposing his economic and other plans without being accused of being unpatriotic.

Conservative radio personality Rush Limbaugh started it even before Obama's inauguration in January by saying that he hoped Obama failed because he objected to many of his policies.

At a GOP fund-raiser Tuesday night while Obama was defending his proposals in a prime-time news conference, Governor Bobby Jindal of Louisiana, poured some fuel on the rhetorical fire.

He described the premise of the question -- "Do you want the president to fail?" -- as the "latest gotcha game" that Democrats were using to bludgeon Republicans.

"Make no mistake: Anything other than an immediate and compliant, 'Why no sir, I don't want the president to fail,' is treated as some sort of act of treason, civil disobedience, or political obstructionism," said Jindal, a potential Republican presidential candidate in 2012. "This is political correctness run amok."

This morning on CNN, former Senator Fred Thompson, who ran for the GOP nomination last year, said that he agreed with Republicans hoping for an Obama flame-out.

"I want his policies that I believe take us in the wrong direction to fail," Thompson said. "If he takes us down the road of tripling our national debt in ten years and making us vulnerable to higher interest rates and higher inflation, and things of that nature, I want all those policies not to succeed."

UPDATE: Asked on MSNBC today whether he wants Obama to fail on his budget, Republican Senator Judd Gregg of New Hampshire replied, "Clearly, this budget needs to be rewritten and it needs to be redone, and we're willing to do it in a bipartisan way. We're willing to sit down on issues like entitlement reform and get something done that's going to be constructive."

But Gregg, once Obama's choice for commerce secretary, added, "I really don't want the president to fail. If the president fails, the country fails."

Senator John F. Kerry is weighing in today on the global economic crisis, with a focus on the security threats that it could pose.

Opening a Senate Foreign Relations Committee hearing, Kerry quoted national Intelligence Director Dennis Blair's recent warning to Congress that the financial crisis and its geopolitical implications present the “primary near-term security concern of the United States" and that the longer the crisis lasts, the greater the likelihood for damage to US security interests.

"That is an amazing statement given the ongoing risks we face from terrorism, two wars, and rogue nuclear programs in Iran and elsewhere," Kerry said, according to prepared remarks.

"We will have to confront the potential for increased political instability; large-scale failures of other countries’ financial systems; escalating financial protection or trade wars that could help to deepen the crisis; increased poverty and hunger in the developing world; and competitors exploiting financial instability in ways that diminish our influence," Kerry added. "And these problems are not confined to traditionally unstable corners of the globe: Europe too is in deep financial trouble, and Turkey, Indonesia, and Pakistan, three of our most important partners in the Muslim world, today face acute balance of payments crises.

"We must also confront the fact that there is a great deal of anger out there among people who blame the model we exported. Even as we restore confidence in our markets, we will also need to find a strategy to project leadership, share burdens, and spread stability as this crisis continues to reverberate worldwide."

Kerry's full opening statement is below:

President Obama's grassroots army that he built during his historic campaign continues to pay dividends.

Now in the form of Organizing for America and housed within the Democratic National Committee, it announced today that Saturday's door-to-door effort trying to build support for Obama's budget collected more than 100,000 pledges.

More than 10,000 volunteers participated in about 1,200 events in all 50 states, said the group, which is based on 14 million e-mail addresses compiled during the campaign.

"We're very encouraged by the strong showing we saw from canvassers and volunteers in neighborhoods across the country on Saturday," Mitch Stewart, the group's director, said in a statement. "The message they delivered came through loud and clear - Americans are just as committed to helping enact the change President Obama campaigned for as they were to sending him to the White House. They understand that to get our economy moving again, make healthcare more affordable, reduce our dependence on foreign oil and improve education, the President needs our help - and with 100,000 pledges and counting, Americans are doing just that."

UPDATE: Today, Organizing for America sent supporters an email with phone numbers of their members of Congress, urging them to call with their backing for the budget. It also asks supporters to log online what kind of response they received -- another way for the White House to count potential votes.

"Last week, thousands canvassed their communities to talk with neighbors about the need for a new direction. Now, it's time to take that message to Washington," Stewart wrote in the email. "We can't afford to ignore the long-term threats to our prosperity. Now is the time to build the foundation for a recovery that lasts."

A major liberal-labor advocacy group announced today it is launching its biggest TV ad blitz yet, trying to shore up support for President Obama's budget as it comes under assault from members of both parties.

While Obama gave a steadfast defense last night in his press conference, arguing his $3.6 trillion plan is the best prescription to real prosperity, congressional budget writers are busily paring it back, largely to cut projected deficits.

Obama, himself, is going to meet this afternoon with Senate Democrats on Capitol Hill to build support for the budget. In advance, the president also is having his budget director, Peter Orszag, to hold a conference call with reporters to talk about the congressional proposals.

Senate Budget Committee Chairman Kent Conrad, a fellow Democrat, wants to let Obama's core tax credit of $400 for most workers and $800 for couples expire at the end of next year. Those tax breaks, part of the $787 billion stimulus package, are to show up in paychecks the week of April 1.

UPDATE: Despite the changes, Orszag told reporters that the working versions of the budgets mirror the president's priorities.

"We are very pleased that the House and Senate budget committees are taking up resolutions that are fully in line with the president's key priorities for the budget,'' he said.

"They are 98 percent the same as the budget proposal the president sent up in February. The resolutions may not be identical twins to what the president submitted, but they are certainly brothers that look alike."

(Orszag's full remarks are below.)

The ad by Americans United for Change puts the blame on former President Bush, and promotes Obama's blueprint to fix the economy.

"For eight years, the Bush Administration turned our economy into a house of cards," the announcer says. "Last fall that house came tumbling down.

"Now President Obama has drawn up a budget blue print that will rebuild our economy on a solid foundation. Jobs, health care, education, clean energy – reform. On this foundation we can build real, long term economic prosperity – for all Americans," the announcer continues. "Call Congress. Tell them you support President Obama’s budget. Let’s all get to work rebuilding America."

The group says it will spend more than $700,000 starting today to air the spot on national cable, in Washington, and in markets home to key members of Congress, including Maine and Manchester, N.H.

“The work that begins this week on President Obama’s budget is by far the most significant in shaping the President’s transformational commitments to healthcare reform, education and clean energy – investments that will rebuild and renew America’s economy and lay a solid foundation for long-term prosperity," Tom McMahon, the group's acting executive director, said in a statement. "This ad is designed to engage the American people in the process of bringing about the transformational change they voted for in November by contacting their elected representatives and asking for their help in putting our country on the road to prosperity. It is our hope that Congress gets the boost it needs to stand up to the special interests that will do anything to maintain the failed policies of the last eight years that were entirely stacked in their favor and that turned our economy into a house of cards.”

In his opening statement before his second prime-time news conference, President Obama sought tonight to reassure Americans that he's taking aggressive action on the recession, while still asking for patience.

"There are no quick fixes," Obama said. "We’ve put in place a comprehensive strategy designed to attack this crisis on all fronts. It’s a strategy to create jobs, to help responsible homeowners, to re-start lending, and to grow our economy over the long-term. And we are beginning to see signs of progress."

He highlighted the $787 billion economic stimulus plan he championed, steps to shore up housing, and moves to unfreeze the credit markets.

The president added, "We will recover from this recession. But it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have towards each other – that’s when we succeed. That’s when we prosper. And that’s what is needed right now. So let us look toward the future with a renewed sense of common purpose, a renewed determination, and most importantly, a renewed confidence that a better day will come."

Obama also pitched his ambitious $3.6 trillion budget, which is facing skepticism from both Democrats and Republicans who say it means too much red ink and tries to do too much.

But Obama said it's the best approach to avoid another recession.

"The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this ten or twenty years from now," he said. "We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of healthcare for families, businesses, and our government. And in this budget, we have to make the tough choices necessary to cut our deficit in half by the end of my first term – even under the most pessimistic estimates.

"At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led us to a narrow prosperity and massive debt. It’s with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest."

That includes clean energy jobs, an efficient healthcare system, and controlling entitlements like Medicare and Medicaid.

"That’s why this budget is inseparable from this recovery – because it is what lays the foundation for a secure and lasting prosperity."

Obama's full opening statement is below:

The third time was the charm for President Obama and his choice for commerce secretary.

The Senate today confirmed former Washington state Governor Gary Locke for the post after Obama's first two selections withdrew before they even came up for a vote -- Democratic New Mexico Governor Bill Richardson because of a state investigation and Republican New Hampshire Senator Judd Gregg because of policy differences.

Locke, who was approved by voice vote, "will ensure American workers can prosper, our businesses can thrive and the economy can grow," said Senate Commerce Committee Chairman Jay Rockefeller of West Virginia, the Associated Press reports.

Public housing programs across Massachusetts will get nearly $82 million from the federal economic stimulus package, Senators John F. Kerry and Edward Kennedy announced this afternoon.

Local housing agencies can use the money improve public housing units, create jobs, and increase energy efficiency by replacing plumbing and electrical systems.

"The housing crisis has walloped Massachusetts, and mayors everywhere are looking for relief," Kerry said in a statement. "This investment will create jobs today, build affordable housing so struggling families can get back on their feet, and put plumbers and electricians to work improving energy efficiency and updating plumbing and electrical systems."

“Countless families across our Commonwealth have been devastated by the housing crisis and have no place to turn,” added Kennedy. “It’s essential to provide this necessary assistance so that housing authorities across Massachusetts can keep up with the increased need, and reduce costs for families who would otherwise have no place to call home.”

Big business won a key ally today in its high-stakes fight against the "check-card" bill that would make it easier for unions to organize workplaces.

Senator Arlen Specter of Pennsylvania, who was the only Republican to support the bill two years ago, told business groups that he will oppose the measure.

Unions were counting on him as the 60th vote to overcome an expected GOP filibuster. Democrats and two independents who usually vote with them control 58 seats.

“We applaud the Senator for taking a principled stand to support Main Street employers and workers in Pennsylvania," Thomas J. Donohue, president and CEO of the US Chamber of Commerce, said in a statement.

“There will likely be many attempts to push other forms of labor law reform with similar goals, and we urge the senator to continue to oppose these misguided efforts. We also urge all senators to oppose any efforts that would take away the protection of the private ballot, impose binding interest arbitration on America’s small businesses and other employers, or create one-sided remedies."

The bill would allow workplace organizers to form a union by signing up a majority of employees -- without allowing companies to demand a secret ballot.

Earlier today, the AFL-CIO released a poll it commissioned that showed 72 percent of Americans favoring the bill, including majorities of both Democrats and Republicans.

UPDATE: AFL-CIO president John Sweeney called Specter's decision "frankly a disappointment and a rebuke to working people, to his own constituents in Pennsylvania and working families around the country."

"We do not plan to let a hardball campaign from Big Business derail the Employee Free Choice Act or the dreams of workers," Sweeney added in a statement.

"There are deep flaws in our labor laws, as Sen. Specter acknowledged today. The freedom to join together and bargain with employers for fair wages and better benefits is critical to rebuilding our middle class – and now is exactly the time to do it, as we begin to revive our economy in a way that works for everyone. In the coming weeks, we will be escalating our campaign and finding the best ways forward to a balanced, strong economy."

Anna Burger, chairwoman of the Change to Win labor coalition, said in a statement, “The Employee Free Choice Act is a vital component to restoring our economy, rebuilding the middle class and renewing the American Dream for America’s workers. Allowing workers the choice to join together, free from intimidation and harassment, to bargain for job security, better wages and health care will stimulate our economy and put working families back on the path of prosperity. We will continue to work with Democrats and Republicans, including Sen. Specter, to pass this critical legislation and make our economy work for everyone.”

In a speech on the Senate floor, Specter called it a "very emotional issue with labor looking to this legislation to reverse the steep decline in union membership and business expressing great concern about added costs, which would drive many companies out of business or overseas," according to the Associated Press

Specter called the secret ballot "the cornerstone of how contests are decided in a Democratic society."

President Obama will address an international audience today just after 8 p.m. EDT in his second prime-time press conference of his young administration.

In advance of that, and of the G-20 economic summit next month in London, he called for global cooperation to stem the recession in an op-ed piece that ran today in 31 newspapers around the world, including the Baltimore Sun, Chicago Tribune, and Los Angeles Times.

"We are living through a time of global economic challenges that cannot be met by half measures or the isolated efforts of any nation. Now, the leaders of the Group of 20 have a responsibility to take bold, comprehensive and coordinated action that not only jump-starts recovery, but also launches a new era of economic engagement to prevent a crisis like this from ever happening again," Obama wrote.

"My message is clear: The United States is ready to lead, and we call upon our partners to join us with a sense of urgency and common purpose. Much good work has been done, but much more remains," he added. "Our leadership is grounded in a simple premise: We will act boldly to lift the American economy out of crisis and reform our regulatory structure, and these actions will be strengthened by complementary action abroad."

Obama also acknowledges the central role of the financial crisis in the United States in causing the cascading economic crisis around the world.

"I know that America bears our share of responsibility for the mess that we all face. But I also know that we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people," he wrote. "This G-20 meeting provides a forum for a new kind of global economic cooperation. Now is the time to work together to restore the sustained growth that can only come from open and stable markets that harness innovation, support entrepreneurship and advance opportunity."

The full list of newspapers and the full op-ed, both provided by the White House, are below.

UPDATE: The Senate Foreign Relations Committee, meanwhile, announced this afternoon that it will hold a hearing Wednesday afternoon to focus on the economic impact of the financial crisis and its political and national security implications, also leading up to the G-20 meeting in London on April 2.

The scheduled witnesses are Lawrence Lindsey, president and CEO of the Lindsey Group; George Soros, chairman of Soros Fund Management and Open Society; and Martin Wolf, associate editor and chief economics commentator at Financial Times.

“The economic crisis we’re experiencing in the United States is being felt around the world,” Senator John F. Kerry, the panel's chairman, said in a statement. “The national security and geopolitical issues emanating from a crisis of this magnitude are of concern to this committee. We look forward to exploring not only the problems but perhaps some of the solutions on the table to prevent bigger security threats from emerging out of this crisis down the road.”

Senators Edward M. Kennedy and John F. Kerry announced this afternoon that federal economic stimulus money will provide nearly $25 million for veterans facilities in Massachusetts, along with a $250 one-time payment to qualifying vets.

The tax-free grant will go to residents of the United States and its territories who received veterans payments at any time between November and January. The money is part of $1.4 billion that the Veterans Administration is receiving from the stimulus package to assist veterans, hospitals, and care centers nationwide.

"We owe an enormous debt to the courageous men and women who have sacrificed so much to keep our nation free and strong, and we must care for their needs when they come home from war. Now more than ever, veterans and the facilities that serve them, urgently need this support, and I commend President Obama for making it a priority to help those who have served America so well,” Kennedy said in a statement.

“This investment creates jobs and helps keep faith with our veterans at the same time,” added Kerry. “The renovation and remodeling of these veterans centers and medical facilities will help thousands of veterans, including many just returning from Iraq and Afghanistan. Honoring our veterans and putting people back is a win-win proposition every American should celebrate.”

Timothy Geithner might finally get some help.

Political pundits have been joking that the embattled treasury secretary has been "home alone" while dealing with the financial crisis because several people in the mix for key posts in the department dropped out during the vetting process.

This evening, President Obama announced his picks for three of the four most senior jobs: Neal S. Wolin, nominated to be deputy secretary, Lael Brainard, nominated to be undersecretary for international affairs, and Stuart A. Levey, the current Under Secretary for Terrorism and Financial Intelligence, tapped to stay in that position.

"I am grateful for the service of these dedicated and talented individuals and have the highest confidence that, under the leadership of Secretary Geithner, they will serve the American people well as we tackle the challenges ahead of us,” Obama said in a statement.

Their mini-biographies, provided by the White House, are below:

New England members of Congress are banding together to protect a new Navy destroyer program that promises jobs in the region, but could be on the chopping block.

Senators Edward M. Kennedy and John F. Kerry of Massachusetts, and Jack Reed and Sheldon Whitehouse of Rhode Island, and Congresswoman Niki Tsongas of Massachusetts, along with some House colleagues, sent a letter to Defense Secretary Robert M. Gates urging him to support the DDG-1000 destroyer in the president’s budget.

Gates is expected to soon propose a series of major cuts so the money can be spent instead to fight terrorists and insurgents. The new destroyer would be built at the Bath Iron Works in Maine and a second shipyard in Mississippi, while contractors in Rhode Island and elsewhere would supply components.

“I urge President Obama to include full funding for DDG-1000 destroyers in his budget in the coming fiscal year. Over the past years, $11 billion has already been invested in the program," Kennedy said in a statement today. "If the Navy wants to start building a different type of destroyer, it needs to make a persuasive case to Congress that such a major shift makes sense. The Navy, so far, has failed to provide that information.”

“Support for this request is critical to the timely delivery of needed capabilities to our Navy through the DDG-1000 and future generation surface combatants. This plan leverages the technologies developed on DDG-1000 to efficiently and effectively provide technologies to the next generation of ships,” Reed added.

Their letter is below:

When Senator Judd Gregg stunningly withdrew as President Obama's choice for commerce secretary, the New Hampshire Republican blamed "irresolvable conflicts" on policy.

He wasn't kidding.

Since giving Obama the heave-ho last month, Gregg has been one of the Democratic president's harshest critics. In recent days, he has been blasting Obama's proposed $3.6 trillion budget, saying it would bankrupt the country. Gregg, the ranking Republican on the Senate Budget Committee, got some more ammunition on Friday, when the nonpartisan Congressional Budget Office projected that Obama's game plan would generate unsustainable deficits averaging almost $1 trillion a year for the next decade.

In an interview on MSNBC this afternoon, Gregg said if he were in charge, he would excise from Obama's budget the healthcare expansion ($634 billion over 10 years) and the government takeover of student loans, would freeze discretionary domestic spending, and would tackle entitlement programs such as Medicare and Social Security.

He also stood by his eye-opening remarks about the moves by some Democrats to limit debate -- and require only a bare majority for passage -- on major tax proposals in Obama's budget plan, including carbon and healthcare taxes.

While Democrats say that Republicans did the same when they were in control, Gregg and other Republicans say that puts a lie to Obama's pledge of bipartisanship and changing how Washington does business.

"That would be the Chicago approach to governing: Strong-arm it through," Gregg said last week. "You're talking about the exact opposite of bipartisan. You're talking about running over the minority, putting them in cement, and throwing them in the Chicago River."

In a weeklong blitz for his ambitious, but somewhat beleaguered budget, President Obama today is highlighting "clean energy" proposals.

In an economic crisis that has cost 4.4 million jobs already, "green" energy holds great promise for boosting the recovery, Obama told entrepreneurs and research leaders in Washington this afternoon.

"It's said that necessity is the mother of invention," he said. "At this moment of necessity, we need you."

The president pointed out specific businesses that are creating energy jobs, and praised his new science adviser, John Holdren, who came from Harvard, and MIT's president, Susan Hockfield, for work being done there.

It's a choice, he said, between remaining the world's largest importer of foreign oil -- and becoming the world's biggest exporter of alternative energy technology.

"We know the right choice," he said. "We have known the right choice for a generation. It is time to make that choice."

In advance of the meeting, the White House released a "fact sheet" saying that the $787 billion stimulus bill includes $39 billion in energy investments at the Department of Energy and $20 billion in tax incentives for clean energy.

Obama's $3.6 trillion spending blueprint, which is under criticism from both Republicans and some Democrats because of new, higher deficit projections, includes almost $75 billion over 10 years to make the research and experimentation tax credit permanent.

The president argues that alternative energy will create jobs, wean the country from foreign oil, and help make progress on global warming.

Obama also promoted his budget in his weekly Internet and radio address on Saturday and in an interview on "60 Minutes" on Sunday, and plans to do so again in a primetime news conference on Tuesday.

He also had his grassroots army knock on doors over the weekend to build support for his budget.

"It’s an economic blueprint for our future – a vision of America where growth is not based on real estate bubbles or overleveraged banks, but on a firm foundation of investments in energy, education, and healthcare that will lead to a real and lasting prosperity," he said in his weekly address. "These investments are not a wish list of priorities that I picked out of thin air – they are a central part of a comprehensive strategy to grow this economy by attacking the very problems that have dragged it down for too long: the high cost of health care and our dependence on foreign oil; our education deficit and our fiscal deficit."

He said renewable energy is one of four core principles he will insist on as Congress debates and rewrites his proposal.

"First, it must reduce our dependence on dangerous foreign oil and finally put this nation on a path to a clean, renewable energy future. There is no longer a doubt that the jobs and industries of tomorrow will involve harnessing renewable sources of energy. The only question is whether America will lead that future."

The fact sheet is below:

President Obama said today that he is "very confident" that the latest plan to take toxic assets off the backs of banks and other financial institutions will work and ease the credit crunch.

He told reporters that the plan detailed this morning by his embattled treasury secretary, Timothy Geithner, will build on the progress already made with the $787 billion economic stimulus package and with his proposals to stem home foreclosures.

The plan Geithner outlined relies on public-private partnerships -- with the private firms lured by federal largess -- to buy up the bad assets.

"We believe that this is one more element that is going to be absolutely critical in getting credit flowing again. It's not going to happen overnight. There's still great fragility in the financial systems, but we think that we are moving in the right direction," Obama said after his daily economic briefing.

"And we are very confident that, in coordination with the Federal Reserve and the FDIC, other relevant institutions, that we are going to be able to not only start unlocking these credit markets, but we're also going to be in position to design the regulatory authorities that are necessary to prevent this kind of systemic crisis from happening again."

His full remarks are below, as is the transcript of Geithner's press briefing on the plan:

Republicans and some Democrats are saying that scary new deficit figures today argue for dialing back President Obama's ambitious budget plans for healthcare, alternative energy, and education and more.

But his most liberal allies are asserting the opposite, saying they show the need for the sweeping change that Obama's $3.6 trillion blueprint represents.

"The best way to reduce the deficit is to grow our economy; the best way to grow our economy is to act on the priorities in the president's budget," House Speaker Nancy Pelosi said in a statement. "President Obama's budget will transform our economy and create jobs by cutting taxes for 95 percent of Americans, making healthcare more affordable and accessible, creating a new, clean energy economy, and modernizing our schools to prepare our workforce for global competition.

"Over the next two weeks, I expect the House Budget Committee to produce, and the entire House will approve, a budget resolution that reflects the President's priorities and will help usher in a new era of job creation and lasting prosperity for the American people."

The Congressional Budget Office projected today that Obama's budget would produce federal deficits totaling $9.3 trillion between 2010 and 2019, $2.3 trillion more than the administration predicted last month. The CBO says the deficit under Obama's policies would never go below 4 percent of the size of the economy, a level that most economists say is dangerously high.

But USAAction, an advocacy group pushing Obama's budget, said the way to dig out from all the red ink is to make the costly investments.

“This revised report delivers a stark message that the economy is in even worse shape than previously thought," Program Director Alan Charney said in a statement. "It reinforces why it's even more critical to pass the initiatives on healthcare, education and the economy laid out the President's budget. The solutions must be adequate to match the depth of the problems. If we don't deal with the major underlying problems with the economy and make it possible for job creation, our deficits will continue to skyrocket."

"We cannot achieve sustainable economic growth without fixing our broken healthcare system, reducing our dependence on foreign oil, and investing in an educated workforce for tomorrow," he added. "The President's budget accomplishes these objectives and we cannot let the naysayers keep sending this country down the wrong direction.”

Tom McMahon, acting executive director of Americans United for Change, which is advocating Obama's budget with nearly 100 labor, environmental, and progressive organizations, agreed:

“The sobering new deficit projections deliver a stark message that the economy is in even worse shape than was previously thought,. It also underscores the urgent need to pass the bold initiatives on healthcare, education, energy and the economy laid out the President’s budget. If we don’t deal with the major underlying problems with the economy and make it possible for business to create jobs, our deficits will only continue to explode. We simply cannot achieve sustainable economic growth without fixing our broken health care system, reducing our dependence on foreign oil, and investing in tomorrow’s educated workforce. Bottom line: the most effective way for Congress to begin to regain control of the federal deficit is to support the President's budget plan that is blueprint for rebuilding and renewing America.”

Democrats are blasting Alaska Governor Sarah Palin for announcing that she will reject nearly half of the economic stimulus money coming to her state from Washington, accusing her of putting national political ambitions ahead of her constituents.

Palin, the Republican vice presidential nominee last year, announced Thursday that she will accept 55 percent of the estimated $930 million in stimulus cash, leaving it up to legislators to decide if they will request any of the rest.

Palin said she would accept money that is "timely, targeted and temporary" and does not create strings that will bind the state in the future, she said, according to the Associated Press. "I can't attest to every fund that's being offered the state in the stimulus package will be used to create jobs and stimulate the economy, so I'm requesting only those things that I know will."

Democratic National Committee spokesman Brad Woodhouse called Palin's decision "appears to be nothing more than political posturing."

"At a time when her state is suffering, Alaska's working families cannot afford a governor that puts her political future ahead of the needs of the state and its families," he added.
Alaska Democratic Party head Patti Higgins and Democratic gubernatorial candidate Bob Poe plan a conference call this afternoon to pile on.

Some Republican state legislators have also questioned Palin's choice. A Democratic state representative, Les Gara of Anchorage, said he was shocked the governor would consider turning away money, especially for schools and new teachers when the state has a 40 percent high school dropout rate, according to the AP. He accused the governor of thinking only of her own national political prospects.

Palin, who joins a few other GOP governors in rejecting some stimulus money, said she was acting in the best interests of Alaskans.

Seeking to build support for his economic plans, President Obama this afternoon also accented the need to spend recovery money wisely.

He announced he is issuing a directive on using the $787 billion stimulus package to "provide guidelines to federal agencies for what does and what does not constitute an acceptable use of taxpayer money, guidelines that will help ensure that we are proving ourselves worthy of the great trust the American people have placed in us."

(Read the directive here.)

To set an example, Obama announced that under the guidelines, he has already nixed a project close to home -- modernizing the electrical and heating systems in the White House's East Wing, where the first family lives.

"This is a much-needed project, it's long overdue, and I hope Congress funds it in the future. But because this request does not meet the high standards I have set -- because it will not create many jobs or advance our recovery -- it will not be funded under the Recovery Act," he told leaders and members of the National Conference of State Legislatures.

Another highlight of the new rules is far more transparency on the activities of lobbyists and a presidential pledge that projects will not be funded "as a way of doing favors for lobbyists."

"Any lobbyist who wants to talk with a member of my administration about a particular Recovery Act project will have to submit their thoughts in writing, and we will post it on the Internet for all to see," Obama said to applause. "If any member of my administration does meet with a lobbyist about a Recovery Act project, every American will be able to go online and see what the meeting was about. These are unprecedented restrictions that will help ensure that lobbyists don't stand in the way of our recovery."

Obama's full remarks, along with those of Vice President Biden, are below:

The drumbeat for Timothy Geithner's head -- or maybe it's more like a drip-drip -- is slowly building.

Representative Connie Mack, a Florida Republican, yesterday became the first to publicly call for the treasury secretary to resign in the wake of the AIG bonus fiasco.

Today, Senator Jim Bunning, a Kentucky Republican, said Geithner should resign or be dismissed, saying the former New York Fed chief has "an incestuous relationship with Wall Street.”

“Either one – either way," Bunning said on Fox Business Network. "First of all, I didn’t think he was qualified for the job because of his involvement in TARP and a seat at the table. And then of course, he hasn’t done anything to ease the burden. Where’s the plan? You know, he was going to bring the plan to the banking committee. We still haven’t seen the plan and he’s been in office for six to eight weeks.”

Geithner's boss, President Obama, has stood steadfastly behind him so far, saying Wednesday that he has "complete confidence" in Geithner, who the president said is the hardest working man in Washington.

"I know Washington is all in a tizzy and everybody is pointing fingers at each other and saying it's their fault, the Democrats' fault, the Republicans' fault," Obama said at a town hall meeting in southern California on Wednesday night. "Listen, I'll take responsibility; I'm the president. We didn't grant these contracts, and we've got a lot on our plate, but it is appropriate, when you're in charge, to make sure that stuff doesn't happen like this....So for everybody in Washington who's busy scrambling, trying to figure out how to blame somebody else, just go ahead and talk to me, because it's my job to make sure that we fix these messes, even if I don't make them."

UPDATE: In an interview airing today on CNN, Geithner defended himself, even as he accepted responsibility.

He said that he did not know about the "full scale" of the bonuses until March 10, two days before he informed the White House, "but, you know, it's my responsibility, I was in a position where I didn't know about those sooner, I take full responsibility for that."

"We moved very actively to explore every possible avenue -- legal avenue to address this problem, to make sure that, again, the assistance we were providing was not going to unduly benefit these people," he said.

"And, you know, we moved very quickly. We've made it clear that the payments going forward had to be renegotiated and we're going to make sure that the taxpayer is compensated for any payments we can't recoup. And we're exploring all legal means to recoup those payments."

Geithner also acknowledged that his staff had talked to Senator Chris Dodd, chairman of the Senate Banking Committee, about an executive pay provision in the economic stimulus bill that was changed so that it ended up not blocking the AIG bonuses.

"We expressed concern about this specific version," he told CNN. "We wanted to make sure it was strong enough to survive legal challenge. But we also worked with him to strengthen the overall framework and his bill has this very important provision we’re relying on now to go back and see if we can recoup payments that were made that
there was no legal ability to block."

Geithner said that he, himself, did not speak to Dodd directly about the provision, "but I’m not sure that’s relevant because Treasury staff did express concern about whether this provision was vulnerable to legal challenge."

Geithner brushed off the calls to resign, saying, "I think this just comes with the job.

"If this was not challenging, it wouldn't be consequential. And I feel this deep sense of personal responsibility and obligation and really opportunity to work with this president, this Congress, to try to make this economy stronger, to make sure our financial system never goes through this again," he said.

"People are going to disagree with some of the choices we make, but we have to act. We have no choice but to move."

On day two of his California trip, President Obama highlighted alternative energy this afternoon as one of the most promising avenues to economic recovery.

"The nation that leads on energy will lead the world in the 21st century," he said after touring Southern California Edison's electric vehicle technical center in Pomona, which bills itself as unique for an utility and says it is one of only two facilities approved by the US Energy Department to test electric vehicles.

Obama announced that $2.4 billion will be available to produce next generation plug-in hybrid vehicles and the advanced battery components they need. Consumers who buy plug-in hybrids can claim a tax credit of up to $7,500.

The funding includes, according to the White House:

-- Up to $1.5 billion in grants to US-based manufacturers to produce these highly efficient batteries and their components.

-- Up to $500 million in grants to US-based manufacturers to produce other components needed for electric vehicles, such as electric motors and other components.

-- Up to $400 million to demonstrate and evaluate plug-in hybrids and other electric infrastructure concepts -- like truck stop charging station, electric rail, and training for technicians to build and repair electric vehicles.

"It's always nice to get out of Washington a little bit -- recharge your batteries," Obama joked.

Obama said that California, while bearing the brunt of the recession, is also pointing the way forward with ingenuity and technology. But the United States is in danger of falling behind other countries on solar power, wind energy, and other renewable energy.

Investments in alternative energy will create jobs, wean the country off foreign oil, and help on global warming, the president said.

(His full remarks are below.)

As part of selling the stimulus package, the White House released a list of the money that California has received. It is also below:

Vice President Biden's middle class task force is holding a forum in the Midwest today, and like the first one in Philadelphia, the focus is on green energy as an engine of the economic recovery.

The town hall event is being held at the New Flyer of America Bus Company plant in St. Cloud, Minn., which makes low-emission, alternative-fuel buses. The White House says the plant added more than 90 employees last year, bringing its unionized workforce to 650, who are working around the clock to fulfill a two-year backlog of orders.

“Our task today is to hear directly from middle class folks and answer the questions they have about what the Recovery Act means for them,” Biden said in a statement. “We heard from the experts last time – and now its time to hear directly from those hit hardest by our economic crisis. My hope today is that we answer questions, but also get some ideas for what the federal government can do better.”

Biden is being accompanied by Secretary of Education Arne Duncan, Secretary of Housing and Urban Development Shaun Donovan, Secretary of Transportation Ray LaHood, Secretary of Agriculture Tom Vilsack, and Minnesota Senator Amy Klobuchar.

Senator Christopher Dodd, a Connecticut Democrat who is chairman of the Senate Banking Committee, acknowledged today that his staff agreed to dilute an executive pay provision in the economic stimulus bill that would have applied retroactively to recipients of federal aid -- and possibly blocked the controversial AIG bonuses.

Dodd told CNN the request came from officials at the Treasury Department, whom he did not identify and who said it would cause numerous lawsuits.

Republicans have complained they were frozen out of the final negotiations over the $787 billion stimulus plan. "The fact is that the bill the president signed, which protected the AIG bonuses and others, was written behind closed doors by Democratic leaders of the House and Senate. There was no transparency," said Senator Charles Grassley, the senior Republican on the Senate Finance Committee.

In the CNN interview, Dodd sought to explain what happened: "We wrote the language in the bill to deal with bonuses, golden parachutes, excessive compensation -- executive compensation, that was adopted unanimously by the United States Senate in the stimulus bill.

"That's what I would have liked to have seen maintained in the bill, but for that language there would have been no language in the bill to deal with any of this at all, including language that allowed them to reach back. The administration, it has been widely reported, had problems with that amendment, as others did as well. And they came and said, we'd like to modify that amendment. The alternative, frankly, was that happened to my amendment, what happened to the Wyden-Snowe amendment, and that is it be dropped altogether....

"I was vehemently opposed to that....But again, I want to make the point, there many who were highly critical of the Dodd amendment on executive compensation, excessive compensation. I find it ironic that the very people who were critical of me putting that bill in a month-and-a-half ago are now being critical saying we went too far."

Addressing public outrage over the AIG bonuses, President Obama told a town hall meeting in Costa Mesa, Calif., this evening he is "absolutely committed" to getting the tools to prevent another AIG from happening again.

He quickly broadened his pitch to his economic plans that he said he will "reward hard work" and "not high-flying financial schemes" and will produce true prosperity and not wealth based on speculation.

"I don't need to tell you these are challenging times, you're living it every day," he said.

"We are not only going to get through this crisis. We are going to come out the other side a stronger and more prosperous nation," he vowed.

But, he said, he doesn't know how long it will take to reach the brighter days.

His full prepared remarks are below:

Edward Liddy, chairman and CEO of AIG, told a congressional panel this afternoon that this morning he asked those who received more than $100,000 in highly controversial bonuses to step up and return half of their payments.

Departing significantly from his prepared testimony, Liddy said that some employees have already agreed to give up their entire bonus.

Liddy said that he shares the public and political anger at the "distasteful" bonuses given to the employees who almost drove the insurance giant to ruin.

But trying to calm the furor over the bonuses, Liddy said the payments were necessary to keep the people who can best extract the company from the risky bets that nearly bankrupted it -- and to make sure that taxpayers get repaid the $170 billion and counting in federal aid and that there is not another financial meltdown.

"No one knows better than I that AIG has been the recipient of generous amounts of government aid," Liddy testified.

The unit that caused the problems has taken $1 trillion off the books, but there is still $1.6 trillion to go, he said.

"I'm trying desperately to prevent an uncontrolled collapse of that business."

AIG paid $220 million in retention bonuses in the troubled financial products division, including $165 million in payments Friday that ranged from $1,000 to $6.4 million. New York Attorney General Andrew M. Cuomo reported that 73 people received at least $1 million.

Before leaving for California, President Obama said the AIG bonuses have been consuming attention and "rightfully so."

"They represent what all of us consider an inappropriate use of taxpayer funds," he said on the South Lawn of the White House.

But he said that just as outrageous is the "culture of greed" that led to the bonuses and the meltdown that is forcing the federal government to "clean up AIG's mess."

He said he has spoken to Representative Barney Frank and met with economic team to fast-track legislation to create a body -- similar to the FDIC for banks -- that would protect consumers and creditors of financial firms like AIG.

Frank, chairman of the House Financial Services Committee, asked Liddy to submit the names of those receiving the bonuses, but the CEO said he would only do so if they stayed confidential.

Frank replied that he would not agree with that restriction and would ask the committee to issue subpoenas for the information.

Liddy said he wanted to comply, but feared for the employees' safety, reading one of the threats he said had been received that talked of executing the workers with piano wire.

Representative Stephen Lynch of Massachusetts was among the most aggressive in grilling Liddy.

When Liddy said he took offense at the attacks, saying he wasn't at AIG when the retention bonus contracts were set last March and he would have done them differently -- Lynch replied that offense was intended.

Lynch said many of his constituents have lost nearly the entire value of their retirement plans and are appropriately outraged that some of those responsible for the market meltdown are receiving extra pay.

Earlier, Frank didn't sound too optimistic that angry members of Congress will get what they want.

"Well, I don't have a lot of confidence in Mr. Liddy's view at this point," Frank said this morning on CNN. "When he said that first he couldn't get the money back because they had contractual rights but also that he was worried about not retaining them, it left me unconvinced he's really going to be trying.

"The notion that we want to retain these people, that we want to pay the people who messed it up in the first place so they don't leave, is just backwards to me. I think we would probably be better off if they did leave," the Massachusetts Democrat added.

Frank instead is pushing the idea of suing AIG to get the bonus money back, pointing out that the federal government owns a nearly 80 percent stake in the company after giving it more than $170 billion in aid.

"I still believe that we have a right legally to recover this, because we can assert our ownership rights and say, yes, you may have had a contractual right to a bonus but your rotten performance means you should forfeit it," he said.

He also complained about the bonus system at AIG, which he says rewarded employees who made the company money but didn't penalize them for huge losses -- the equivalent, he said, of heads you win, tails you break even.

Other members of Congress are promoting bills to tax the bonuses to recoup the money.

And Treasury Secretary Timothy Geithner, who is facing tough questions of his own, told congressional leaders Tuesday night that one option is to deduct the bonus money from the latest $30 billion in federal help to AIG.

On CBS, Frank called that inadequate.

In an op-ed piece published in today's Washington Post, Liddy, who took over AIG last September, says he has seen "the bad side of capitalism" and says that "mistakes were made at AIG, and on a scale that few could have imagined possible."

In the article, which he is expected to echo in his testimony to a Financial Services subcommittee today, he acknowledges the anger at the bonuses but says they were necessary. "Make no mistake, had I been chief executive at the time, I would never have approved the retention contracts that were put in place more than a year ago. It was distasteful to have to make these payments. But we concluded that the risks to the company, and therefore the financial system and the economy, were unacceptably high."

Liddy also says that under his watch, total 2008 compensation for the top 47 executives at AIG was 56 percent lower than their total 2007 compensation. "My annual salary is $1," he writes. "My only stake is my reputation."

President Obama added a senior aide today when the Senate confirmed former Dallas mayor Ron Kirk as US trade representative.

The Senate vote was 92-5 for Kirk, who has promised to push other countries to live up to fair trade.

Partly because of tougher vetting and stricter ethics rules, the upper reaches of the administration remains largely unfilled.

The review of Kirk uncovered a tax issue that involved failing to report speech income he donated to his college alma mater, but the issue did not derail his nomination as tax problems did some others.

Vice President Biden announced today that states will receive $100 million in stimulus money to feed low-income older Americans.

The funding is expected to provide nearly 14 million meals nationwide, the White House said.

“Across the country, older Americans depend on senior centers and home delivery programs for regular, healthy meals. Today, more senior citizens are in need, but the programs they depend on are on the brink of reducing their services or closing down,” Biden said in a statement. “The Recovery Act will help ensure older Americans are not forced to choose between paying bills and buying food.”

The stimulus package provides $65 million for meals at senior centers and other community sites, $32 million for home delivered meals, and $3 million for Native American nutrition programs. The funding was initially authored and championed by Senator Edward M. Kennedy of Massachusetts, the White House said.

UPDATE: The offices of Kennedy and Senator John F. Kerry of Massachusetts said that the Bay State will get $2.1 million, $1.4 million for nutrition programs at senior centers, and $700,000 for home-delivered nutrition programs such as “Meals on Wheels."

“One of the true measures of any society is how it cares for its elderly,” Kennedy said in a statement. “These federal funds come at a critical time for seniors in our Commonwealth. Communities and aging services across the state are facing a surge in the need for these services because of the economic crisis. It’s essential to give our seniors the care they need and deserve, and this support will be a lifeline.”

Kerry added, “We know that when the economy’s hurting, seniors living on fixed incomes take a wallop. This is an investment in the quality of life and health of thousands of grandmothers and grandfathers across Massachusetts. It’s more than a hot, nutritious meal, for many it’s a lifeline to the outside world. Senator Kennedy and I will keep fighting for Massachusetts seniors so no one goes hungry and we keep faith with the generation that built our country.”

Connecticut will get more than $1.1 million, according to the Department of Health and Human Services, while Maine, New Hampshire, Rhode Island, and Vermont will get $485,000 each.

As President Obama heads back out on the road to sell his economic plans, he tells his grassroots army that his election wasn't change but only the chance to make change.

In a video released today, he urges them to canvass their neighborhoods this weekend to build support for his $3.6 trillion budget that he says will "lay a foundation for lasting growth and prosperity" by investing in healthcare, education, and renewable energy.

"Passing this budget won't be easy....I'm asking you to head outside this Saturday to knock on some doors, talk to some neighbors, and let them know how important this budget is to our future," he says.

Obama, who plans a town hall meeting later today in Costa Mesa, Calif., also implores his backers to write letters and make phone calls to make their views known. His ambitious spending blueprint has run into skepticism in Congress from both sides of the aisle.

The video was sent in an email by David Plouffe, Obama's former campaign manager who now oversees Organizing for America, the keeper of a nearly 14 million-name e-mail list of supporters that is working out of the Democratic National Committee.

"The budget President Obama has proposed isn't the same old document Washington has come to expect year after year," Plouffe writes in the e-mail. "Right now, we have a once-in-a-lifetime opportunity to finally confront the systemic problems that have held America back for far too long in energy, health care, and education. But it's up to you to get involved and make it happen."

While Obama has repeatedly defended his ambitious agenda against those who argue he should focus on the economy, a majority of Americans in a newly released poll say he is taking on too much.

According to the CNN/Opinion Research Corp. survey, 55 percent said the president has tried to handle more issues than he should, while 43 percent says he has not.

On the other hand, the poll found that 58 percent say Obama's proposals are "about right," while 36 percent say they are "too liberal."

His approval rating in foreign affairs -- 66 percent -- is higher than for his handling of the economy -- 59 percent.

In all the outrage over the bonuses paid to the American International Group executives who almost buried the company, the usually mild-mannered Senator Chuck Grassley went the furthest.

In a radio interview Monday, the Iowa Republican called on AIG executives to follow the Japanese approach toward accepting responsibility for the near collapse of the insurance giant, which has already cost taxpayers more than $170 billion in federal aid.

"I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, 'I'm sorry,' and then either do one of two things: resign or go commit suicide," Grassley said.

Today, Grassley is the one apologizing, sort of.

Asked about the suicide remark on MSNBC, he suggested that it was more of a rhetorical flourish. "You ought to be able to tell rhetoric when you hear it," he said.

Grassley said the point he was making is that he wants the AIG executives to show remorse and contrition for nearly bankrupting their company -- not to accept bonuses.

"I think taxpayers are entitled to that," he said.

Meanwhile, Senator Harry Reid, the top Democrat in the Senate, said today that he will pursue legislation to force the executives to pay back at least some of the $165 million in bonuses.

Congressional Democrats are crafting bills to tax up to 100 percent of bonuses awarded by companies rescued by taxpayer money.

Senator Richard Shelby, the top Republican on the Senate Banking Committee, criticized Treasury Secretary Timothy Geithner for not blocking the bonuses, saying that Geithner either knew or should have known about the payments bonuses.

"I don't know if he should resign over this," Shelby said, according to the Associated Press. "He works for the president of the United States. But I can tell you, this is just another example of where he seems to be out of the loop.

President Obama joined the outrage on Monday, ordering Geithner to pursue every legal avenue to block the payments. The administration is talking about using a pending $30 billion federal loan to recoup or block the bonuses.

Representative Darrell Issa, a California Republican, said today that top White House officials knew about the bonuses ahead of time.

"So they were aware they were going to be paid and it wasn’t until they were paid and the press got wind of it, and obviously made a weekend of it, that they suddenly were outraged,” he said on Fox Business Network.

UPDATE: New York Attorney General Andrew M. Cuomo said today that AIG paid retention bonuses last week of $1 million or more to 73 employees, including 11 who no longer work for the company. The biggest bonus was more than $6.4 million, and the top seven received more than $4 million each.

Contracts written last March guaranteed employees 100 percent of their 2007 bonus amounts for 2008, "despite obvious signs that 2008 performance would be disastrous in comparison to the year before," Cuomo said in a letter today to Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Committee on Financial Services, the Associated Press reports.

Cuomo asked the panel to take up the issue at a hearing scheduled for Wednesday, when AIG's CEO, Edward Liddy, is scheduled to testify.

"AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary's business," Cuomo wrote. But AIG has been unwilling to provide their names, despite a subpoena, making it impossible to see if that's true, Cuomo said.

The AP says that Cuomo asserted that despite their contracts, Financial Products employees agreed to take 2009 salaries of $1 in exchange for receiving their retention bonus packages. He said the fact AIG could negotiate the terms of the payments "flies in the face of AIG's assertion" that it had no choice but to make the contractual bonus payments.

While it's no shocker that nearly 9 in 10 Americans rate the economy as somewhat or very poor, it is noteworthy that poll findings released today show they are more pessimistic about a recovery.

According to the CNN/Opinion Research Corp. survey, only 10 percent of respondents believe the economy will bounce back within the next year, while 32 percent say it will take as long as two years. That compares to 13 percent and 27 percent two months ago.

Even more worrisome, while only a minority of economists are talking about the possibility, 45 percent believe another Great Depression is somewhat or very likely within the next year, up from 38 percent in a December poll.

The survey, conducted March 12-15, has a margin of error of plus or minus 3 percentage points.

President Obama, whose administration has been under fire for doing more for Wall Street than Main Street, plans today to announce more help for small businesses.

Joined by Treasury Secretary Timothy Geithner, Obama will outline a package that includes lower fees for small-business lending and more guarantees for some Small Business Administration loans. It is the latest step by the White House to unfreeze credit so that businesses will expand and either add jobs, or at least not cut them.

Obama and Geithner are also announcing that the Treasury Department will begin directly buying as much as $15 billion in securities backed by SBA loans "to get the credit market moving again, and it will stand ready to purchase new securities to ensure that community banks and credit unions feel confident in extending new loans to local businesses," the White House announced.

"The Obama Administration firmly believes that economic recovery will be driven in large part by America’s small businesses, which have generated about 70 percent of net new jobs annually over the past decade. But as the flow of credit has dried up during this recession, small business owners who were prudent and responsible have been set back by the behavior of others in our financial system who were not," the White House said in a statement.

Geithner urged banks to lend to small businesses and said the federal government will keep closer track.

(Obama's full remarks are below.)

Senator John F. Kerry of Massachusetts praised the proposals, which his office said incorporated provisions he suggested last year to eliminate fees on SBA loans.

“President Obama’s small business package will provide small businesses with access to capital so they can stay afloat and get back in the business of creating jobs,” Kerry said in a statement. “The faster we get small businesses on track the faster our economy will recover. I’m glad that the provisions I wrote and pressed last year as Chairman of the Small Business Committee are now being enacted to help our struggling small businesses. President Obama gets it when it comes to helping small businesses in the toughest economy in decades.”

(The full White House release is below.)

Obama also plans to take his economic message to a different forum this week -- "The Tonight Show with Jay Leno."

Obama will appear Thursday night on the late-night staple, which says it is first appearance of a sitting president on a late night talk show.

Earlier that day, he will tour the Edison International electric vehicle technical center in Pomona, a day after holding a town hall meeting on his economic recovery plans in Costa Mesa.

A new poll reflects the worry and fear that Obama faces on the recession.

The CNN/Opinion Research Corp. survey released this morning says that 63 percent of Americans believe the economy is the most important issue facing the country. No other issue makes double digits.

Also, the poll found that of a range of economic problems, 36 percent are worried about unemployment -- nearly three times the number from a similar poll about a year ago, when inflation was the biggest concern. Only 38 percent were very confident that their employer would not have to resort to layoffs in the next six months, down from 55 percent in the April 2008 survey.

The poll also shows Obama's approval rating, while still high, is dropping: 64 percent, down from 67 percent a month ago, and 76 percent in early February.

On the economy, a smaller number, 59 percent, approve of what Obama is doing. But if the economy doesn't improve over the next year, 54 percent would blame former President Bush and the Republicans and only 32 percent Obama and the Democrats.

Overall, only 11 percent of Americans want Obama to fail, but 32 percent worry that he will.

The new survey was conducted Thursday through Sunday and has a margin of error of plus or minus 3 percentage points.

President Obama said this afternoon that the White House will use the "leverage" from federal aid and "every single legal avenue" to try to block the AIG bonuses that have outraged politicians of all stripes.

"This is a corporation that finds itself in financial distress due to recklessness and greed," he said at an event to announce more aid for small businesses. "Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?"

The bonuses, which were in contracts with executives last year, were to be paid by Sunday, mostly to executives at AIG Financial Products, the unit that put the insurance giant on the brink of bankruptcy with risky bets on securities linked to the housing bubble. AIG has received more than $170 billion in a series of federal rescues that have put the government stake at about 80 percent.

Obama said that Treasury Secretary Timothy Geithner is on the case, trying to resolve the matter with AIG's CEO, Edward Liddy.

"This not just a matter of dollars and cents. It’s about our fundamental values," the president said. "All across the country, there are people who are working hard and meeting their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses....All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules.

"That is an ethic that we have to demand," Obama added. "What this situation also underscores is the need for overall financial regulatory reform, so we don’t find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions, so we've got greater authority to protect the American taxpayer and our financial system in cases such as this."

It's the second time that Obama has publicly, angrily blasted Wall Street for greed. After the last time, the White House and Congress imposed limits on bonuses and pay for executives in companies receiving federal aid.

Facing strong Republican opposition to his budget, President Obama is harnessing much of his campaign operation to push it through Congress.

He is enlisting Organizing for America, the post-election vehicle for his millions of grassroots supporters, plus the Democratic Party and its allies in labor and advocacy groups, to build support for the $3.6 trillion blueprint that includes ambitious proposals on healthcare, energy, education, and more.

Mitch Stewart, director of Organizing for America, urged supporters to go out in their neighborhoods this weekend to build backing for Obama's budget.

"The current debate in Washington over President Obama's budget has made one thing clear -- ensuring our long-term prosperity won't come without a fight," Stewart wrote today in an email.

"Partisan voices and special interests are showing real resistance to President Obama's call for making the necessary reforms and investments in energy, health care, and education. That's why we need to bring the conversation back into homes and communities across America."

Americans United for Change, a coalition of labor and liberal groups, started running a national cable TV ad on Sunday that attacks Republicans for not offering anything but opposition.

"President Obama has proposed a budget plan to turn the page on the failed economic policies of the past – creating jobs and changing the way things are done in Washington," the announcer says. "The Republican response? 'No, no, no.'

"So what kind of budget have the Republicans proposed to get us out of the mess they created? Here are the details," the announcer continues.

There's a blank screen and the sound of crickets chirping.

"That’s right – nothing," the announcer says. "Tell the Republicans that Americans won’t take NO for an answer. Tell them we want our President – and America – to succeed."

Over the weekend, the Democratic National Committee took a similar tack in a new web ad that accuses Republicans of "sitting on the sidelines" during the economic crisis and that jumps on comments that Representative John Boehner, the top House Republican, made to the New York Times saying that his party doesn't have offer an alternative and “ought to get the idea out of their minds that they are legislators.”

"John Boehner’s claim that his Party has no responsibility to legislate or offer any plans of their own - despite the economic crisis facing our country - are exactly the kind of typical Washington political games the American people rejected last November,” DNC spokesman Brad Woodhouse said in a statement.

Last week, the DNC took a page out of the Republican playbook during the presidential campaign and launched a “Party of No” clock that highlights how long Republicans have said “no” instead of offering an alternative to Obama’s budget.

As of today, the clock was at 17 days and counting.

A spokesman for Boehner disputed the DNC ad, saying that Republicans did offer an alternative to the $787 billion stimulus package and blaming Democrats for freezing Republicans out of the legislative debate.

"This web ad may be the most poorly-researched piece I’ve ever seen, especially since the New York Times story the DNC cites completely discredits its entire premise," spokesman Kevin Smith said in a statement. "Mr. Boehner said Republicans will be the party of better solutions on the opening day of this Congress before he handed the gavel to the Speaker, and we have followed through on that promise by offering better alternatives on SCHIP and the stimulus. We will do so again on the budget. Good try, but it doesn’t pass the straight-face test.”

The White House will host a stimulus conference for local officials on Wednesday, following up on a similar event last week for state officials.

Vice President Biden and Earl Devaney, the former Massachusetts police officer who now heads up the recovery package oversight board, will headline the event. President Obama will be out in California holding a town hall meeting.

The day-long conference will be a chance for local officials to suggest ideas and ask questions, but will also be another opportunity for the White House to warn against wasting the money.

Representative Barney Frank today blasted the bonuses that are going to AIG executives whose bad decisions pushed the insurance giant to the edge of going under before a federal bailout.

The $165 million in bonuses was to be paid to the executives by Sunday, and most are going to AIG Financial Products, the unit that sold credit default swaps, the risky contracts that caused massive losses for the insurer. AIG, which lost $61.7 billion for the fourth quarter of last year -- the largest corporate loss in history -- has received more than $170 billion in a series of federal rescues.

Frank, a Massachusetts Democrat who is chairman of the House Financial Services Committee, suggested that if the federal government, which now owns an 80 percent stake in the company, can't rescind the bonuses, it could force some dismissals.

"These people may have a right to their bonuses. They don't have a right to their jobs forever," Frank said on NBC's "Today" show.

"[I]t does appear to me we're rewarding incompetence," he added. "Forget about the legal matter here for a second. These bonuses are going to people who screwed this thing up enormously, who made terrible decisions."

A disgusted Frank said that "some of these people, maybe they should choose between keeping their bonus and keeping their jobs. You can't fire a man for having his legal rights, but I'm ready to look and say, this guy gets a bonus? This is a guy who cost us x billion dollars. Let him live off his bonus and no salary for the future."

Frank said not enough conditions were put on AIG, and dismissed concerns expressed by other financial institutions about strings attached to government aid.

"My answer is good-bye, please leave quickly and send back the money," he said.

Before an audience of top business leaders, President Obama hit back today at those who say he is taking on too much with a far-reaching agenda while the economy burns.

In a speech to the Business Roundtable, Obama said that the "problems in the financial markets, as acute and urgent as they are, are only a part of what threatens our economy."

"We must not use the need to confront them as an excuse to keep ignoring the long-term threats to our prosperity: the cost of our healthcare and our oil addiction; our education deficit, and our fiscal deficit," he added.

"I am not choosing to address these additional challenges just because I feel like it, or because I’m a glutton for punishment. I am doing so because they are fundamental to our economic growth, and to ensuring that we don’t have more crises like this in the future."

Obama argues that only aggressive pushes on healthcare and clean energy, among other priorities, will put a stop to "endless cycles of bubble and bust" and create lasting wealth -- in contrast to the housing bubble that helped plunge the economy into recession.

"Instead, we must build this recovery on a foundation that lasts – on a 21st century infrastructure and a green economy with lower healthcare costs that creates millions of new jobs and new industries; on schools that prepare our children to compete and thrive; on businesses that are free to invest in the next big idea or breakthrough discovery," he said.

"We cannot wait to build this foundation. Putting off these investments for another four years or eight years would be to continue the same irresponsibility that led us to this point. It would be doing exactly what Washington has done for decades. And it will make our recovery more fragile and our future less secure."

His full remarks, and a White House transcript of a question-and-answer session, are below:

The battle over an union organizing bill introduced this week is shaping up to be one of the most expensive on Capitol Hill in recent years.

Just how potentially costly was made clearer today by a campaign finance watchdog group, which looked at both how lobbying and campaign donations from Big Business and Big Labor could play a role in the fate of the bill, which would let workers check a card to show they want to join a union and would give employers less power to force a secret ballot election.

The U.S. Chamber of Commerce, which opposes the "Employee Free Choice Act," spent $144.4 million on lobbying in the 2007-08 election cycle, compared to less than $84 million for all of labor, the nonpartisan Center for Responsive Politics says.

Meanwhile, members of Congress who voted in favor of the bill in 2007 collected 10 times more on average from union political action committees during their careers ($862,065) than those who didn't ($86,538), and those who opposed the bill received more on average from business PACs ($2.5 million), than those who supported the legislation ($1.7 million), the center says.

Vice President Biden and Energy Secretary Chu today detailed a chunk of the $787 billion in stimulus cash -- $8 billion in state and local weatherization and energy efficiency efforts that they say will put 87,000 Americans to work and save families hundreds of dollars a year on their energy bills.

The first installment of the funding – about $780 million -- is to be released in the next few days, they announced.

Massachusetts will eventually get $177 million of the $8 billion, enough to create more than 6,500 jobs in the Bay State, Representative Ed Markey's office said.

The Malden Democrat said the spending would reduce energy bills for consumers, cut global warming pollution, and put people back to work building a clean energy economy. “These funds are the ultimate triple play for the Bay State,” Markey said in a statement. “Thousands of Massachusetts workers will be hired, families’ energy bills will be permanently cut by hundreds of dollars a year, and global warming pollution will be reduced.”

Senators John F. Kerry and Edward M. Kennedy of Massachusetts jointly announced that $122 million will be used for weatherization programs and $55 million for state energy programs.

“We passed an emergency economic recovery package to create jobs, help those who are struggling, and invest in job creators today that also strengthen our country for the long term. This investment in weatherization achieves all three of those goals. Making homes and businesses more energy efficient means lower heating and air conditioning bills for years to come. It means that thousands of Massachusetts families won’t be forced to choose between paying their energy bills and putting food on their tables,” Kerry said in a statement.

“Countless families in the Commonwealth have been struggling with sky-high costs to heat their homes this winter and are being forced to cut back on food, health care, and other necessities just to stay warm, and businesses face a similar squeeze,” Kennedy added in a statement. “These funds to weatherize homes and businesses are an important part of the solution. I was proud to work with Senator Kerry to make sure this initiative was part of the economic stimulus legislation, and I’m optimistic that these funds will make a real difference for families throughout our Commonwealth next winter.”

Even as the buzz grows for the need for a second massive economic stimulus package, President Obama and Vice President Biden huddled with state and local officials today to reinforce the need to spend the approved $787 billion wisely.

The White House is hosting a day-long conference on the recovery package.

Obama told the officials that they have the rare opportunity to stoke the economy and build prosperity with "precious tax dollars" -- but also have the responsibility to live up to taxpayers' trust.

"The American people are behind what we're doing. And the question then becomes, 'Are we going to be able to deliver for them?' " he said.

"My main message to all of you is I think you're up to the task," Obama added, warning again, "if we see money misspent, we're going to put a stop to it." (Read the president's full remarks.)

Biden, who is overseeing the stimulus package, spoke to the officials earlier this morning.

He said the White House will release regulations Friday to further restrict the spending of stimulus money. "No swimming pools in this money," the vice president said.

Biden also repeatedly warned that states' ability to get aid from Congress is on the line. "If we don't get this right folks, this is the end of the opportunity to convince the Congress that anything should go to the states," he said, according to the pool report. (Read the vice president's full remarks.)

But according to the press pool report, some state officials expressed confusion about what role states will play in passing on stimulus money to cities and towns and what reporting requirements they'll face. They also complained that there has been a lack of communication so far between the feds and the state government about projects that have so far been announced.

While the Obama administration is promising unprecedented transparency and accountability, Mitch McConnell, the top Republican in the Senate, called today for the General Accounting Office to regularly audit the spending.

"I am deeply concerned by reports that oversight will stop at the state level once a governor designates the federal money to be spent at the local or municipal level," McConnell wrote in a letter to the acting comptroller general. "The American taxpayer will benefit from full transparency at each step of the process as these funds are disbursed. Furthermore, taxpayers need to know how these entities are spending stimulus funds at the project level. Tracking money only to the state level is insufficient, as it fails to measure the actual expenditure of taxpayer dollars and the projects for which these funds are being spent."

But even though most of the $787 billion hasn't been spent yet, some are saying the faltering economy will need another boost. They could have more ammunition for their cause in the latest jobless numbers.

The Labor Department reported today that first-time requests for unemployment insurance rose to 654,000 last week, and the total number receiving benefits for more than a week increased 5.3 million, the most in at least four decades.

House Speaker Nancy Pelosi, who earlier this week seemed to open the door to a second stimulus bill, all but closed that door today, saying she wanted to give time for the initial package to work.

"I really would like to focus on the first one," she told reporters on Capitol Hill. "I don't think you ever close the door to being prepared for what eventuality may come, but I think that is not a near, near thing."

Before dispatching Treasury Secretary Timothy Geithner to lay the groundwork for the G-20 economic summit next month, President Obama today stressed the need for global action to stem the worldwide recession.

"We can do a really good job here at home with a whole host of policies, but if you continue to see deterioration in the world economy, that's going to set us back," Obama told reporters. "And I think it's very important for the American people to understand that as aggressive as the actions we are taking have been so far, it's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together."

Geithner added, "Everything we do in the United States will be more effective if we have the world moving with us. You know, we're the most productive economy in the world, most productive workers in the world, but they need markets for their products that are expanding, and we have a lot of work to do, but I think we can make a lot of progress."

Obama, seated with Geithner in the Oval Office, also said he has two goals for the G-20 meeting April 2 in London: "to make sure that there is concerted action around the globe to jumpstart the economy" and to move forward on "a regulatory reform agenda that ensures that we don't see these same kinds of systemic risks and the potential for this kind of crisis again in the future."

Their full remarks are below:

Another high-profile backer of President Obama added his voice today to those fretting publicly that the administration is not doing enough -- or taking the right actions -- to shore up the financial system and turn around the economy.

Billionaire investor Warren Buffett said on CNBC that the Obama team is sending mixed some signals about its approach, hurting consumer and market confidence.

"The message has to be very, very clear as to what government will be doing," Buffett said. "And I think we've had, and it's the nature of the political process somewhat, but we've had muddled messages and the American public does not know. They feel they don't know what's going on, and their reaction then is to absolutely pull back."

As the Globe reported on Saturday, there are some Obama supporters and others who say the government should more aggressively take on failing banks, putting them into federal receivership and following the response to the 1980s savings and loan crisis.

Buffett also admonished Republicans for unnecessarily beating up Obama, saying they "have an obligation to regard this as an economic war and realize you need one leader."

UPDATE: White House spokesman Robert Gibbs asserted that Buffett was criticizing Washington as a whole, not Obama in particular. He emphasized instead Buffett's call for Democrats and Republicans to cooperate for the good of the country.

In his daily briefing, Gibbs said that while there's always room for improvement in communicating the right message on the economy, "we have to continue to give people a realistic sense of where this economy is, but also ...we've got to make sure people understand that brighter days are ahead."

"But I think Mr. Buffett would agree that ... that this problem isn't going to be fixed overnight," Gibbs added. "The problems that we dealt with starting in sort of early to mid- September of last year didn't start last summer. Many of those problems started years ago. Many of the systemic problems that were rooted in what ultimately failed took place a while ago."

Another week, another White House conference.

The Obama team announced this afternoon that next Thursday, President Obama and Vice President Biden will hold a "White House Recovery and Reinvestment Act Implementation Conference" on the $787 billion economic stimulus package.

The stated goal: "to ensure that dollars invested and spent as part of the Recovery act are effective, transparent and efficient."

The White House said that each state’s governor is being invited to send their senior official working on the stimulus to share ideas and hear from Cabinet secretaries and administration officials, including Earl Devaney, the former Massachusetts police officer leading the stimulus accountability board.

“States have a huge responsibility in partnering with us to ensure that dollars spent as part of the Recovery Act are spent wisely, with transparency and accountability,” Biden said in a statement. “We’re giving each state a chance to send a high-level representative to interact first-hand with top officials here in Washington. Our hope for this conference is to meet face-to-face with the state officials and streamline this implementation process so we can get our economy running again.”

Obama has already read the riot act to state and local officials, warning them that they'll be called out if they waste the money.

The president hosted a "fiscal responsibility" summit at the White House last week, and on Thursday one on healthcare.

With a flourish, President Obama signed the $787 billion stimulus package into law on Feb. 17. But he's still giving it the hard-sell and hitting back at its critics.

This morning, Obama sang its praises in Columbus, Ohio, at a graduation ceremony for 25 police cadets are joining the force, instead of being laid off before starting their beats, with stimulus money.

With the uniformed cadets arrayed behind him on stage, Obama admonished those who argued that the stimulus was "unwise and unnecessary" to talk to the teachers, nurses, firefighters, and the Columbus cadets who still have their jobs thanks to the plan.

"This country has never responded to a crisis by sitting on the sidelines and hoping for the best," he said, citing the extended unemployment benefits, healthcare provisions, and tax credits that will show up in bigger paychecks April 1.

He also announced that $2 billion in grants for more cops, prosecutors, probation officers, crime prevention programs, and equipment are now being made available. (The White House fact sheet on the money is below.)

But the president also acknowledged that the stimulus plan alone "won't turn economy around and solve every problem." (His full remarks are below.)

His challenge was made starkly obvious by the latest dire jobs report out today.

Obama says the stimulus plan will save or create 3.5 million jobs in the next two years. But the jobs numbers show that even if that happens, the economy won't be back to even.

The unemployment rate jumped to 8.1 percent last month, the highest since late 1983, with the loss of another 651,000 jobs, after cuts of 655,000 in January and 681,000 jobs in December. That means that since the recession began in December 2007, the economy has lost 4.4 million jobs -- what Obama called an "astounding" number.

The Laborers’ International Union of North America made a similar point, saying that more than 2 million construction workers are out of work and their unemployment rate is at 21.4 percent. "The economic recovery plan is a good start but there is a lot more work to do. Even if the recovery plan meets expectations and creates 700,000 construction jobs, there will still be more than 1.3 million construction workers looking for a job," the union's general president, Terry O’Sullivan, said in a statement.

The Alliance for American Manufacturing, noting that another 168,000 manufacturing jobs were lost last month, also says that the stimulus package is not enough to turn around the economy.

"This is a grim moment for American workers," Scott Paul, its executive director, said in a statement. "Washington's priority must be to put people back to work. One time-tested, effective way of doing that is more infrastructure investment using American-made materials. The economic recovery package passed last month was a good first step, but more needs to be done."

In advance of Obama's speech at the graduation, the White House issued a statement from Labor Secretary Hilda Solis on the jobs report:

“Today we learned that our economy lost another 651,000 jobs in February, bringing the unemployment rate to 8.1 percent. 4.4 million Americans have now lost their jobs since this recession began last year, and there are now nearly 3 million Americans who have been unemployed for six months or more.

"This data does not just represent abstract statistics. Rather it illustrates the struggles of millions of Americans who do not know how they will raise their families, or pay their bills and mortgages. They are the central focus of this Administration’s economic policies, and why we are moving swiftly and aggressively to jumpstart job creation and grow our economy.

"As part of the American Recovery and Reinvestment Act, President Obama and I have already moved to increase unemployment insurance benefits and to extend the duration of unemployment insurance. In addition, I am announcing today that the Labor Department is making available more than 3 and a half billion dollars to states for education, training and reemployment services.

"We will continue to do whatever is necessary to break the destructive cycle of job loss in this country and put Americans back to work. That includes our plans to re-start lending for consumers and small businesses, help responsible homeowners pay their mortgages and re-finance their homes, and address the long-term economic challenges we face—including the high cost of health care, our dependence on oil, and the state of our schools.

"From the day this Administration began, we knew that solving the economic crisis we were presented with would not be easy and would not happen overnight. But the President and I believe that this nation has both the resources and the will to meet this challenge and emerge stronger and more prosperous than before.”

AFL-CIO president John Sweeney issued a statement praising the stimulus package, but asserted that to rebuild a "robust real economy, with good jobs and a strong middle class, also demands attention to health care, education, pensions, climate change and other issues."

"America's steepest drop in employment in over 30 years shows just how long the road to economic recovery will be," Sweeney said. "The pain of February's widespread job losses was felt across virtually every employment sector -- with manufacturing and construction especially hard hit. Unemployment among African American men hit 14.9 percent last month – almost double the level a year ago.

"The economy has spiraled into a vicious downward cycle: Workers are losing their jobs and can't maintain their mortgage payments. Housing foreclosures are exacerbating the downward slide in housing prices and tightening credit. Frozen credit markets are forcing firms to lay off more workers. Our country has a tough path ahead as we work to create jobs, restore the middle class and ensure that our economy works for everyone, once again."

Republicans on Capitol Hill are on the warpath about a bill that would allow bankruptcy judges change mortgages to help homeowners stay in their houses.

The Democratic-controlled House today approved the measure, which would let judges reduce the principal owed, cut the interest rate, or extend the length of the loan.

House GOP leader John Boehner's office calls the legislation a "textbook example" of why Americans are increasingly fed up by the series of bailouts and rescues coming out of Washington.

"Disingenuously called the 'Helping Families Save their Homes Act,' the measure forces those who have acted responsibly to subsidize scam artists, speculators, and those who knowingly made bad decisions," Boehner's office said in an e-mail alert. "And it repeals a century-old rule that prohibits what is commonly called “cramdown.” Cramdown allows bankruptcy judges to rewrite the mortgage terms on an individual’s primary residence, and lifting the prohibition is expected to add even more uncertainty to a housing market already in turmoil and will increase mortgage costs at a time when homeowners can afford it least."

The message from Boehner's office gets in a slap at fellow House members, who could be allies on some issues: conservative Democrats, mostly from the South, known as the Blue Dog coalition. They had balked at the bill last week.

"However, as is often the case, Democratic leaders made a few cosmetic changes to bill, and the Blue Dogs heeled, proving once again that they are all bark and no bite."

UPDATE: After the House voted 234-191 this afternoon to approve the bill, Boehner issued a withering critique, saying the measure "forces taxpayers to reward irresponsible behavior...and will prolong the housing crisis."

“Owning a home is the heart and soul of the American Dream, and Republicans believe that we need to help families who acted responsibly stay in their homes. But this legislation doesn’t do that. What it really does is punish those who played by the rules to subsidize those who didn’t. Democrats even defeated a Republican proposal that would have protected taxpayers from bailing out those who lied on their mortgage applications. No wonder we are seeing more and more ‘taxpayer tea parties’ taking place all across America. Taxpayers are fed up with what they are seeing in Washington," he said in a statement.

“Nine out of every 10 homeowners are playing by the rules and making their payments. Republicans believe those who acted responsibly and need help should get it, but we should not bail out scam artists by forcing taxpayers to subsidize irresponsible behavior. It’s time for Democrats and Republicans to work together on a better solution to preserve the American Dream for those who play by the rules.”

Senator John F. Kerry, who has added global warming atop the Foreign Relations Committee's to-do list, told industry officials and others today that a clean energy revolution is coming -- and they need to get on board.

"We are in the midst of a fundamental shift in our national and governmental priorities that could one day be remembered—alongside the presidencies of Roosevelt, Johnson, and Reagan—as truly transformational," Kerry said at a forum sponsored by Hitachi and featuring panels organized by the American Association for the Advancement of Science and the Brookings Institution.

Kerry noted that the economic stimulus package includes $80 billion for alternative energy. He also pointed out that President Obama, in his address to a joint session of Congress last week and in his proposed budget, called for capping carbon emissions and creating a market for the sale of pollution credits.

"Cap-and-trade is no longer an academic question," Kerry said, according to prepared remarks. "The President and leadership in both houses of Congress are on board to make it a reality, and you need to start preparing to take advantage of it."

"If passed, this will constitute the most significant realignment of our energy system in US history," the Massachusetts lawmaker added. "For the first time ever, America will put a price on carbon that will light a fire under our green entrepreneurs, drive development of new clean technologies, re-energize our economy, and tackle global climate change—all at the same time. This should not be frightening. Far from it: the change and the challenge may both be tremendous, but so are the possibilities. I truly believe that the next four or five Googles are in the energy sector, staring us in the face."

His full prepared remarks are below:

Massachusetts Attorney General Martha Coakley is getting her say today as the Environmental Protection Agency holds a hearing on whether to allow states to set tougher auto emissions standards than the federal government.

In his first week in office, President Obama ordered the EPA to reconsider a petition from Massachusetts and more than a dozen other states that want to enact rules by California. The Bush administration had blocked the request. Obama's order was part of a broader push to wean the country from foreign oil and cut carbon emissions to lessen global warming, overturning skepticism from the Bush years.

"Since the EPA will ultimately have to set federal standards at least as strict as those already set by California, the debate about whether there should be one set of national standards is in the end much ado about nothing,” Coakley said in a statement. “We are urging the agency to grant the California waiver while it proceeds to put federal standards in place that will establish national standards at least as strict.”

In its comments to the EPA, Coakley said her office is focusing on one policy issue: whether there should be only one set of nationwide auto emissions standards to address arguments from the auto industry that a single set of standards is necessary to help the battered industry. The comments say that the EPA can achieve the automakers’ goal of having national standards by adopting ones at least as strict as those set by California.

Coakley also urges the EPA not to undermine states' authority to adopt stricter standards, arguing that the current rules have "driven technological and regulatory innovation, and economic and environmental progress."

A coalition of liberal and union advocacy groups that lobbied aggressively for President Obama's economic stimulus package announced today that it will mount a similar effort to push through his budget.

The groups plan similar grassroots events, phone banks, and e-mails campaigns targeting members of Congress, as well as paid advertising. More than 40 major organizations have so far signed onto the $5 million to $7 million campaign, Americans United for Change said.

"Make no mistake: the Obama budget is real change – the change that Americans voted for in November," Chuck Loveless, legislative director for the American Federation of State, County, and Municipal Employees, said in a statement. "As we were during the economic recovery plan, AFSCME will be a leader in the fight to pass the Obama agenda. Our members make America happen. And America deserves nothing less.”

Obama's $3.6 trillion spending outline is facing stiff opposition in Congress because of tax hikes on the wealthy, expansions of a range of government programs, and projected trillion-dollar deficits.

The joint statement for the "Rebuild and Renew America Now!" campaign and the list of participating groups is below:

President Obama this morning announced a retooling of how government contracts are awarded to ramp up competition, changes that the White House says would save taxpayers about $40 billion a year.

He said while huge investments are needed to get the economy turned around, the government must make sure it spends all its money wisely.

"It starts with reforming our broken system of government contracting," he said.

Government spending on goods and services increased from $200 billion in 2000 to more than $500 billion in 2008 and too much of that spending was plagued by cost overruns or outright fraud, the president said.

Obama signed a presidential memo ordering his budget director, Peter Orszag, to work with Cabinet and agency chiefs to come up by July 1 with a way to review existing contracts for waste or fraud.

By the end of September, Orszag is to come up with new rules designed to make it more difficult for contractors to cheat taxpayers by strengthening oversight and ending unnecessary no-bid contracts and "cost-plus" contracts that allow their price tag to escalate.

Obama shared the stage with his Republican presidential rival John McCain, who highlighted the contracting problems last week by pointing out that the new fleet of presidential helicopters could cost as much as Air Force One.

Obama said he endorsed the goals of the bipartisan effort on defense procurement reform led by McCain and Democratic Senator Carl Levin. Obama noted that a study last year by the Government Accountability Office of 95 major defense acquisitions projects found cost overruns of 26 percent, totaling $295 billion over the life of the projects.

Obama said that William Lynn III, the former Raytheon lobbyist who is now deputy defense secretary, will help lead the procurement reform in the Pentagon.

Ironically, McCain helped lead the opposition to Lynn, who had to receive a White House waiver from ethics rules and to pledge to recuse himself from decisions affecting the Waltham-based defense contractor to win confirmation.

The White House fact sheet is below, followed by the president's remarks:

President Obama thanks Big Labor for its help pushing through his economic stimulus package in a video message tonight to the AFL-CIO executive council gathering in Miami.

"We have already started to change America on behalf of working people," the president says, according to remarks released by the White House.

Obama extols what's in the stimulus plan for workers, and also bills he has signed into law on pay discrimination and an expansion of a children's health program.

Unions provided millions of dollars and tens of thousands of volunteers during the campaign, and Obama says he's now repaying their trust.

"I do not view the labor movement as part of the problem," he adds. "To me, and to my administration, labor unions are a big part of the solution. We need to level the playing field for workers and the unions that represent their interests – because we cannot have a strong middle class without a strong labor movement."

His full prepared remarks are below:

To all those scared to death about the tumbling stock market, President Obama played financial adviser today, offering the age-old counsel: Buy low and sell high.

The president, in a departure from usual form, directly addressed the swoon in the stock market. The benchmark Dow Jones industrial fell Monday to the lowest level in 12 years -- and more than 50 percent off its all-time high in October 2007 -- and is down slightly today.

Obama waved off the minute-to-minute ups and downs in the market, comparing them to tracking polls that often turned out not to predict real outcomes during the presidential race.

"What I'm looking at is not the day-to-day gyrations of the stock market but the long-term ability for the United States and the entire world economy to regain its footing," he said during an Oval Office mini press conference with British Prime Minister Gordon Brown. "And, you know, the stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong."

"Now, having said that, the banking system has been dealt a heavy blow," he added. "And so there are a lot of losses that are working their way through the system. And it's not surprising that the market is hurting as a consequence. In fact, I think what we're seeing is that as people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that there's going to be a natural reaction.

"On the other hand, what you're now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."

UPDATE: Asked whether the president was "cheerleading" for the stock market, White House spokesman Robert Gibbs said this afternoon that Obama's remarks were in line with what he has said that "brighter days for our economy are ahead if we take important steps and make important decisions now about addressing many of the problems and challenges that we face."

Obama is "obviously concerned about any number of economic indicators," including stock trends, Gibbs told reporters at the daily briefing.

Pressed on the issue, Gibbs tried a joke: "I will ask him if he's got any particular tips for you, Jeff. Maybe I should have cornered him and gotten a few of my own."

Senator John McCain's latest bid to strip earmarks from spending bills failed today.

On a 63-32 vote, the Senate rejected a proposal to remove nearly 9,000 earmarks from the $410 billion spending bill to fund government operations through the end of September. The proposal would have also frozen spending at last year's levels.

Senators Susan Collins and Olympia Snowe of Maine, who also broke from the party on the stimulus package, were among the eight Republicans who voted against McCain.

McCain has criticized President Obama for what he says is going against his campaign pledge against earmarks -- what critics call pork-barrel projects.

Laying the groundwork for the first meeting today of the White House task force on the middle class, Vice President Biden is promoting the promise of "green jobs" to stoke the economic recovery.

The $787 billion economic stimulus package includes chunks for alternative energy, as does President Obama's proposed budget for next fiscal year.

"Investing in green jobs also means keeping up with the modern economy. At a time when good jobs at good wages are harder and harder to come by, we must find new, innovative opportunities," Biden wrote in an op-ed piece published in today's Philadelphia Inquirer. "According to the Council of Economic Advisers, green jobs pay 10 to 20 percent more than other jobs. They also are more likely to be union jobs. Building a new power grid, manufacturing solar panels, weatherizing homes and office buildings, and renovating schools are just a few of the ways to create high-quality green jobs that strengthen the foundation of this country."

Biden is chairman of the task force, meeting this afternoon in Philadelphia.

The full op-ed, provided by the White House, is below, followed by Biden's remarks at the meeting:

A labor union and progressive group launched a new national cable TV ad that tries to protect President Obama from Republican attacks by arguing that the GOP takes it marching orders from conservative radio icon Rush Limbaugh.

The spot from AFSCME and Americans United for Change says that congressional Republicans followed Limbaugh's lead in nearly unanimously opposing the $787 billion stimulus package, and are now echoing his opposition to the budget outline Obama unveiled Thursday.

The ad shows a succession of Republican leaders saying, "No" to Obama's proposals, then shows Limbaugh saying on his radio show that he wants Obama "to fail."

Alex Conant, spokesman for the Republican National Committee, responded: “The Democrats are running a permanent campaign rather than doing the bipartisan work of governing. These ads are part of the Democrats’ larger strategy to do something, anything to try to take the focus of their massive spending binge.”

Unveiling his first budget outline, President Obama this morning said it is "an honest accounting of where we are and where we intend to go" -- including the full cost of the wars in Afghanistan and Iraq -- and focuses on basics, not items that are "nice to have."

While the country needs to add to the federal deficit in the short term to get the economy going, fiscal discipline is needed for long-term prosperity, Obama said. And that includes investments in education, energy, and healthcare that will create savings later on.

His $3.55 trillion spending plan is for the fiscal year that begins Oct. 1. It projects a federal deficit in the current fiscal year that ends Sept. 30 of a record-shattering $1.75 trillion, up from the most recent estimate of $1.3 trillion. As a proportion of the full economy, the deficit would be the highest since World War II, and the White House projects it would hover around $1 trillion for the next two years before starting to decline to $533 billion in 2013.

Obama is also pledging to cut the federal deficit in half by the end of his first term, telling Congress and the nation that his administration has already identified $2 trillion in savings over the next decade.

But White House budget director Peter Orszag told reporters today that the $2 trillion is actually $1 trillion in spending cuts and $1 trillion in tax and fee increases.

Republicans quickly trashed Obama's budget, saying it doesn't make sense to raise taxes during a recession and criticizing the level of spending.

"The era of big government is back, and Democrats want you to pay for it,” said House Republican Leader John Boehner of Ohio said at a news conference. Obama is starting to make former President George W. Bush -- whom even fellow Republicans have assailed for dramatically increasing the federal deficit -- "look like a piker when it comes to spending," Boehner added.

Senator Judd Gregg of New Hamphire, who almost joined Obama's cabinet as commerce secretary, said Obama's plan doesn't do enough to trim the deficit.

"It's like you take four steps back and then only take two steps forward," he told reporters. "I mean, basically, that's what's happening here. We're taking four steps back in the deficit fight, and then we're only taking two steps forward in the deficit fight, when the -- when if you were just to stay on the basic course you were on, you would take three steps forward."

UPDATE: Many Democrats welcomed the budget as a badly-needed change of direction after the Bush administration.

“After eight years of missed opportunities and slight of hand budget gimmicks to hide reality, this budget reflects an honest change in Washington that begins to reckon with our biggest challenges,” Senator John F. Kerry said in a statement.

“Finally we have a President who is up front about the true costs of war in Iraq and Afghanistan, and finally we have a President grappling with big challenges here at home. For too long, our tax system has rewarded exorbitant wealth over hard work. That ends today. The President’s budget will give 95% of Americans a permanent tax cut to give relief to millions struggling. The more than $630 billion committed to health care will cut costs and provide a down payment towards covering every American. The cap and trade proposal demonstrates that real global climate change solutions are a top priority for this President. This is nothing short of a sober, honest assessment of where our country stands and a tough, realistic plan to get our budget in line with our priorities.”

Obama's budget accounts for part of the cost of the $787 billion stimulus plan. It also accounts for as much as $750 billion more in aid to financial institutions, more than doubling the $700 billion financial rescue plan passed by Congress last October.

Obama also wants to set aside $634 billion over 10 years -- generated from higher taxes on the wealthy and cuts in payments to insurers, hospitals, and physicians -- as a down payment for a healthcare overhaul designed to cover more of the 47 million Americans without insurance. Advocates are calling the reserve fund the clearest sign yet that Obama is serious about taking on healthcare, even as he still tries to revive the recession-bound economy.

Obama is seeking an additional $75 billion for the wars through September, on top of the $40 billion already appropriated by Congress. The administration will also ask for $130 billion for Iraq and Afghanistan in fiscal 2010 and will budget the costs of operations in Iraq and Afghanistan at $50 billion annually over the next several years.

The plan also contains a controversial proposal to raise hundreds of billions of dollars by auctioning off permits to exceed carbon emissions caps, a major policy step on global warming.

Obama's 140-page budget outline is to be followed by a more detailed plan in mid- to late April, which he said will include the results of a line-by-line scrubbing of the budget for waste and inefficiency.

The president wants Congress to extend the $400 annual tax cut in the stimulus package that is to start showing up in most workers' paychecks in April. He also wants to extend the tax cuts passed in 2001 and 2003 for couples earning less than $250,000 per year. Those tax cuts were due to expire at the end of 2010.

The tax cuts for couples making more than $250,000 a year, however, would end as scheduled, increasing the tax rate on earnings above that amount to rise from 35 percent to 39.6 percent. Under Obama's plan, wealthier people would also face cuts in itemized deductions for mortgage interest, charitable contributions, local taxes, and other expenses -- to 28 percent from the 35 percent they can claim now.

Obama's full remarks are below:

President Obama announced this morning that another part of the $787 billion economic stimulus package kicks in today: subsidies for those who have been recently laid off to keep their healthcare coverage.

The program is known as COBRA, and Obama said the provision in the stimulus plan will help 7 million Americans.

"That's 7 million Americans who will have one less thing to worry about when they go to sleep at night," he said before unveiling his first budget blueprint . "Equally important, it prevents a further downward spiral in our economy by ensuring that these families don't fall further behind because of mounting health care bills. And it is a direct result of the American Recovery and Reinvestment Act that I signed into law the other week -- a recovery plan that has only just begun to yield benefits for the American people."

So far since he signed the bill last week, the states have also received $15 billion for Medicaid, the healthcare program for the poor, and $10 billion for making homes more energy-efficient and checking them for lead contamination.

Former President Bill Clinton was perhaps the most notable voice to advise President Obama to lighten up a little and be more hopeful about the economy.

With his address Tuesday night to a joint session of Congress, Obama struck just the right tone and pulled off "a real success," Clinton told Greg Sargent ofWhoRunsGov.com today.

Obama succeeded in telling “the American people that we’re gonna get out of this and it’s gonna be alright in the end,” Clinton said in the interview. “I think he drew the right balance — he didn’t sugar-coat anything, he didn’t say it’s gonna get better tomorrow.”

Following up on his exhortation to fix the fundamental causes of the economic crisis, President Obama plans to huddle today with Treasury Secretary Timothy Geithner and key members of Congress to discuss "the critical need for financial regulatory reform."

He plans to meet in the Oval Office with the chairmen and ranking members of the Senate Banking and House Financial Services committees, which have overseen the financial rescue that is costing taxpayers $700 billion and counting. Senator Chris Dodd of Connecticut leads the banking panel and Representative Barney Frank of Massachusetts the financial services panel.

UPDATE: In prepared remarks obtained by the Associated Press, the president offers no specific regulations he wants, but talks of "core principles," including consumer protections and accountability for executives.

"Let me be clear: the choice we face is not between an oppressive government-run economy and a chaotic and unforgiving capitalism," Obama says, according to the remarks. "Rather, strong financial markets require clear rules of the road, not to hinder financial institutions, but to protect consumers and investors."

An administration official told the AP that Obama wants Congress to work on the regulatory overhaul in the next several weeks, before April's meeting of the world's 20 major economies. "We must recognize that the challenges we face are not just American challenges, they are global challenges," Obama says, according to the prepared excerpts. "So as we work to set high regulatory standards here in the U.S., we must challenge the world to do the same."

In his speech Tuesday night to a joint session of Congress, Obama talked of a "day of reckoning" after "an era where too often short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election....Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

Obama said that "to ensure that a crisis of this magnitude never happens again, I ask Congress to move quickly on legislation that will finally reform our outdated regulatory system."

"It is time -- it is time to put in place tough, new common-sense rules of the road so that our financial market rewards drive and innovation, and punishes short-cuts and abuse," he added.

Even as he tried to raise the nation's sights to take on ambitious and costly initiatives in energy, education, and healthcare, he warned that more taxpayer aid will be needed to get banks on sounder footing and credit flowing again to consumers and businesses.

"It's not about helping banks; it's about helping people," he said. "Because when credit is available again, that young family can finally buy a new home. And then some company will hire workers to build it. And then those workers will have money to spend. And if they can get a loan, too, maybe they'll finally buy that car, or open their own business. Investors will return to the market, and American families will see their retirement secured once more. Slowly, but surely, confidence will return, and our economy will recover."

"So I ask this Congress to join me in doing whatever proves necessary. Because we cannot consign our nation to an open-ended recession."

Obama's remarks after the meeting are below:

President Obama can only hope the third time is a charm for his commerce secretary.

This morning, he officially nominated former Washington Governor Gary Locke for the post, saying he has lived the American Dream and "shares my commitment to do whatever it takes to keep it alive in our time."

Locke, the first elected Chinese-American governor, is Obama's third choice for the job, which deals with trade and oversees the politically touchy Census. As governor, Locke was deeply involved in Pacific Rim trade, a key growth area for the United States.

Locke, a 59-year-old Democrat, said he will push Obama's agenda, saying, "The American people and I fully support you and have confidence in your bold strategy to turn our economy around."

Obama's first pick, New Mexico Governor Bill Richardson, withdrew amid an investigation into state contracts. The president's second, Republican Senator Judd Gregg of New Hampshire, pulled out after deciding he disagreed with Obama too much on the economic stimulus and other issues.

"I'm sure it's not lost on anyone that we've tried this a couple of times. But I'm a big believer in keeping at something until you get it right," Obama said.

Their full remarks are below, as are the official White House statement and Locke's mini-biography:

"Nobody messes with Joe," President Obama declared Tuesday night, noting that Vice President Biden is leading the effort to make sure the $787 billion economic stimulus package doesn't go to waste.

"Isn't that right? Obama ad-libbed as members of Congress applauded. "They don't mess with you."

Today, Biden took that message to the morning news shows. On ABC's "Good Morning America," he said the money "cannot be squandered" and warned that if states don't use the money as intended, the government may "use the television and the radio and the media to embarrass them for them not doing what they're supposed to do."

Meeting later with cabinet members, Biden said he plans to use "the moral approbation of this office" to make sure the stimulus cash is wisely spent. And Earl Devaney, the former Massachusetts police officer heading a stimulus plan accountability board, said he will push each of the 50 states to name a watchdog to oversee spending, the Associated Press reported.

According to a press pool report, Biden said of Devaney, "They said last night 'Don't mess with Joe.' Well, this is the guy to not mess with."

Biden said while there is no "magic bullet" for quickly reviving the economy, the stimulus is designed to "drop kick" the economy out of recession.

The full remarks of Biden and Devaney, as provided by the White House, are below:

The White House just released a very preliminary excerpt from President Obama's speech tonight to Congress in which he tries to inspire confidence among Americans.

"While our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before," Obama plans to say.

"The weight of this crisis will not determine the destiny of this nation. The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more."

UPDATE: This evening, the White House released more advance excerpts of Obama's speech:

We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.

Well that day of reckoning has arrived, and the time to take charge of our future is here.

Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight.

…..

The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short-term. But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit. That is our responsibility.

In the next few days, I will submit a budget to Congress. So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America – as a blueprint for our future.

My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.

Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.

But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.

….

Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we’re starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade.

In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use. We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.


….

I know that we haven’t agreed on every issue thus far, and there are surely times in the future when we will part ways. But I also know that every American who is sitting here tonight loves this country and wants it to succeed. That must be the starting point for every debate we have in the coming months, and where we return after those debates are done. That is the foundation on which the American people expect us to build common ground.

….


But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.

I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn’t tell anyone, but when the local newspaper found out, he simply said, ''I knew some of these people since I was 7 years old. I didn't feel right getting the money myself.”

I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community – how it can bring jobs and businesses to a place where piles of bricks and rubble once lay. “The tragedy was terrible,” said one of the men who helped them rebuild. “But the folks here know that it also provided an incredible opportunity.”

And I think about Ty’Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina – a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom. She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room. She even asked her principal for the money to buy a stamp. The letter asks us for help, and says, “We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world. We are not quitters.”

The initial excerpts were released soon after the Republican National Committee released excerpts of the response that Louisiana Governor Bobby Jindal will deliver after Obama's speech.

Jindal also offers optimism for the future, a hand to Obama for bipartisan cooperation and criticism of Democrats in Congress, and an acknowledgement that Republicans strayed from fiscal conservatism.

His excerpts:

“As I grew up, my mom and dad taught me the values that attracted them to this country - and they instilled in me an immigrant’s wonder at the greatness of America. As a child, I remember going to the grocery store with my dad. Growing up in India, he had seen extreme poverty. And as we walked through the aisles, looking at the endless variety on the shelves, he would tell me: ‘Bobby, Americans can do anything.’ I still believe that to this day.
…

“Republicans are ready to work with the new President to provide those solutions. Here in my state of Louisiana, we don’t care what party you belong to if you have good ideas to make life better for our people. We need more of that attitude from both Democrats and Republicans in our nation’s capital. All of us want our economy to recover and our nation to prosper. So where we agree, Republicans must be the President’s strongest partners. And where we disagree, Republicans have a responsibility to be candid and offer better ideas for a path forward.
…

“The strength of America is not found in our government. It is found in the compassionate hearts and enterprising spirit of our citizens.
…

“To solve our current problems, Washington must lead. But the way to lead is not to raise taxes and put more money and power in hands of Washington politicians. The way to lead is by empowering you - the American people. Because we believe that Americans can do anything.
…

“Democratic leaders say their legislation will grow the economy. What it will do is grow the government, increase our taxes down the line, and saddle future generations with debt. Who among us would ask our children for a loan, so we could spend money we do not have, on things we do not need? That is precisely what the Democrats in Congress just did. It’s irresponsible. And it’s no way to strengthen our economy, create jobs, or build a prosperous future for our children.
…

“In recent years, these distinctions in philosophy became less clear - because our party got away from its principles. You elected Republicans to champion limited government, fiscal discipline, and personal responsibility. Instead, Republicans went along with earmarks and big government spending in Washington. Republicans lost your trust - and rightly so.
…

“A few weeks ago, the President warned that our nation is facing a crisis that he said ‘we may not be able to reverse.’ Our troubles are real, to be sure. But don’t let anyone tell you that we cannot recover - or that America’s best days are behind her.”

President Obama finally has a labor secretary, leaving his picks at commerce and health and human services still to go to complete his cabinet.

The Senate late this afternoon voted 80-17 to confirm California congresswoman Hilda Solis at labor, two months after Obama nominated her. Her nomination was held up by Republican concerns over her pro-union activities, then by reports of tax liens against her husband's business.

Labor groups have been aggressively pushing for Solis, and immediately applauded her confirmation.

"The confirmation of Rep. Hilda Solis is a huge victory: finally Americans will have a Secretary of Labor who represents working people, not wealthy CEO’s. It is also a historic moment as Rep. Solis becomes the first Hispanic Secretary of Labor," AFL-CIO president John Sweeney said in a statement.

"The delay of Rep. Solis’s nomination for partisan and ideological reasons was overcome by the grassroots support of millions of Americans who are struggling and desperately need a secretary of labor who will be their voice," he added, calling her "uniquely qualified to help struggling families through these difficult economic times because she knows firsthand what they are going through."

"She grew up in a working class family and understands what programs our nation’s workers need the most. She will fight to improve skills development and job creation programs, including development of 'green collar' jobs," Sweeney added. "She will work to assure that workers get the pay they have earned and that they work in safe, healthy, and fair workplaces. She’s ready to address the retirement security crisis and will work hard to protect every worker from job discrimination, regardless of race, sex, veteran status, or disability."

"In the midst of this economic crisis – when thousands of jobs are lost every day – it is crucial to make the economy work for working people again. Americans need a plan to help put families back to work, back in their homes, and back on the path of prosperity. In addition to bold economic recovery plan, America’s workers need a strong Department of Labor," added Anna Burger, chairwoman of the Change to Win coalition.

“Hilda Solis is the right person to lead that charge. She has long been a champion of working families. She has fought for fair pay for women, health care for children, green jobs and the right for workers to have a voice in the workplace to improve wages, conditions and benefits. We applaud Congress for their confirmation of Hilda Solis as U.S. Secretary of Labor and look forward to working alongside her. We are confident that she will help restore the economy, rebuild the middle class and renew the American Dream for America’s workers.”

The Communications Workers of America, along with other unions, highlighted her support for a bill that would make it easier for workers to organize.

“Secretary Solis has long been an effective voice for workers’ rights,” said CWA President Larry Cohen.

Ellen R. Malcolm, president of EMILY's List, which supports female candidates who back abortion rights, added her congratulations.

"Today, I congratulate Secretary Hilda Solis and wish her well as our new Secretary of Labor. Along with the thousands of EMILY’s List members who petitioned Senate Republicans standing in her way, I am heartened to see the Senate confirm Solis and put progress ahead of partisan politics. It is critical that the Department of Labor have a strong, intelligent, and effective leader like Secretary Solis to advocate for our nation’s workers during these tough economic times,” she said in a statement.

Tom Daschle withdrew at health and human services over tax problems, and though reports have suggested Kansas Governor Kathleen Sebelius is in line for the appointment, Obama has yet to announce it.

As soon as Wednesday, Obama is expected to nominate former Washington Governor Gary Locke as his third try at Commerce. New Mexico Governor Bill Richardson withdrew over an investigation into state contracts, then Republican Senator Judd Gregg of New Hampshire jilted Obama at the political altar, saying he had too many policy differences with the new Democratic president.

Jumping on taxpayer anger over junkets and other lavish spending by firms receiving federal aid, Senator John F. Kerry announced today that he plans to introduce legislation to end such extravagance.

The Massachusetts Democrat, a senior member of the Senate Finance Committee, said his "TARP Taxpayer Protection and Corporate Responsibility Act" would prevent any recipient of financial bailout funds from hosting, sponsoring, or paying for conferences, holiday parties, and entertainment events. Any TARP recipient that misused the funds would be fined and required to reimburse the government.

Kerry’s office said he was responding to reports that Northern Trust Bank, which received $1.6 billion in bailout assistance, hosted hundreds of employees and clients at expensive hotels in Beverly Hills and threw Hollywood parties that featured performances by Chicago and Sheryl Crow. The bank recently laid off almost 450 workers.

Northern Trust issued a statement saying that the event is an important part of its marketing and was not paid for using government money.

“I’m sick and tired of picking up the newspaper and reading about another idiotic abuse of taxpayer money while our country is on the brink,” Kerry said in a statement. “Americans who play by the rules are losing their jobs and struggling to pay their mortgages. The companies that came to Congress in desperate need of help to stay afloat become their own worst enemies when they pull stunts like this. It’s an embarrassment that this legislation is necessary, but some companies clearly need a reality check to get their priorities straight so taxpayer money is used to get their house in order and not to pay for lavish parties. Congress has zero tolerance for this kind of excess.”

Representative Barney Frank of Massachusetts added his outrage as well.

As chairman of the House Financial Services Committee, he and 17 other Democrats wrote to Northern Trust, demanding that it repay money spent on the parties, hotel rooms, and golf tournament.

"At a time when millions of homeowners are facing foreclosure, businesses and consumers are in dire need of credit, and the government is trying to keep financial institutions -- including yours -- alive with billions in taxpayer funds, this behavior demonstrates extraordinary levels of irresponsibility and arrogance," the lawmakers said in the letter to Northern Trust Chief Executive Frederick Waddell, Reuters reports.

As he prepares to give his version of the State of the Union tonight, President Obama continues to hold the confidence of most Americans, even though support is dividing again along partisan fault lines.

Two new polls published today show his approval ratings in the political stratosphere, relatively speaking.

A Washington Post/ABC News survey puts his approval rating at 68 percent and says that 64 percent support the $787 billion stimulus package he championed.

A New York Times/CBS survey puts his approval rating at 63 percent and an even higher 77 percent said they are optimistic about the next four years under an Obama administration.

New findings released from a CNN/Opinion Research Corp. survey last week found that expectations are high for Obama's 9 p.m. address to a joint session of Congress, though not as high as they had been. In the recent survey, 28 percent said they expected the speech to be excellent and 44 percent expected it to be good. But that's down from 44 percent excellent and 41 percent good last month.

Previewing the speech, White House press secretary Robert Gibbs went on the morning news shows today to say that Obama will continue focusing on the faltering economy -- what has been done so far and what more needs to be done -- and continue the balancing act between being honest about the problems yet hopeful about the future.

"What I think the President is going to do tonight, and what I think he thinks is important is, to be honest with the American people about the challenges we face and talk about what we are doing each and every day to get our economy back on track,” Gibbs said on Fox News Channel. “The notion that brighter days are ahead.”

John Sweeney, president of the AFL-CIO, the nation's largest labor federation, issued a statement with his expectations.

"Working people will be listening tonight for President Obama to make crystal clear that as we rebuild our nation’s economy, we will build it in a way that will work for everyone," said Sweeney, who will attend the speech as a guest of House Speaker Nancy Pelosi.

"President Obama’s economic recovery plan was a critical first step towards putting America back to work. Tonight, we hope to hear more about his plans to invest in infrastructure spending so we can rebuild America’s bridges and transportation systems with workers being paid a fair wage; to promote green technologies that will create good paying
jobs while also protecting our environment; and to provide universal healthcare for all Americans that will help millions of struggling families and help our economy recover.

"President Obama understands – and has said repeatedly – that our economy has become fundamentally imbalanced with too much power concentrated in the very few hands of the wealthy and corporate CEOs. It is time that America’s workers have a real voice on the job to bargain for better health care, job security, and wages without fear of harassment or intimidation.

"President Obama has shown tremendous leadership towards improving the lives of America’s workers – we look forward to hearing more tonight."

Americans are scared witless about the economy and their own finances.

But newly released poll findings show they also have little confidence in government and business leaders -- other than President Obama -- to make things better.

According to the CNN/Opinion Research Corp. survey, 40 percent are very confident and 35 percent somewhat confident that the Obama administration "will make the right decisions to help the country overcome its current economic problems."

Only 19 percent are very confident in congressional Democrats and 9 percent in congressional Republicans, 11 percent for labor leaders, only 5 percent each for auto executives and bank executives, and a mere 4 percent are very confident in Wall Street investors.

The poll also suggests there's little appetite for forking over more taxpayer money to help bail out the struggling auto industry or Wall Street. Only 37 percent favor, and 61 percent oppose, more aid to the automakers. Only 36 percent favor, and 62 percent oppose, shelling out the remaining $350 billion in financial rescue funds.

But Americans support more direct help -- 63 percent favor government assistance to homeowners who can't pay their mortgages and 72 percent favor "a program that would increase the federal government's influence over the country's health care system in an attempt to lower costs and provide health care coverage to more Americans."

Mitt Romney's political action committee announced today it is sending financial help to Republican US House members who have been targeted by Democrats for their votes against the $787 billion stimulus package.

The $1,000 checks from the former Massachusetts governor's Free and Strong America PAC are going to Representatives Judy Biggert and Mark Kirk of Illinois, Ken Calvert and Dan Lungren of California, Michael Castle of Delaware, Charlie Dent and Jim Gerlach of Pennsylvania, Blaine Luetkemeyer of Missouri, Thad McCotter of Michigan, Dave Reichert of Washington, and Pete Sessions of Texas.

House Republicans unanimously opposed the package, as did Romney.

“What Republicans wanted was a bill to strengthen the economy," Romney said in a statement. "What the Democrats passed was a bill to stimulate government. We are committed to helping these courageous Republicans defend their position and fend off political attacks.”

President Obama, opening a "fiscal responsibility summit" to tackle the flood of red ink facing the federal government, declared today that Washington can no longer "spend as we please" -- and will no longer try to hide the size of the problem.

Facing the worst economic crisis in generations, he had no choice to add to the deficit in the short term with "extraordinary but necessary steps," Obama said.

"They will come at a cost," he said, and there also are long-term challenges in energy and healthcare that need funding.

But the deficits cannot be sustained and the American people are "already paying the price" for them, he said, noting that the government paid $250 billion in interest last fiscal year on the national debt -- one in 10 taxpayer dollars.

Getting deficits under control starts with honesty in budgeting, said Obama, vowing to end accounting gimmicks, such as not budgeting for the Iraq war in advance, that obscured how much the government was spending.

"I believe it is time for a frank conversation," he said. (His full remarks are below.)

The federal deficit, projected to reach a record $1.2 trillion this fiscal year, is expected to approach $900 billion next fiscal year -- and those figures do not include the cost of the $787 billion stimulus package.

On Thursday, the White House plans to release a budget that calls for slicing the deficit in half by 2013, largely by reducing the cost of the Iraq war through troop withdrawals and by allowing tax cuts for the highest-income taxpayers to end as scheduled in 2010.

UPDATE: At the close of the summit, Obama pledged this afternoon to keep working on the issues that were raised -- and called on former rival John McCain to comment.

McCain highlighted serious cost overruns in the Pentagon budget (including a new presidential helicopter), and said "tough decisions" need to be made as the country also pays for the wars in Afghanistan and Iraq.

"This is going to be one of our highest priorities," said Obama, who said he has already raised with Defense Secretary Robert M. Gates whether the helicopter is needed.

The White House released the list of moderators for smaller, breakout sessions among the 130 attendees.

Social Security
Moderators: Chair of the National Economic Council Larry Summers and Gene Sperling of the Treasury Department
Healthcare
Moderators: OMB Director Peter Orszag and Domestic Policy Council Director Melody Barnes
Tax Reform
Moderators: Secretary Tim Geithner and Council of Economic Advisers Chair Christina Romer
Budget Process
Moderators: Secretary Ray LaHood and Deputy OMB Director Rob Nabors
Procurement
Moderators: Secretary Janet Napolitano, Deputy Secretary of State Jack Lew, and Rahm Emanuel

Governor Deval Patrick of Massachusetts today stood by his friend and political ally -- President Obama -- on Obama's plan to let tax cuts expire as scheduled in 2010 for the highest-income Americans.

To help slice the federal deficit, Obama plans to allow the tax cuts passed under the Bush administration to lapse for individuals making $200,000 or more a year and families earning $250,000 or more.

Critics call it a tax increase that will hurt the economic recovery and is unfair to people already paying the lion's share of total taxes.

But asked about it on MSNBC, Patrick said Obama's plan would impose "a fair amount of taxes" on people who are relatively wealthy.

"Nobody is talking about taking that wealth away," Patrick, who is in Washington for a National Governors Association meeting, said from in front of the White House.

Patrick said he would be hit by the increase and had no problem paying more, having come "from nearly nothing" to where he is blessed to make an ample living.

President Obama plans to preach responsibility today in two events -- one on spending the economic stimulus money, the other on getting a handle on the federal deficit that the stimulus will increase.

This morning, he spoke to the National Governors Association, bringing a similar accountability message as he did to the nation's mayors on Friday, when he warned that he would "call out" anyone who wasted their share of the $787 billion package.

To show how serious Washington is about helping, Obama told the governors he is releasing $15 billion on Wednesday to help the states with shortfalls in their Medicaid programs for the poor.

According to the White House, Massachusetts will get $594 million in Medicaid money, Maine will get $94.5 million, New Hampshire $31.5 million, Rhode Island $93.5 million, and Vermont $45.5 million.

"That means that by the time most of you get home; money will be waiting to help 20 million vulnerable Americans in your states keep their health coverage," Obama said. "Children with asthma will be able to breathe easier, seniors won’t need to fear losing their doctors, and pregnant women with limited means won’t need to worry about the health of their babies.”

He also named Vice President Joe Biden to oversee the stimulus package, which Obama said shows the importance of the effort.

Obama also confirmed that Earl Devaney, the inspector general at the Interior Department and a former Secret Service agent from Massachusetts, will be chairman of the new Recovery Act Transparency and Accountability Board.

The president called Devaney a "tenacious and efficient guardian" of the taxpayers' money.

"He looks like an inspector....He's tough, you know, he barely cracks a smile," Obama said.

Obama urged governors to bring that same attitude to how the stimulus cash is spent in their states. "This is not a blank check," he said.

He praised Governor Deval Patrick of Massachusetts and two others for creating websites, similar to the one the White House has already launched, to help taxpayers track the spending, and urged other governors to do the same.

Obama acknowledged the "healthy debate" among the governors about the money. But he urged them not to lose perspective, saying that the provisions under criticism in the "cable chatter" is a mere "fraction" of the stimulus plan. For instance, he said, the unemployment provision in dispute is only $7 billion of the entire package.

(Obama's full remarks, provided by the White House, are below).

At the first formal White House dinner of his presidency, Obama told the governors Sunday night that it's crucial for the states and federal government to work together.

"You're where the rubber hits the road. And you have to make tough decisions all the time, even when there's a lot of fussing and fighting here in Washington. The bottom line is, you still have to make sure that schools are open, that children are learning, that people who are falling on hard times are getting help. And so our goal and aim is to make sure that we are making life easier, and not harder, for you during the time that we're here in Washington," he said, according to the press pool report.

"We are going through some tough times," Obama added. "I don't need to tell you -- you're seeing it in your own budget, you're seeing it in your own state. There are going to be some differences, both within your state and in the country, in terms of how we address these problems. Here's my assurance. I know that each and every one of you are making the decisions you make, and taking the positions that you take, based on what is best for your state. And not every state's the same, and each of you have to take into account the
particular characteristics and demographics and culture and perspectives of your states and your parties. But I want you to know that regardless of our occasional difference, and in this very difficult time, my hope is that we can all work together."

Some Republican governors are at least talking about turning down some of the money altogether. Governor Haley Barbour of Mississippi is looking askance at millions of dollars in unemployment aid because when that money runs out, it would require increasing taxes on employers to maintain that level.

"The vast majority of the money is acceptable to us, the conditions are not significant or not objectionable," Barbour told reporters at the dinner. "There is some money that we won't take because of the requirements, particularly the unemployment compensation money. We do not, in our state, pay unemployment compensation to people who are not willing and able to work full time. This bill would require us to change that, which would result in a large tax increase when the federal money runs out, and that's why we're not going to take it."

Responding to the possible rejections, Representative Anthony Weiner of New York wants to make it easier for other states to divide up the money that other states pass up.

This afternoon, Obama plans introductory and closing remarks at a "fiscal responsibility summit" where 130 officials will discuss the long-term red ink threatening to overwhelm the federal government. It is running a projected $1.2 trillion deficit this year, and that doesn't count the stimulus package.

Obama acknowledges the deficit will increase in the short term, but White House officials over the weekend started divulging a plan to cut the deficit in half in the next four years, largely by withdrawing US troops from Iraq and allowing the Bush administration's tax cuts for the wealthy to lapse.

"It will require doing all we can to get exploding deficits under control as our economy begins to recover," Obama said in his weekend Internet and radio address. "That work begins on Monday, when I will convene a fiscal summit of independent experts and unions, advocacy groups and members of Congress to discuss how we can cut the trillion-dollar deficit that we've inherited."

A new poll shows that Americans are worried about the exploding deficit. The Washington Post-ABC News survey released today found that 59 percent of respondents are "very concerned" -- up 10 percentage points from December.

That concern, however, depends on party affiliation. Concern has actually dropped slightly among Democrats, while increasing among Republicans, 74 percent of whom express worry -- up 29 percentage points from December.

Now that the $787 billion stimulus bill is law, support for it has grown, a new poll suggests.

The CNN/Opinion Research Corp. survey released this afternoon shows that 60 percent favor the package and 39 percent oppose it, compared to earlier polls that found Americans evenly divided.

Fewer respondents, 53 percent, said they believed the stimulus would lead to a "significant improvement" in the economy, and only 31 percent said it would mean a significant improvement in their own financial situation.

Americans continue to be very high on President Obama, who hits the one-month mark in office today: 49 percent called the stimulus bill's passage a major victory for him, 74 percent say he has met or exceeded expectations, and 67 percent strongly or moderately approve of how he is handling his job, though that latter number is down from 76 percent earlier this month.

UPDATE: Later today, CNN released more findings of the poll that are something of a mixed bag for Obama.

Eighty percent say he is a "strong and decisive leader," up slightly from December, before he took office. About three-fourths of respondents say Obama is honest and trustworthy.

But 69 percent say he can bring the kind of change the country needs, down from 75 percent in December, and 63 percent say he generally agrees with them on the issues they care about, down from 68 percent. Those downturns could reflect the ethical lapses of some of his top nominees and the intense partisanship and Republican attacks over the stimulus plan.

The new poll, conducted Wednesday and Thursday, has a margin of error of plus or minus 3 percentage points.

By Donovan Slack and Foon Rhee, Globe Staff

President Obama told mayors from across the country this morning that help is on the way, in the form of the $787 billion economic stimulus he signed this week.

"We meet at such an urgent time," said Obama, who Thursday night signed an executive order establishing a new White House office for urban policy.

To lift the country out of recession, the president said, there must be a true partnership between mayors "on the front lines" and the White House.

"That partnership has to begin right now," Obama told about 85 mayors, including Tom Menino of Boston and his counterparts in other big cities.

Obama highlighted portions of the stimulus package, including a restoration of the program that helps cities pay for more police officers on the street.

While offering aid, Obama also warned the mayors that he will have no tolerance for them wasting taxpayers money or advancing their own personal agendas with the money.

American taxpayers, he said, are giving government officials their trust and their hard-earned money -- and expect to be repaid with smart spending and big impact.

"If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it, and put a stop to it," Obama said. "I want everyone here to be on notice that if a local government does the same, I will call them out on it, and use the full power of my office and our administration to stop it."

"Welcome back to the White House," Vice President Biden declared to applause, suggesting that mayors will get a friendlier reception in this administration than the previous one. "You can have our phone number and you know where we live."

Biden said that cities have been neglected, even though 70 percent of jobs are in them and they are essential to an economic recovery. "We know how important our cities are," he said.

But now, Biden said, municipal, state, and federal agencies must prove that the unprecedented infusion of cash is being spent effectively and is making a difference.

(The full remarks of Obama and Biden, as provided by the White House, are below.)

The mayors came out of the White House to praise the new partnership with cities.

"If we want to move this country forward, we need to move urban areas forward," said Miami Mayor Manny Diaz, president of the US Conference of Mayors.

Doug Palmer, mayor of Trenton, N.J., said he wasn't upset about the tough love from Obama.

"We don't mind being called out," he said. We welcome that kind of accountability."

Menino praised the outreach to the mayors by the Obama administration.

"This is a meeting that I've never seen happen before; we had a president, vice president, and cabinet officials explaining to us what this money will do for us," he said in a telephone interview shortly after the White House meeting. "I think the stimulus bill really is an unprecedented investment in America's cities."

Menino said he spoke to Attorney General Eric Holder about funding for Boston Police and Holder assured the mayor that the stimulus money could be used to avert layoffs, although it's unclear exactly how much Boston will receive and when. The mayor said he scheduled another discussion with Holder Tuesday, when he hopes to learn more.

With Boston facing an estimated $145 million budget shortfall this year, city officials have said that teachers and police officers both could face layoffs unless more revenue is found. City officials estimated earlier this week that Boston could receive at least $125 million from the federal stimulus package, including $69 million for schools, $30 million for housing, and $5 million for police. But officials said most of that money was directed toward infrastructure improvements.

Menino said that Obama also told him how much he liked Boston, where he campaigned in a major event last February with Senators John F. Kerry and Edward M. Kennedy and Governor Deval Patrick.

"He said 'You have a great city there, mayor, I'll be there soon, keep it up,' " Menino said.

UPDATE: This afternoon, Menino's office said it will create its own local version of the White House website so Boston residents can track how the money is being spent.

“Transparency and accountability are critical tools for maintaining the public’s confidence in this process, and we will make sure to uphold this responsibility,” Menino said in a statement.

On Monday, Obama plans to speak to the nation's governors.

The session with the mayors is the only public event on today's schedule for Obama, who plans to spend much of the day working on his speech Tuesday night to a joint session of Congress.

Facing some criticism that the $787 billion stimulus plan he signed this week does not include money set aside for Hurricane Katrina rebuilding, President Obama today re-upped a federal coordinator on the Gulf Coast recovery and dispatched two top officials to tour New Orleans and the coast next month.

The White House announced that Obama signed an executive order extending the Office of the Federal Coordinator for Gulf Coast Rebuilding, which was to expire on Feb. 28, through Sept. 30, and asked Homeland Security Secretary Janet Napolitano and Housing and Urban Development Secretary Shaun Donovan to do an on-site visit on March 5 and 6 to assess the reconstruction efforts.

“The residents of New Orleans and the Gulf Coast who are helping rebuild are heroes who believe in their communities and they are succeeding despite the fact that they have not always received the support they deserve from the Federal government,” Obama said in a statement. “This executive order is a first step of a sustained commitment by my administration to rebuild now, stronger than ever.”

“We must ensure that the failures of the past are never repeated," he added. "My administration is committed to strengthening our preparedness, response, and recovery efforts.”

President Obama and Canadian Prime Minister Stephen Harper, emerging with smiles after a meeting in Harper's office and a working lunch, said this afternoon they had agreed to work closely on stimulus plans to tackle the global recession, to create a joint clean energy initiative, and to pursue stability and progress in Afghanistan.

"The people of North America are hurting and that is why we are acting," Obama said at a joint news conference.

Obama expressed America's gratitude for Canada's contribution in Afghanistan, where more than 100 of its soldiers have died. Canada plans to withdraw its 2,500 combat troops by 2011 from Afghanistan, where Obama announced this week he is sending 17,000 more US troops.

Questioned by a reporter, Obama said he did not press Harper on the planned troop pullout, and mostly just wanted to thank Canada.

Harper said only the Afghans themselves can ultimately bring peace and security to their country.

Harper said while it's too early to lay out a "harmonized" policy on global warming, Canada will closely watch the US debate and is now optimistic that he has a partner on the issue, pointing out that regulations won't work only on one side of
the border.

Obama stressed the global nature of climate change and said that as two of the world's wealthiest countries, the US and Canada must take leadership roles.

Obama said he picked Canada for his first foreign trip to underscore the closeness and importance of the two countries' relationship -- and to renew that friendship. America's renewed leadership in the world, the president said, relies on such close alliances.

Harper also emphasized the close ties between the two neighbors and their shared values, including "equality of opportunity epitomized by the president itself."

"This has been a very constructive visit," Harper said, speaking first in French and then repeating his remarks in English.

He did not mention Canadian worries on trade.

The $787 billion stimulus plan Obama signed this week includes "Buy American" provisions, but the White House says it will follow all international trade deals. As a candidate, Obama vowed to renegotiate NAFTA, which unions say devastated manufacturing jobs, to incorporate more labor and environmental protections.

Asked about NAFTA, Obama said while he wants to include the labor and environmental standards in the main agreement, he wants to be careful to avoid any protectionism.

On the "Buy American" provisions, Obama said the US will keep its obligations under trade agreements.

Harper said there are ways to deal with concerns on NAFTA without unraveling the entire agreement, and argued that trade deals have "been nothing but beneficial" to the two countries.

Before wrapping up his first foreign visit and returning to Washington, Obama will meet with Canadian opposition leader Michael Ignatieff and US embassy employees and their families this afternoon at the Ottawa airport.

The White House summary of the Obama-Harper huddle is below:

President Obama, the first chief executive from a big city in a while, today filled out his new urban affairs office with two New York officials.

Adolfo Carrion, the two-term borough president of the Bronx, will be White House Director of Urban Affairs, and Derek Douglas, director of New York Governor David Paterson's Washington office, will be special assistant to the president for urban affairs.

The new office of urban affairs will coordinate all federal urban programs, develop a strategy for metropolitan America, and monitor all federal spending in urban areas.

"I look forward to working with these talented leaders to bring long overdue attention to the urban areas where 80 percent of the American people live and work. Vibrant cities spawn innovation, economic growth, and cultural enrichment; the Urban Affairs office will focus on wise investments and development in our urban areas that will create employment and housing opportunities and make our country more competitive, prosperous, and strong,” Obama said in a statement.

The White House released the biographies of the two appointments.

Adolfo Carrion, White House Director of Urban Affairs- Carrion has served two terms as Bronx Borough President and one term as the President of the National Association of Latino Elected and Appointed Officials (NALEO). As Bronx Borough President, Carrion oversaw the creation of 40,000 new units of housing in seven years, 50 new schools, $7 billion in capital and infrastructure expenditures, and over $400 million in new parks and parkland renovation. Prior to his service as Bronx Borough President, Carrion represented the 14th City Council District on the New York City Council and also served as an urban planner at the NYC Department of City Planning and a teacher in the New York City Public Schools. Carrion received his bachelors in World Religions and Philosophy from King’s College in 1985 and his Masters in Urban Planning from Hunter College in 1990.

Derek Douglas, Special Assistant to the President for Urban Affairs Douglas has served as Washington Counsel to New York Governor David A. Paterson and Director of Governor Paterson's Washington, D.C. Office. In this capacity, Douglas served as the Governor’s chief architect for federal policy and oversaw federal policy development and advocacy on domestic, economic, and urban policy issues for the State of New York. Prior to his appointment in 2007, Douglas served as Associate Director of Economic Policy at the Center for American Progress where he founded and served as Director of the Economic Mobility Program. Prior to joining the Center, Douglas was a Counsel at O’Melveny & Myers LLP and an Assistant Counsel at the NAACP Legal Defense and Educa­tional Fund, Inc (LDF). Douglas graduated from the University of Michigan with Highest Honors in Economics and from the Yale Law School.

As President Obama and Prime Minister Stephen Harper meet today, the leaders of the major labor federations in the two countries weighed in on perhaps the most contentious issue on their agenda.

In a joint letter to Obama and Harper, the AFL-CIO and Canadian Labour Congress called on the leaders to review and renegotiate the North American Free Trade Agreement and to cooperate to address the current global economic crisis. The AFL-CIO says it represents 11 million members in the United States and Canada, while the Canadian Labour Congress claims 3.2 million members. To see the letter, click here.

As a candidate, Obama pledged to push for reopening NAFTA -- blamed by unions for steep manufacturing job losses -- to incorporate more labor and environmental protections. But he isn't talking as forthrightly in office, despite overwhelming labor support in the election.

Harper told CNN on Wednesday that he does not want to renegotiate NAFTA, which he said is working well for both countries.

"President Obama fully appreciates the gravity of the global economic crisis and knows that our recovery will come through the rebuilding of a strong middle class with good jobs for all," AFL-CIO President John Sweeney said in a statement. "We urge the United States, Canada, and Mexico to work together to build a stronger and more equitable North American economy, where workers' voices are heard and their rights are fully respected."

"Working people in both the United States and Canada are being hit hard by an economic crisis that was not of their making. They are paying a terrible price for the unfettered greed and recklessness of a corporate elite upon whose advice our political leaders have relied for too long," Canadian Labour Congress President Ken Georgetti said in his statement. "Now is the time for a different approach; one that includes working people and shifts the focus towards their prosperity."

On the eve of President Obama's first trip abroad, the foreign leader he is going to meet on Thursday said today that he's optimistic that they'll find common ground on touchy issues such as trade.

Canadians are antsy because of Obama's campaign promises to renegotiate the 1994 North American Free Trade Agreement and because of the "Buy American" provisions in the $787 billion stimulus plan.

The stimulus requires that US iron, steel, and other manufactured goods be used for public buildings and other public projects, but also says that the US must comply with existing trade deals, including NAFTA.

During the Democratic nomination fight, Obama told unions and other NAFTA foes that he might withdraw from the deal that cover the US, Canada, and Mexico, to get better labor and environmental standards.

In an interview aired Tuesday night on the Canadian Broadcasting Corp., Obama seemed to step back, stressing the importance of the $1.5 billion in daily trade between the US and Canada.

In an interview today with CNN, Canadian Prime Minister Stephen Harper said while he's willing to improve NAFTA, he opposes reopening the agreement.

"We're always willing to look at ways it could work better," Harper said . But it's a fine line between looking at ways to make it work better and actually starting to open the agreement. I think if you actually open the agreement, I think you would get into a negotiation that would never terminate. I don't think that's what President Obama is looking for. But obviously I'm looking forward to having a discussion on these kind of trade and economic matters with him.

Harper also said that Canadian officials will watch how the stimulus plan is implemented. He also noted that Canada's recent stimulus package did not include "Buy Canadian" rules, and indeed lowered trade tariffs.

"If there is one thing that could turn a recession into a depression, it is protectionist measures across the world," Harper said on CNN. "I'm very encouraged by the fact that President Obama said that he was concerned about that as well."

The full excerpts from CNN are below:

A new poll shows support for the stimulus plan dropping slightly, but worries about the economy mushrooming.

In an Associated Press-GfK poll released today, backing for the $787 billion recovery plan was at 52 percent, down from 55 percent last month.

While President Obama called it the "beginning of the end" of the nation's economic trouble while signing the bill on Tuesday, Republicans and other critics are continuing to blast it as full of wasteful spending.

According to AP, 47 percent worry at least somewhat about losing a job, up from 28 percent in February 2008, and 71 percent say they know someone who has lost a job in the past six months.

Equal percentages of higher- and lower-income workers, 47 percent, worry about losing their jobs. Last year, only 20 percent of those earning $50,000 annually or more worried about joblessness.

The poll also found that 65 percent are at least somewhat worried about paying their bills, up from 46 percent last year, and that 69 percent worry that the value of their stocks and retirement investments will drop, up from 59 percent a year ago.

All the worry is for good reason, the Federal Reserve said today in a dire forecast. The Fed said the national unemployment rate, now 7.6 percent, will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.

The unemployment rate will continue to be higher than normal at the end of 2011, after the economy shrinks this year by between 0.5 and 1.3 percent, the Fed predicts.

The poll, conducted Feb. 12-17 by telephone, has a margin of sampling error of plus or minus 3.1 percentage points.

Warning that the housing crisis "strikes at the heart" of the American Dream, President Obama today laid out a $75 billion plan to help as many as 9 million homeowners refinance or restructure their mortgages.

The proposal -- more ambitious and expensive than expected -- is designed to assist 4 million to 5 million homeowners to refinance their mortgages to get lower payments, and to provide subsidies to lenders to lower the monthly payments of another 3 million to 4 million homeowners at risk of defaulting on their mortgages.

Aiming to aid those who owe more on their mortgages than their homes are worth, those who are on the verge of losing their homes to foreclosure, and their neighbors who are being affected, Obama said the day after he signed the $787 billion stimulus bill that the housing crisis needs to be fixed before the broader economy can recover.

"In the end, all of us are paying a price for this home mortgage crisis," he said at a high school in the Phoenix suburb of Mesa, one of the epicenters of the foreclosure crisis that is threatening as many as six million homes across the nation.

"And all of us will pay an even steeper price if we allow this crisis to continue to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit."

But he said the plan will only help "responsible" homeowners and families who "played by the rules."

"It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans," Obama vowed. "It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibly, distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford.

"This plan will not save every home. But it will give millions of families resigned to financial ruin a chance to rebuild."

(Obama's full prepared remarks are below.)

Representative John Boehner, the top Republican in the House, issued a statement skeptical of major elements of Obama's plan.

“The housing crisis is at the heart of our economic troubles, and House Republicans want to work with the President on a plan that keeps families in their homes without asking taxpayers to bail out irresponsible lenders, scam artists, and borrowers who knowingly made bad decisions," the statement said. "While we hope to work together, there are many unanswered questions that remain about the proposal that was announced today. Why should we reward Fannie Mae and Freddie Mac with $200 billion in taxpayer dollars without first reforming these housing entities that were at the heart of the economic meltdown? Will taxpayers be forced to subsidize the scandal-plagued activist group ACORN under this proposal? Should a responsible plan include a ‘cramdown’ provision that could increase the monthly mortgage payments for responsible borrowers?

“Taxpayers and homeowners who are playing by the rules expect their leaders in Washington to work together on solutions to get our housing industry – and our entire economy – moving again. The President’s announcement of his plan is an important step in that process, and Republicans look forward to working with him and our Democratic colleagues in Congress on this issue in the weeks and months to come.”

AFL-CIO president John Sweeney applauded Obama's initiative -- and bashed former President Bush.

"The swift action by the Obama Administration today to address the housing crisis is a welcome and refreshing change," Sweeney said in a statement.

"For more than a year, the Bush Administration ignored calls from the AFL-CIO and others to address a coming foreclosure tsunami. Tragically, in the months that followed, the deepening housing debacle turned millions of families' lives upside down and strengthened its chokehold on our economy.

"The Obama plan is designed to help up to nine million homeowners. The strong plan from the Administration correctly includes changing the bankruptcy laws to allow judges to modify the mortgages of distressed homeowners, including reducing the principal of these loans to the property's current market value.

"The crisis could not be more dire. An estimated eight million homes will fall into foreclosure over the next four years. Bankruptcy reform is a critical piece of the solution for working men and women. The AFL-CIO urges Congress to work with the Administration immediately to pass bankruptcy reform for homeowners."

President Obama tells Canadians tonight that he stands behind free trade and that he appreciates their sacrifices in Afghanistan, while sticking by his pledge to reform the North American Free Trade Agreement and to intensify US operations against the Taliban.

In an interview tonight with our northern neighbor's best-known newsman, Peter Mansbridge of the Canadian Broadcasting Corp., Obama says he still hopes to persuade Canada's leaders to stay in Afghanistan past 2011, when the Parliament has decided to withdraw troops and end combat.

"I'm in the process of a strategic review of our approach in Afghanistan," said Obama, who makes his first foreign visit as president, to Canada's capital of Ottawa, on Thursday. "Very soon we will be releasing some initial plans in terms of how we are going to approach the military side of the equation in Afghanistan. But I am absolutely convinced that you cannot solve the problem of Afghanistan, the Taliban, the spread of extremism in that region solely through military means. We're going to have to use diplomacy, we're going to have to use development, and my hope is that in conversations that I have with Prime Minister Harper, that he and I end up seeing the importance of a comprehensive strategy, and one that ultimately the people of Canada can support, as well as the people of the United States can support, because obviously, here as well, there are a lot of concerns about a conflict that has lasted quite a long time now and actually appears to be deteriorating at this point."

Asked about the "Buy American" provisions in the $787 billion stimulus package, Obama said he will oppose protectionist policies, but reiterated that he wants to strengthen the environmental and labor protections in NAFTA.

"I think there are a lot of sensitivities right now because of the huge decline in world trade," the president says. "As I've said before, NAFTA, the basic framework of the agreement has environmental and labor protections as side agreements -- my argument has always been that we might as well incorporate them into the full agreement so that they're fully enforceable.

"But what I've also said is that Canada is one of our most important trading partners, we rely on them heavily, there's $1.5 billion worth of trade going back and forth every day between the two countries and that it is not in anybody's interest to see that trade diminish."

The full transcript of the interview, as provided by the White House, is below:

Democrats are crowing over the signing of the stimulus bill, not surprising that they provided all but three votes in Congress for its passage.

“Today, we’ve taken a big step toward digging out this dismal economic downturn,” Senator John F. Kerry of Massachusetts said in a statement. “This bill is an essential down payment towards a comprehensive economic recovery. But it won’t work unless we immediately solve our bedrock economic problems starting with recapitalizing our banking system and repairing our housing market.”

Governor Tim Kaine, chairman of the Democratic National Committee, issued a statement: “By signing the American Recovery and Reinvestment Act today, President Obama took the first step towards keeping his promise to pass a responsible plan that saves or creates four millions jobs, provides tax relief for hard-working American families, and invests in our long-term economic future. At a time when hundreds of thousands of Americans are losing their jobs each month, President Obama called on our leaders in Washington to come together to find practical solutions that prevent this economic crisis from deteriorating even further. I applaud those who answered that call by putting partisanship aside to pass a bill that provides the practical solutions America’s working families need, expect and deserve. But this is only the beginning. Moving forward, we need more leaders in Washington to follow their example as we continue the hard work of getting our economy back on track.”

But Representative John Boehner of Ohio, the top Republican in the House, reiterated his opposition.

“Our nation is in recession, and responsible action is required to help our economy protect and create jobs. This isn’t it.," he said in a statement.

“The flawed bill the President will sign today is a missed opportunity, one for which our children and grandchildren will pay a hefty price. It’s a raw deal for American families, providing just $1.10 per day in relief for workers while saddling every family with $9,400 in added debt to pay for special-interest programs and pork-barrel projects. It will do little to create jobs, and will do more harm than good to middle-class families and our economy.

“In response to the President’s request for input, Republicans offered a better solution that would create twice as many jobs at half the cost. Instead of delivering a responsible, transparent, bipartisan bill to create ‘jobs, jobs, jobs,’ the Democratic Congress produced a trillion-dollar, special-interest pork-laden, partisan backroom deal that will do little to get our economy back on track.

“Upon his election, President Obama expressed a desire to govern from the center and to be a President for all Americans. I have cautioned that the President’s party would not always make it easy for him to meet this goal. Sadly, this proved to be the case with the economic recovery legislation. Despite this missed opportunity, Republicans stand ready to work with the President for better solutions to the challenges facing our country. We can do better, and we must.”

John Sweeney, president of the AFL-CIO, said in a statement:

"President Obama’s signature on the American Recovery and Reinvestment Act today is an important down payment on a more hopeful and secure future for America’s workers and their families.

"While it will still take many months for our economy to recover, this plan is a crucial first step that will put people back to work now, save and create good jobs, rebuild our crumbling roads, bridges, and schools and invest in a stronger economy at a time when there’s nothing more important.

"Now working people need our leaders to focus on setting the foundation of an economy that will begin to work for everyone so that we do not end up in this position again. It’s time to re-regulate the banking and financial industries, prioritize working family issues like health care and retirement security and ensure that all workers have the freedom to
improve their lives by forming unions and bargaining for better wages and benefits. We hope those leaders who opposed the American Recovery and Reinvestment Act will end party politics as usual and begin to join the forward-thinkers who are seeking solutions to our nation’s problems."

Americans United for Change, a liberal/labor advocacy group that pushed the stimulus plan, quickly unveiled a new cable TV ad hailing its passage.

The spot liberally quotes Obama at the signing ceremony today.

"This ad is designed to celebrate passage of President Obama’s American Recovery and Reinvestment Act as a major victory for the American people who are seeking relief from the worst economic crisis in a generation," Brad Woodhouse, the group's president, said in a statement. “Passage of the Obama jobs plan will not only play a critical role in turning our economy around and getting people back to work, it represents a transformational and historic moment for our country. This achievement represents a dramatic shift away from the failed trickle down economic policies of the past to a new approach that builds our economy from the bottom up by investing in people and communities. As a result of the leadership of President Obama and Congressional Democrats, our country has taken a major step on the road to recovery.”

President Obama made sure this evening to thank his millions of supporters during the campaign for helping push through the stimulus plan.

Organizing for America, the new Obama campaign vehicle housed within the Democratic National Committee, played a role in the lobbying effort before Congress passed the $787 billion package on Friday.

"This is a historic step -- the first of many as we work together to climb out of this crisis -- and I want to thank you for your resolve and your support," Obama said in an email to backers.

"You organized thousands of house meetings. You shared your ideas and personal stories. And you informed your friends and neighbors about the need for immediate action. You continue to be a powerful voice for change throughout the country. "

He highlighted the new website for tracking progress of the stimulus plan and commenting.

"Our progress will also be measured by the tens of thousands of personal stories submitted by people who are struggling to make ends meet," Obama wrote. "Your stories are the heart of this recovery plan, and that's what I'll focus on every day as President."

Signing his modern-day equivalent to the New Deal, President Obama declared that the stimulus bill is the most sweeping economic recovery package in the nation's history -- one that helps keep his campaign promise to preserve the American dream.

"We have begun the essential work of keeping the American dream alive in our time," he said, before affixing his signature to the $787 billion stimulus bill passed by Congress on Friday.

Singing its praises as if the package had not yet passed, Obama continued selling the stimulus to a public that is far more enamored of him than of the bill.

He said the bill will "improve travel and commerce throughout the nation," will put the nation on track to transforming "the way we use energy," and "represents the biggest increase in basic research funding in the long history of America’s noble endeavor to better understand our world.

Combined with an expansion of a children's healthcare program he also signed, "we have done more in 30 days to advance the cause of health reform than this country has done in a decade," he added.

Obama said he signed "a balanced plan with a mix of tax cuts and investments. It is a plan that’s been put together without earmarks or the usual pork barrel spending. And it is a plan that will be implemented with an unprecedented level of transparency and accountability."

Still, Obama acknowledged that much more needs to be done to restore the economy, but said that the economic stimulus bill is the "beginning of the end" of the work.

While the White House says the stimulus bill will save or create 3.5 million jobs in the next two years, the impact will likely take several months to take root. In the meantime, Obama has several crises to deal with: perhaps giving more loans for General Motors and Chrysler to keep them afloat, figuring out the details of version 2.0 of the bank bailout, and Wednesday outlining a plan to stem home foreclosures.

Beneath the lectern were three identical placards saying, "Making America Work."

He spoke at the Denver Museum of Nature and Science after touring the solar panel array that the museum uses for part of its power and that he cited as an example of the "green" alternative energy jobs the stimulus will generate.

Obama was introduced by the head of a solar energy company that has grown from 3 to 55 employees in the past three years, but that had to impose a hiring freeze and slash spending in the economic downturn.

Governor Bill Ritter called Colorado "the home of the new energy economy."

"This is how we rebuild America...." he said. "This is the promise of a better tomorrow."

Obama also issued an official statement on the stimulus bill signing:

"Today I have signed into law H.R. 1, the "American Recovery and Reinvestment Act of 2009." The Act provides a direct fiscal boost to help lift our Nation from the greatest economic crisis in our lifetimes and lay the foundation for further growth. This recovery plan will help to save or create as many as three to four million jobs by the end of 2010, the vast majority of them in the private sector. It will make the most significant investment in America's roads, bridges, mass transit, and other infrastructure since the construction of the interstate highway system. It will make investments to foster reform in education, double renewable energy while fostering efficiency in the use of our energy, and improve quality while bringing down costs in healthcare. Middle-class families will get tax cuts and the most vulnerable will get the largest increase in assistance in decades.

"The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression. Economists from across the spectrum have warned that failure to act quickly would lead to the disappearance of millions of more jobs and national unemployment rates that could be in the double digits. I want to thank the Congress for coming together around this hard-fought compromise. No one policy or program will solve the challenges we face right now, nor will this crisis recede in a short period of time. However, with this Act we begin the process of restoring the economy and making America a stronger and more prosperous Nation.

"My Administration will initiate new, far-reaching measures to help ensure that every dollar spent in this historic legislation is spent wisely and for its intended purpose. The Federal Government will be held to new standards of transparency and accountability. The legislation includes no earmarks. An oversight board will be charged with monitoring our progress as part of an unprecedented effort to root out waste and inefficiency. This board will be advised by experts -- not just Government experts, not just politicians, but also citizens with years of expertise in management, economics, and accounting.

"So much depends on what we do at this moment. This is not about the future of my Administration. This effort is about the future of our families and communities, our economy and our country. We are going to move forward carefully and transparently and as effectively as possible because so much is on the line. That is what we have already begun to do -- drafting this plan with a level of openness for which the American people have asked and that this situation demands."

Obama's full prepared remarks are below:

Just hours from the formal signing of the economic stimulus package, the White House today issued an updated state-by-state estimate of how many jobs the huge $787 billion bill will save or create.

Nationally, the Obama administration says it is 3.5 million over two years. The most is estimated at 396,000 in California, where the unemployment rate is near double digits and the state is in a serious budget crisis.

In New England, 79,000 are to come in Massachusetts, 41,000 in Connecticut, 16,000 in New Hampshire, 15,000 in Maine, 12,000 in Rhode Island, and 8,000 in Vermont.

"The estimates are derived from an analysis of the overall employment impact of the American Recovery and Reinvestment Act conducted by Christina Romer, Chair of the Council of Economic Advisers, and Jared Bernstein, Chief Economist for the Vice President, and detailed estimates of the working age population, employment, and industrial composition of each state," the White House says.

Meanwhile, the White House has also gone live with the website designed to let Americans follow the money, part of an effort to make the bill transparent and accountable.

Why Denver?

In picking the Mountain West city for the signing of the historic economic stimulus bill, President Obama returns today to one of the high points of his campaign -- when he accepted the Democratic nomination -- as well.

It also gets him outside the partisan backbiting of Washington and out into the real country as he tries to convince Americans that the $787 billion bill is worth the money.

But the precise setting -- the Denver Museum of Nature and Science -- is curious.

Ostensibly, it is to highlight the potential of "green energy" jobs. Just before signing the bill, Obama will tour the array of 465 solar panels that the museum uses to generate part of its power.

But could it also be something of an in-your-face move to opponents of funding for the arts?

The stimulus bill includes $50 million for the National Endowment for the Arts, but it didn't come without a huge fight. Not only was not in the version originally passed by the Senate, but the Senate even passed an amendment that banned stimulus cash going to museums, arts centers, and theaters.

The conference committee's compromise, approved Friday by the House and Senate, restored the NEA money and killed the amendment.

The Denver museum, by the way, reported receiving two government grants of more than $100,000 each -- from NASA and the National Science Foundation -- in 2007, when it drew 1.25 million visitors.

President Obama plans to unveil his first budget on Feb. 26, two days after his first address to a joint session of Congress, the White House says.

His spending outline for the fiscal year that starts Oct. 1 is highly unlikely to be anywhere close to balanced. The federal government is headed toward a $1 trillion deficit in the current fiscal year -- and that was before the economic stimulus bill that Obama will sign today that calls for spending and tax cuts totaling $787 billion over the next two years.

The president says the record deficit spending is needed in the short term to lift the country out of recession, but vows to get the budget under control -- including looking at Social Security and other entitlement programs -- over the long term.

"Our debt has doubled over the past eight years, and we've inherited a trillion dollar deficit –- which we must add to in the short term in order to jump start our sick economy," he said in his weekly radio and Internet address on Saturday. "But our long-term economic growth demands that we tame our burgeoning federal deficit; that we invest in the things we need, and dispense with the things we don't. This is a challenging agenda, but one we can and will achieve."

A day after stunning official Washington by pulling a "never mind" on his nomination to be commerce secretary, Senator Judd Gregg gave mixed reviews today to two key economic recovery initiatives of the man whose cabinet offer he eventually spurned.

The New Hampshire Republican said on CNBC this morning that Obama is on the right track in trying to shore up the financial system, despite the criticism that Treasury Secretary Timothy Geithner was much too vague in outlining the proposals this week.

"You are talking over a trillion dollars ... to clear off the books in the areas of consumer credit and commercial-backed real estate loans. That's big," Gregg said. "You are talking very strong initiatives in the area of foreclosure abatement. And you're talking a significant commitment to capital into the banks coming in either a direct infusion or through buying bad debt off their books."

But Gregg said that Obama made a "tactical error" made on the $789 stimulus bill, expected to be approved by Congress as early as today, by allowing the budget committee leaders to write most of the bill.

Gregg is expected to vote against the stimulus package, which he said "should be focusing mainly on trying to stabilize the real estate markets, and promoting small business and getting jobs."

Gregg is breaking his silence after taking the unusual move of recusing himself from voting on any and all Senate matters while his nomination had been pending. In announcing his withdrawal on Thursday, he said he concluded he had too many policy differences with Obama.

Obama, meanwhile, has been publicly more understanding of Gregg's change of heart than the initial snippy White House statement, which suggested that Gregg knew that by accepting the nomination, he would have to back Obama on policy.

The president told reporters aboard Air Force One last night that he and Gregg agree on 80 percent of the big issues that Americans care about.

And during a dinner in Springfield, Ill., commemorating the 200th anniversary of Abraham Lincoln's birth, Obama even managed to joke about the turn of events.

"In 1854, Lincoln was simply a Springfield lawyer who'd served just a single term in Congress, possibly in his law office, his feet on a cluttered desk, his sons playing around him, his clothes a bit too small to fit his uncommon frame, maybe wondering if somebody might call him up and ask him to be commerce secretary ..." Obama said, trailing off as the crowd burst into laughter.

Senator John McCain, the GOP presidential nominee last year, opined today on Gregg's decision.

“I’m not sure of the evolution in Senator Gregg’s thinking, but I’m glad to have him back,” he said on Fox News Channel, according to excerpts released by the network.

McCain disputed suggestions that fellow Republicans were angry with Gregg and forced him to withdraw.

“I don’t think Senator Gregg was pressured by anybody," he said. "He’s a bit of a New Hampshire-ite with free will and thinks for himself.”

On the eve of the passage of his economic stimulus plan, President Obama's unprecedented grassroots organization -- now housed within the Democratic National Committee -- this morning released the stories of real Americans hit by the recession.

“This week's report that more than 623,000 Americans requested first time jobless claims is a sobering reminder of the impact this economic crisis is having on America’s working families,” Governor Tim Kaine, chairman of the DNC, said in a statement. “The stories we've collected put a human face on the economic crisis and underscore the urgent need for action. These stories are the reason President Obama asked our leaders in Washington to put partisanship aside and pass an economic recovery plan that saves or creates four million jobs and invests in our economic prosperity in the long term. Congress needs to move swiftly toward final passage of the Economic Recovery Plan so the President can sign it into law and we can prevent this economic crisis from becoming a national catastrophe that costs millions more Americans their jobs, homes, and health care.”

Last week, Organizing for America, the post-election iteration of Obama's record-breaking on-the-ground campaign, encouraged meetings and house parties on the economic recovery plan and asked people to submit their stories about how the economic crisis is affecting them and their communities.

From more than 3,600 meetings in all 50 states, Americans submitted more than 31,030 stories -- and there's a sampling posted on its website.

"As of a week ago, our family has joined the ranks of the unemployed and thus uninsured. We have two children, a 6 year old and a 10 month old. With my part time jobs and unemployment, we should be able to keep the roof over our heads, at least one car in the driveway and food in our stomachs for a few months. The state of our health insurance is what truly scares us," said Nichole H. of Columbus, Ohio.

"I live in a small rural community in central Minnesota and have run my own small business for 32 years here. These last 8 years have been a slow steady decline economically. This has caused me to continually find ways to tighten my budget. Our small towns are really struggling with infrastructure and loss of businesses to attract and hold workers in their communities," said Judy T. of Motley, Minn.

"I am a teacher in Florida where we are 50th in the country in spending per student. I feel this generation of students is being cheated out of a quality education. I'm fortunate that I have a job. But our education system is failing our children. There are so many areas of education that are suffering because of massive budget cuts. The bottom line is: as the United States of America we can do better for our children," said Betty Jo A. of Deltona, Fla.

Senator Judd Gregg, the New Hampshire Republican, withdrew this afternoon as President Obama's nominee for Commerce Secretary, saying he had too many policy differences on the stimulus package and the Census.

“It has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy," Gregg said in a statement.

At a news conference on Capitol Hill, Gregg said it became clear to him that he could not be "100 percent behind the team" and that it was "his mistake" to accept the nomination.

Using a football analogy, Gregg said it would be like blocking back who only pulls out to block for every second or third play.

"I've been my own person for 30 years...It really wasn't a great fit," he said. "Bottom line, it was a bridge too far for me."

Gregg acknowledged that "to withdraw at this point is unfair in many ways," but he said staying on would have been a bigger mistake .

Gregg praised Obama for reaching out to Republicans and including diverse views in his cabinet and said he will be an effective president.

The White House response suggested that Gregg was the one who forced the divorce -- and should have known about the policy differences.

“Senator Gregg reached out to the President and offered his name for Secretary of Commerce," press secretary Robert Gibbs said in a statement. "He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace, and move forward with the President’s agenda. Once it became clear after his nomination that Senator Gregg was not going to be supporting some of President Obama’s key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways. We regret that he has had a change of heart”.

Obama, himself, told The State Journal-Register newspaper in Springfield, Ill. that Gregg's withdrawal was "something of a surprise."

UPDATE: Later, he told reporters on Air Force One that he was glad Gregg "searched his heart" and changed course before he was confirmed. "Clearly he was just having second thoughts about leaving the Senate, a place where he's thrived," Obama added.

Obama also said Gregg's withdrawal won't deter him from working with Republicans.

Gregg had recused himself from voting on the stimulus, or any other matter before the Senate, while his nomination was pending.

House Republican leaders today had criticized plans for increased White House involvement in the Census, saying that if Obama didn't trust Gregg to oversee the Census, he should find another Commerce nominee. The Census will help determine political power in Washington in the next decade.

Gregg's announcement also ended the short-lived plan for New Hampshire's Democratic governor, John Lynch, to appoint Republican Bonnie Newman to the Senate.

To pave the way for Gregg's nomination, Lynch agreed to appoint a Republican to serve out Gregg's term and not change the balance of power in the Senate, and Newman agreed not to run for the office.

The Associated Press is reporting that Lynch, who spoke to Gregg several hours before the announcement, said he respected Gregg's decision to withdraw and remain in the Senate. He also thanked Newman for her willingness to serve.

Newman issued this statement, according to the Associated Press:

"I spoke with Senator Gregg this afternoon and understand that he has withdrawn as the nominee for Secretary of Commerce. As I said last week, I have the greatest admiration for Senator Gregg. I know him to be a person of extraordinary integrity and ability. I believe as Secretary of Commerce he would have served the country well in these difficult times.

"I expect Senator Gregg's decision was not an easy one nor made lightly. Let me also say how much I appreciate Governor Lynch, his confidence in me, and his steadfast devotion to the people of New Hampshire. For me, it would have been a great honor to serve in the United States Senate, but I will continue in my own, quiet and non-political way to work on behalf of the people of New Hampshire."

The stunning withdrawal is the latest setback for Obama, who announced the nomination Feb. 3 and pledged to bring Republicans into his cabinet.

Tom Daschle stepped aside as health and human services secretary after questions about late tax payments. And Obama's first pick at commerce, New Mexico Governor Bill Richardson, withdrew amid an investigation of state contracts.

In a statement, Mitch McConnell, the top Republican in the Senate, said Gregg "made a principled decision to return and we're glad to have him. He is among the smartest, most effective legislators to serve in the Senate -- Democrat or Republican -- and a key adviser to me and to the Republican Conference. It's great to have him back."

But Democratic Congressman Paul Hodes of New Hampshire, who plans to run for Gregg's seat in 2010, was critical.

“I am surprised and disappointed at this sudden withdrawal. Senator Gregg would take us back to the years of George W. Bush rather than moving forward with the change agenda that the American people clearly want. I will continue to work with President Obama to create jobs and rebuild our economy for the middle class.

"I will be a candidate for the United State Senate in 2010. I look forward to working every day to stand up for New Hampshire as we come together to confront the economic crisis facing our nation.”

Gregg's full statement:

“I want to thank the President for nominating me to serve in his Cabinet as Secretary of Commerce. This was a great honor, and I had felt that I could bring some views and ideas that would assist him in governing during this difficult time. I especially admire his willingness to reach across the aisle.

“However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.

“Obviously the President requires a team that is fully supportive of all his initiatives.

“I greatly admire President Obama and know our country will benefit from his leadership, but at this time I must withdraw my name from consideration for this position.

“As we move forward, I expect there will be many issues and initiatives where I can and will work to assure the success of the President’s proposals. This will certainly be a goal of mine.

“Kathy and I also want to specifically thank Governor Lynch and Bonnie Newman for their friendship and assistance during this period. In addition we wish to thank all the people, especially in New Hampshire, who have been so kind and generous in their supportive comments.

“As a further matter of clarification, nothing about the vetting process played any role in this decision. I will continue to represent the people of New Hampshire in the United States Senate.”

While President Obama and the Senate are fine with the stimulus deal that appears headed for final votes in Congress on Friday and Obama's signature on Monday, the House is another matter.

And it's not just Republicans, who unanimously opposed the bill the first time around and continue to rail against the deal struck by the House-Senate conference committee on Wednesday.

Some House Democrats are upset with some of the changes made to preserve the support of three Republicans in the Senate, who wield virtual veto-power.

And there are reports that House Speaker Nancy Pelosi was ticked off that Harry Reid, the top Senate Democrat, announced the compromise Wednesday afternoon before her rank-and-file had signed off.

UPDATE: Pelosi confirmed this afternoon that the House will vote on Friday and glossed over any dissension.

She said that the House version makes up the vast majority of the compromise, that it is a "major accomplishment" for both Congress and Obama, and that Americans are "excited" about the bill.

"This one is historic and transformational," she told reporters at a Capitol Hill news conference.

Meanwhile, top House Republican John Boehner's office released a statement with the accusation: "Democrats pile up the pork, but leave scraps for small business."

"While there are still plenty of unanswered questions as Congress prepares to vote on the Democrats’ trillion-dollar spending bill, here’s what we do know: the legislation is loaded up with plenty of unfocused and wasteful Washington spending – a price to be paid by small businesses, which apparently will see very little tax relief under the as-yet-unseen House-Senate “deal.” In fact, it appears the amount of direct small business tax relief in the legislation amounts to about one-third of one percent of the total bill, just $3 billion in tax relief out of a $789.5 billion bill. So, what’s getting funded at the expense of small business owners and workers across the country?" the statement continues.

"Here are just a few examples: $2 billion for 'Neighborhood Stabilization,' money which will be available to the Association of Community Organizations for Reform Now (ACORN), an organization accused of perpetrating voter registration fraud numerous times in the last several elections and reportedly under federal investigation; $1 billion for a new “Prevention and Wellness Fund,” which would be available for education programs on sexually-transmitted diseases; and millions for the federal government to buy plug-in cars.

"President Obama set an important goal at the beginning of this process: a bipartisan bill that will create more jobs, more quickly. Which begs the question: How will any of this spending create new jobs? And, since small businesses are the engine of job creation in this country, why are these programs and projects being funded at the expense of those who own and are employed by small businesses?"

President Obama is apparently taking a liking to getting out of Washington and pitching his economic recovery plans on the road.

He appeared this afternoon at a Caterpillar plant in East Peoria, Ill., after similar events this week in Indiana, Florida, and northern Virginia.

Now, the Associated Press reports, he plans events in Denver and Phoenix next Tuesday and Wednesday to promote his stimulus plan, his version of the financial system bailout, and a yet-to-be-unveiled plan to stem home foreclosures.

If the House and Senate give their final sign-off on Friday, he could sign the $789 billion stimulus bill on Monday, the President's Day holiday, with some reports suggesting he might use a nationally televised primetime speech to do it.

Obama's remarks at the Caterpillar plant are below:

Maine Republican Senator Susan Collins spoke about the agreement. (NECN video)

By Sasha Issenberg, Globe Staff

WASHINGTON -- Democratic leaders in Congress reached a compromise on an economic stimulus bill today, excising some tax cuts and new school funding to settle on a package totaling $789 billion to confront the worst recession in decades.

The deal was announced by Senate leaders, who appeared to drive the private negotiations with their House counterparts. They had to navigate competing interests as they worked to deliver a bill to President Obama by his end-of-week deadline, balancing a House majority that sought robust new funding for long-standing priorities and Senate centrists of both parties who had threatened to scuttle any bill that emerged larger than $800 billion.

"We came a long way in a relatively short time," said Senator Joe Lieberman, a Connecticut independent who affiliates with the Democrats and helped broker Republican support for the bill. "Everybody gave something in these negotiations to achieve something bigger for our country and our people."

Barring any last-minute snags, the bill will go to both chambers for an up-or-down vote as soon as Thursday to send it to Obama's desk.

The contours of the compromise plan -- significantly smaller than either the $819 billion plan the House passed on Jan. 28 or the $838 billion version the Senate approved Tuesday -- demonstrated the guidance and prodding of a popular White House, which held off from authoring the original House legislation but orchestrated the final Senate negotiations once the legislation began to teeter last week.

In a statement this evening, Obama thanked "the Democrats and Republicans in Congress who came together around a hard-fought compromise that will save or create more than 3.5 million jobs and get our economy back on track."

The elements that survived reflected the new president's shifting ambitions in what calls the worst economic crisis since the Great Depression. He began the year trying to earn broad bipartisan support for the package, but this week his chief of staff, Rahm Emanuel, worked merely to hold enough votes for final passage.

A middle-class tax cut Obama pledged during his campaign survived largely intact, promising most workers more money in each paycheck.

So did expanded benefits for the unemployed, while costly provisions with backers in each chamber fell away. Negotiators abandoned half of the $79 billion in direct aid to states in the House version, along with tax cuts that had been adopted by the Senate with the support of Republican members who intended to oppose the legislation regardless. A $15,000 tax credit for homebuyers and a deduction for the sales tax paid by purchasers of new cars were both slashed.

"The middle ground we've reached creates more jobs than the original Senate bill and costs less than the original House bill," said Senate Majority Leader Harry Reid.

To the end, the leverage was held by three moderate, northeastern Republicans -- including Susan Collins and Olympia Snowe of Maine -- who had threatened to withdraw their support for the bill if it did not emerge from the conference committee to their liking. Over the last week, they proved a crucial bridge for an expanded Democratic caucus to reach the 60 votes necessary to pass such a bill in the Senate.

"The Republican moderates were able to see to it that more than $100 billion was cut from this program. Now there are people who like to spend less, some like to spend nothing," said Pennsylvania Senator Arlen Specter, the third key GOP supporter. "The fact is we hung tough and it was modified only in the case of absolute necessity."

Yet most Republicans, including those in the House who voted unanimously against the bill, said that the changes made it no more appetizing to them, though there not enough of them to stop passage.

House GOP leader John Boehner of Ohio told reporters that "it appears that Democrats have made a bad bill worse by reducing the tax relief for working families in order to pay for more wasteful government spending."

Obama, who has insisted that such a bill offers the nation its only path away from economic catastrophe, heralded the congressional negotiations in an appearance this morning designed to build public support for new spending on infrastructure projects.

"We're at the doorstep of getting this plan through Congress, but the work is not over," he said at a suburban Virginia highway construction site.

Indeed, even after Reid's afternoon announcement of a deal, the House-Senate conference committee required to formalize the arrangement was postponed. The move was apparently made by House Speaker Nancy Pelosi, who held out to expand the bill's funding for school construction.

She emerged this evening from meeting with her rank and file to say they are on board and are proud of the work they did on the bill.

"I think people are pretty happy," she said, though she acknowledged there were items she wished were still in the package.

By Michael Kranish, Globe Staff

WASHINGTON -- The top executives of eight banks that received the bulk of the federal financial rescue money so far, including State Street Bank of Boston, appeared today before an angry House committee that demanded more answers about what has happened to the bailout cash and more accountability for the next round of taxpayer aid.

The executives, seated at one table before the House Financial Services Committee, were pilloried time and again for making poor decisions that led to the economic meltdown, and for paying large bonuses.

Morgan Stanley chief executive John Mack, asked whether the bankers should apologize to the American public, responded, "As an industry clearly we made mistakes...I'm especially sorry for what has happened to shareholders."

In one of the sharpest exchanges of the hearing, Representative Michael Capuano, a Somerville Democrat, compared some of the executives to bank robbers who seek freedom from jail by promising to be good in the future.

"All or most of you engaged in all or some of the activities that created this crisis. America doesn't trust you anymore," said Capuano, who said he himself had so little confidence that he would not deposit "one single penny in one of your banks."

(Capuano's office said later that the congressman's personal banking accounts are at the following institutions: East Cambridge Savings Bank, Winter Hill Federal Savings Bank, the Somerville Federal Credit Union, and the Congressional Federal Credit Union. His campaign accounts are at Winter Hill Federal, Century Bank, Citizens Bank, and Sovereign Bank.)

None of the executives responded directly to Capuano's remarks, but they said during the hearing that they are loaning money provided by taxpayers, and they pledged to repay the federal government with interest.

President Obama, his economic advisers, and many in the financial world have been very critical of the handling and lack of effectiveness of the first $350 billion from the $700 billion rescue plan passed last fall. The eight banks represented received more than $160 billion.

"I urge you going forward to be ungrudgingly cooperative," Barney Frank, a Newton Democrat and chairman of the panel, told the executives. "There has to be a sense of the American people that you understand their anger ... and that you're willing to make some sacrifices to get this working."

Despite the harsh tone of some of the exchanges, much of the hearing was dominated by statements from the executives that they have reformed their practices and are lending more money than would have been possible without the infusion of federal funds.

The executives represented a wide range of banks, from those in poor shape to those that remain profitable. Vikram Pandit, the chief executive of Citigroup, which received $45 billion in bailout money, pledged to take only $1 in annual salary until the bank returns to profitability. Noting that he had canceled the bank's order of a corporate jet after widespread criticism, Pandit said, “I get the new reality and I will make sure Citi gets it as well."

State Street Bank chief executive officer Ronald E. Logue, whose firm received $2 billion in federal assistance, sought to differentiate his company from some of the other banks by noting that his institution is akin to a giant "back office" operation for various investment operations and has a lower risk profile. As a result, Logue told the committee, State Street had a 28 percent increase in revenues and a 25 percent gain in earnings in 2008 compared to the prior year. He said the bank has used the $2 billion to strengthen its capital base and increase lending capacity.

The CEOs of Goldman Sachs Group Inc., Bank of America Corp., JP Morgan Chase & Co., Morgan Stanley, Wells Fargo and Co., and the Bank of New York Mellon also testified.

Infrastructure was the buzzword today on day three of President Obama's sales tour for his economic stimulus package.

He and Virginia Governor Tim Kaine, his pick to head the Democratic National Committee, visited the Fairfax County Parkway outside Washington, D.C., to highlight how many jobs could be quickly created with highway, bridge, mass transit, and other public works projects.

Kaine said the parkway has been under construction for more than 20 years and needs to be finished to link up to a large scientific facility, but two phases are unfunded.

Obama urged Congress again to finish work on the bill. "Now we have to get a final version to my desk, so I can sign it," he said.

"We're surrounded by unmet needs and unfinished business," he said, with the construction site in Springfield, Va., as a backdrop.

He said the consequences of insufficient investment in infrastructure show up in dramatic ways such as the failed levees in New Orleans during Hurricane Katrian and the deadly bridge collapse in Minneapolis -- and in daily ways such as traffic gridlock that drives down productivity.

(Obama's full remarks are below.)

Also today, Vice President Biden and Pennsylvania Governor Ed Rendell will visit the Route 34 Bridge over the Conodoguinet Creek in Carlisle -- an example of the thousands of bridges across the country that need repair -- then speak at the State Capitol in Harrisburg about infrastructure.

While the White House says the stimulus plan represents the largest investment increase in our nation’s mass transit systems, roads, and bridges since the creation of the national highway system in the 1950s, some critics have said the package does not include infrastructure spending.

A House-Senate conference committee, with heavy input from the White House, is trying to quickly come up with a compromise that both chambers will approve and that Obama will sign into law.

The Senate's $838 billion version includes about $46 billion for transportation projects, including $27 billion for highway and bridge construction and repair and $11.5 billion for mass transit and rail projects. It also includes $4.6 billion for the Army Corps of Engineers; $5 billion for public housing improvements; and $6.4 billion for clean and drinking water projects.

The $820 billion House plans includes $47 billion for transportation projects, including $27 billion for highway and bridge construction and repair and $12 billion for mass transit. It also includes $31 billion to build and repair federal buildings and other public infrastructure.

The House plan also includes $20 billion for school modernization -- not in the Senate version -- that Democrats and Obama want to restore.

But the three Republicans who voted for the Senate plan -- Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania -- are threatening to take a walk if the conference committee compromise strays too far from the Senate version.

The Associated Press is reporting that Obama's negotiating team had prevailed in restoring some lost funding for school construction projects and had also increased aid to state governments above the $39 billion approved in a compromise with a handful of Senate GOP moderates.

But his signature tax credit would be reduced from $500 per worker to $400, and from $1,000 to $800 for couples, a Democratic aide close to the talks told AP.

UPDATE: The conference committee is reportedly putting together a package of about $790 billion -- less than either the House or Senate version -- in part by trimming back tax cuts for homebuyers and car buyers.

"We're getting closer," Senator Ben Nelson, a conservative Democrat from Nebraska who helped negotiate the Senate package, told reporters.

He said he does not see a "deal breaker" in the negotiations.

As negotiators try to strike a stimulus deal, the rank-and-file in Congress is being buffeted by both sides.

The three Republican senators who voted for the package on Tuesday are being assailed by GOP groups.

Meanwhile, advocacy groups supporting President Obama's stimulus bill is targeting 18 House members and 3 senators in swing districts who voted "no" with new radio ads. The spots are sponsored by Americans United for Change and the American Federation of State, County, and Municipal Employees.

"Haven't you ever wished you had a second chance to do the right thing?" the announcer says, naming the member of Congress and saying he or she " has a second chance to get it right when it comes to our economic crisis."

The spot warns that 20,000 Americans are losing their jobs every day and points out that "groups from the US Chamber of Commerce to organized labor are supporting the Obama jobs plan" before urging listeners to call their representative and tell them "we can't let partisan wrangling stand in the way of creating the jobs we desperately need."

AFSCME and Americans United for Change also are airing a national cable TV ad targeting Republican leaders opposing the stimulus.

"Our economy in crisis," the announcer says. "Millions out of work. That’s why 80 percent of Americans support a plan like President Obama’s to create jobs. But Republican leaders? They’re 'just saying no.' No to changing the failed economic policies of the past eight years.

"We’re in an economic crisis and Republican leaders are playing politics instead of doing what's right," the spot continues. "Call the Republican Leadership – tell them no is not an option."

One of those pictured in the ad, Representative Eric Cantor, was apparently none too happy with it. Politico reports that Cantor's spokesman responded with a dubbed-over, profanity-filled 1970s video mocking AFSCME.

That prompted an outpouring of outrage this afternoon from the advocacy groups.

AFSCME President Gerald McEntee: “Eric Cantor may think the greatest economic crisis in seventy years is a joke, but we don’t. He should talk to the people in Virginia who are losing their jobs, health care and homes.”

Brad Woodhouse, president of Americans United for Change: "Does Eric Cantor believe that peddling profanity-laced filth around the Internet is consistent with the values of the people of Virginia or the country? This is childish, inappropriate and disgusting behavior from someone who is supposed to be a leader in Congress and a role model to others. Eric Cantor’s response to one of the most serious crises facing America in our lifetimes is to spread this filth, denigrate government employees and treat the current economic crisis like a joke. This video has been floating around on YouTube for years – but Eric Cantor’s use of it in this context shows how completely and utterly out of touch he is with the current economic crisis and the lives of his constituents. Eric Cantor should be ashamed and he should apologize.”

AFL-CIO President John Sweeney: "During these tough economic times the last thing hard working Americans need is to be ridiculed by a member of the Republican leadership. Rep. Cantor should apologize for insulting America's workers with this profane video."

UPDATE: Cantor's spokesman, Brad Dayspring, issued a statement apologizing for the video: "I would like to apologize for a joke that was in no way an official response from Congressman Cantor, but instead an inappropriate email. I apologize to AFSCME for my inappropriate email containing an old video. Let me be clear, we know people are hurting in these trying times and House Republicans completely agree that we must pass an economic recovery bill that preserves, protects and create jobs for Americans facing these economic challenges."

John McCain is telling supporters he is definitely running for another term in the US Senate after the bitter disappointment of losing his presidential bid -- and he's saying that the economic crisis was the clincher.

"The magnitude of the financial crisis that many American families are facing makes it clear to me that I want to continue to serve our country in the Senate," he says in the email, sent Tuesday night and which also serves as a pitch for campaign cash.

McCain joined all but three Republicans in voting Tuesday against the $838 billion stimulus package in the Senate, and has been vocal in his disdain.

"The economic challenges currently confronting our nation are immense and unfortunately, the Democrats in Congress propose addressing these challenges through increased spending that wastes billions of taxpayers dollars and saddles our children and grandchildren with a staggering debt," the email says. "Their proposals will not stimulate economic growth or create jobs. While the leader of the Democratic Party, President Obama, has pledged to change business as usual in Washington and spoken of bipartisanship, I have been saddened to watch as Congressional Democrats try to use their majority to advocate more of the same failed policies and wasteful spending of the past. With so much at stake, now is not the time to step away from my work in the Senate."

"As always, I anticipate a tough re-election challenge. But with your help, we will counter those efforts and put forth an aggressive campaign by registering new voters, reaching out to Democrats, Independents and Republicans, and again earning the support of Hispanic and Native American voters in Arizona."

Treasury Secretary Timothy Geithner rolled out a plan this morning designed to strengthen America's banks and unfreeze credit to businesses and consumers.

The costly centerpiece is a public-private partnership of more than $1 trillion to buy bad assets, which Geithner said would lead to "cleaner and stronger" bank balance sheets.

"Right now, critical parts of our financial system are damaged," he said, adding that credit markets "are not working."

Without credit available, the economic stimulus plan emerging from Congress will not work as well as necessary to lift the country out of recession, he said.

Geithner said the job of restoring confidence in the markets is more difficult now because the first $350 billion of the $700 billion financial bailout was not spent effectively, because some financial executives continued receiving outsized pay and perks, and because taxpayers are skeptical about the government's proposals.

He promised more accountability and transparency so taxpayers can see where the money is going, announcing a new website to track the cash.

With President Obama headed to Florida to sell his stimulus plan, Senator Chris Dodd of Connecticut stood in for the introduction.

Geithner realizes the "enormity of the challenges" facing the country -- something, Dodd said, his predecessors failed to do.

The early returns on Geithner's plan are not promising.

The Dow Jones industrial average, the most closely watched barometer on Wall Street, is down more than 350 points as of early afternoon, with investors expressing doubt that private firms will buy the bad assets.

UPDATE: In an interview airing tonight on ABC's "Nightline," Obama responded to the market drop, about 382 points at the end of trading.

"Well, you know, Wall Street, I think, is hoping for an easy out on this thing and there is no easy out," the president said, according to excerpts released by ABC. "Essentially, what you've got are a set a banks that have not been as transparent as we need to be in terms of what their books look like."

"And we're going to have to hold out the Band-Aid a little bit and go ahead and just be clear about some of the losses that have been made because until we do that, we're not going to be able to attract private capital into the marketplace," Obama added. "And so, you know, I think that you have two choices in this situation: You can prolong the agony and shareholders will be happy until they're not happy, and that could be a year from now or two years from now, or, in the case of Japan, eight years later."

"Or you can just go ahead and acknowledge that, yeah, there's a lot of work that has to be done to put these banks back on a firmer footing."

Some reaction to the plan is below:

President Obama took his economic recovery road show to Florida today for the second in a series of town hall meetings to build public support.

The setting is the Harborside Event Center in Fort Myers, one epicenter of the wave of home foreclosures that was the leading edge of the recession burdening the country. Like many fast-growing Sunbelt cities, there was a home construction boom, fueled in part by cheap loans and speculation. Now, home values have plummeted and many homes have been seized by lenders.

In the town hall meeting, Obama declared that his economic recovery plan is needed asap and tried to remind Congress of the people behind the dire statistics.

"You have seen hardship as well....We're not talking about faceless numbers," said Obama, greeted by the "Yes we can" chants of his historic campaign and introduced by Charlie Crist, Florida's Republican governor, who agreed that it's crucial to push through the stimulus plan.

"We need to do it in a bipartisan way," Crist said.

But when the Senate approved its stimulus plan as he answered questions from the audience, it came with only three Republican votes, after no Republicans voted for the House version.

The vote was 61-37 for the $838 billion Senate version of the stimulus plan, setting up what could be a contentious conference committee negotiation with the $820 billion House version.

After the vote, Harry Reid, the top Democrat in the Senate, announced that the conference committee will start meeting this afternoon.

He said the differences are "relatively minor" with the House version.

"One option we do not have is to do nothing," Reid said. "It's been a long, hard struggle to get where we are, but we're here."

Obama, however, continued hitting back at his Republican critics.

"We can’t afford to posture and bicker and resort to the same failed ideas that got us into this mess in the first place. After all, that’s what this election was about. You rejected those ideas because you know they haven’t worked. You didn’t send us to Washington because you were hoping for more of the same, you sent us there to change things, and that is exactly what I intend to do as President of the United States," he said.

And just before Obama's event, his treasury secretary, Timothy Geithner, will formally unveil an overhauled bailout of the financial system, outlining how the administration plans to spend the remaining $350 billion of the $700 billion rescue package started by the Bush administration. The plan counts on encouraging private investors to buy more than $1 trillion in troubled assets from the banks, clearing their balance sheets and freeing them to offer credit to businesses and consumers.

Obama's full prepared remarks are below:

President Obama, in the first primetime press conference of his young administration, used the huge TV audience to shore up public support for his economic recovery plan.

Noting that last month, the country lost 598,000 jobs -- "nearly the equivalent of losing every single job in the state of Maine" -- he said that only government can provide an adequate response.

"It is absolutely true that we cannot depend on government alone to create jobs or economic growth," he said in opening remarks before taking questions from reporters. "That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life."

But he acknowledged that the plan working its way through Congress is "not perfect."

"No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans."

Asked whether his dire warnings might be hurting the economy, he noted that 3.6 million jobs have been lost since the recession began in December 2007 and the job loss is accelerating.

"This is not your ordinary, run of the mill recession," he said, calling it the worst since the Great Depression.

Asked how Americans should measure the success of the stimulus plan and other initiatives, Obama said the first step is whether jobs are created or saved -- he has set a goal of 3 to 4 million in two years. The second measure is whether credit is freed up for businesses and consumers. The third metric will be whether the housing market is stabilized -- foreclosure rates no longer increasing and housing values not plummeting.

That progress, he said, he hopes will be visible next year. "This year is going to be a difficult year," Obama said.

He directly addressed criticisms of the stimulus plan.

To those who oppose any government intervention, he repeated that only the federal government can break the cycle that is driving down demand for goods and services. He also said that these critics seem to be refighting the philosophical battle over the New Deal, which he said he believed had been resolved.

To those preaching tax cuts, he said while he will accept ideas from across the political spectrum, he resolutely will not return to the "failed theories" of the past eight years, which he blamed for precipitating the crisis.

To those who say some of the spending is unnecessary, he said that the money to make government buildings energy
efficient and to build new schools will create jobs now and pay dividends later.

To those who warn of the rising federal deficit, Obama shot back that he inherited a trillion-dollar deficit this year, plus the economic crisis.

"I didn't come into this ginned up to spend $800 billion," he said. "That is not how I envisioned my presidency beginning."

Asked about whether he is moving away from bipartisanship after only three Republicans in the Senate and none in the House have supported the stimulus bill, Obama said that a lot of bad habits have taken root in Washington and it "will take time" to change them.

On other topics, he reiterated that he wants to focus on diplomacy with Iran, particularly on its nuclear ambitions; he said Afghanistan, where he plans to send more US troops, will be "a major challenge;" and he said Alex Rodriguez's admissions of performance-enhancing drug use tarnishes baseballs and sends the wrong message to children.

And underscoring the rise of the Internet, Obama called on a reporter for the Huffington Post website, who asked whether he agreed with Senator Patrick Leahy's proposal for a "truth and reconciliation" commission to look at alleged Bush administration misdeeds in the treatment of terrorist detainees and other issues.

Obama said he did not know enough about the proposal to answer, but repeated that while "nobody is above the law," he wants to look ahead and fix policies going forward.

Republican National Committee Chairman Michael Steele responded by saying Democrats in Congress had loaded the stimulus bill with wasteful spending:

"The legislation moving its way through Congress bares little resemblance to what President Obama described at tonight's press conference. The spending bill written by Nancy Pelosi and Harry Reid is filled with unnecessary and wasteful programs that will saddle future generations with massive debt. With so many Americans looking for work, it's important to act quickly, but also act prudently. This bill will fail to have the necessary and direct impact it should - in part - because the Democrats rejected proposals to improve the legislation. The President has called on both parties to work together to solve this crisis; I hope Congressional Democrats will heed his call and listen to all ideas."

Obama's full introductory remarks are below:

By Lisa Wangsness, Globe Staff

WASHINGTON -- Leaning on his cane but smiling broadly, Senator Edward M. Kennedy returned today to the Capitol to vote for ending debate on the stimulus bill, a key hurdle for its passage.

Expressing deep concern about the economy, he told reporters waiting outside: "It is time that we take action now." With little fanfare, he walked into the Senate chamber alongside his fellow Massachusetts senator, John F. Kerry, and stayed for only two minutes or so, just long enough to cast his vote and greet a couple of his colleagues.

Senator Barbara Boxer of California looked up as he arrived: "Here comes my hero," she said quietly, beaming.

His appearance was low-key enough, but that he felt the need to come at all underscored the importance of the bill and the unexpectedly tortured politics of getting it through Congress. Kennedy is suffering from brain cancer and had a seizure the last time he was in Washington, for President Obama's inauguration.

Just after the Jan. 20 ceremony, Kennedy collapsed at a Senate luncheon; doctors attributed the seizure to fatigue. He had been recuperating in Florida until late last week, when amid a frantic back-and-forth between Democratic leaders and a few Republicans, senators said Kennedy flew back to Washington to support the stimulus package.

Senator Jay Rockefeller of West Virginia said Kennedy called Senate Majority Leader Harry Reid on Friday and said: "Kennedy, reporting for duty."

But Kennedy did not appear at the Senate until today.

When he did, he seemed to do his best to avoid attracting attention. Venturing barely 20 feet into the chamber, he extended a trembling hand to Senator Max Baucus, the Finance Committee chairman who managed the floor debate. He greeted Reid, who patted his shoulder. Senator Patty Murray of Washington turned from her conversation and smiled.

Kerry tapped him on the arm, and Kennedy signalled his support for the bill to Senator Jeanne Shaheen of New Hampshire, who was presiding over the vote. A few moments later, he turned and ambled off the floor with Kerry at his side.

"He is a hero," Boxer said after the vote. "Because the fact is, we needed his vote today."

She said the three Republican senators who are backing the stimulus package wanted to have more than 60 votes -- the bare minimum -- to end debate. Kennedy's was number 61.

"So it was very selfless of him," she said. "He's a very selfless person. I'm so grateful to him for doing this."

Kennedy plans to return to cast a final vote on the stimulus bill Tuesday, Kerry said in an interview. An aide said Kennedy planned to travel back and forth between Florida and Washington until the weather gets warmer in the capital.

Kerry said he spoke with Kennedy for about 20 minutes in his office before they went to vote, and Kennedy told him he was frustrated that Congress couldn't have passed a stimulus sooner.

"He's looking forward to continuing to get back, and taking on healthcare," Kerry said.

In a statement, Kennedy said the consequences of not passing a stimulus package would make the consequences of the economy's "free-fall....even more disastrous."

"I returned to the Senate today to do all I can to support our president and his plan to get our country back on track," the statement said. "We face a historic crisis and must act quickly, boldly, and responsibly to enable our economy to begin growing again in Massachusetts and across America."

It's a partisan battle for the public's hearts and minds as President Obama takes a road trip to sell an economic stimulus plan, while Republicans rail against it as another Democratic spending spree.

Today, Obama heads to Elkhart, Ind., where the unemployment rate hit 15.3 percent in December, more than twice the national average and up nearly 11 percentage points in just a year.

Tonight at 8, the new president holds his first primetime news conference, from the East Room of the White House.

Tuesday, Obama goes to Fort Myers, Fla., among the fast-growing Sunbelt cities slammed by the foreclosure crisis. Wednesday, he heads for northern Virginia.

Obama has added another stop on his tour -- the proverbial Peoria, Ill., on Thursday, White House press secretary Robert Gibbs told reporters on Air Force One, according to the press pool report.

In his weekly radio and Internet address on Saturday, Obama made his case gain: "Legislation of such magnitude deserves the scrutiny that it's received over the last month, and it will receive more in the days to come. But we can't afford to make perfect the enemy of the absolutely necessary. The scale and scope of this plan is right. And the time for action is now.

"Because if we don't move swiftly to put this plan in motion, our economic crisis could become a national catastrophe," he added.

But Michael Steele, the new chairman of the Republican National Committee, responded with a message of his own to give the party line.

"Democrats have controlled both branches of government for less than a month. And you have to wonder if all that power has gone to their heads," Steele said. "For the last two weeks, they've been trying to force a massive spending bill through Congress under the guise of economic relief."

Obama heads into the week with an advantage, according to a new Gallup poll.

According to the survey conducted Friday and Saturday, 67 percent of Americans approve Obama's handling of the stimulus bill, while only 48 percent approve how Democrats in Congress have conducted themselves, and only 38 percent approve of what congressional Republicans have done.

Obama has had far higher job approval ratings in general than Congress.

Another poll released today, however, showed far less support for the stimulus bill than for Obama, himself.

The CNN/Opinion Research Corp. survey found that 54 percent support the package, but that 55 percent believe it would spend too much money; 64 percent say it would help a lot or help the economy some.

The poll also found that while 74 percent believe that Obama is doing enough to cooperate with Republicans in Congress, but only 39 percent believe that Republicans are reciprocating adequately. Obama's overall job approval rating is 76 percent.

The survey, conducted Saturday and Sunday, has a margin of error of plus or minus 3.5 percentage points.

Another survey released today also found dwindling support for the stimulus plan, largely because it has become a more partisan issue.

While 51 percent of Americans still say the package is a good idea, that's down from 57 percent last month, and unfavorable views have risen to 34 percent from 22 percent, according to the survey conducted Wednesday through Sunday by the Pew Research Center for the People & the Press.

Among Republicans, 63 percent now say the bill is a bad idea – up 20 percentage points since last month. While Democrats are also more skeptical, 70 percent still view the plan positively, according to the poll.

According to the press pool report, senior strategist David Axelrod pushed back at the idea that public support is slipping for the stimulus plan.

“There is strong support for this,” he said. “I think the Gallup poll this morning reflects everything I’ve seen for the last couple of weeks.”

“One thing that we learned over two years is that there’s a whole different conversation in Washington than there is out here. If I had listened to the conversation in Washington during the campaign for president, I would have jumped off a building about a year and a half ago.”

Not a single Republican supported the $820 billion version passed by the House on Jan. 28. Only three Republicans appear lined up to back the $827 billion version the Senate is expected to approve on Tuesday.

Two of them are Maine's senators, Susan Collins and Olympia Snowe. Americans United for Change, a progressive and labor advocacy group, is running a radio ad praising them.

"The clock's ticking - and our economy continues to get worse and worse," the spot says. "That's why it's critical that the Senate pass President Obama's jobs and economic recovery bill right away. Fortunately, Maine's two Senators -- Olympia Snowe and Susan Collins are providing the leadership we need to get the job done. Senators Snowe and Collins have worked with President Obama and other Senators to reach agreement on a plan that has support from a broad range of groups - including the US Chamber of Commerce and organized labor."

Even with Senate approval, the deal could fall apart when a House-Senate conference committee tries to reach a compromise that both chambers would have to pass again before the package reaches Obama's desk. It will take the legislative equivalent of a sprint to give final approval before Congress is supposed to leave for its President's Day recess on Saturday, Obama's deadline.

"This bill is not perfect," Collins said this morning on NBC's "Today" show. "We're not claiming that. But in fact I think this bill will help to create 3.5 million jobs. ... We're facing a crisis and it makes no sense to have a partisan divide."

By Sasha Issenberg and Lisa Wangsness, Globe Staff

WASHINGTON -- Senate Democrats emerged this evening from days of negotiations to declare that they had reached a deal with at least two moderate Republicans to approve a shrunken version of the economic stimulus package that passed the House last week.

The agreement on what Senate Majority Leader Harry Reid called "the Obama plan" promised to deliver the new president his most important legislative victory so far. But the bill still demanded further negotiation and would only become law only after far more wrangling than the administration anticipated and with far less Republican support than it had pledged.

Those involved in negotiations said the deal on what they billed as a $780 billion package -- approximately $40 billion less than the House edition and nearly $160 billion less than an earlier Senate draft -- came about after a working group of centrists agreed to reduce both spending programs favored by Democrats and tax cuts pushed by Republicans. The final Senate bill would likely be around $800 billion, members of both parties said.

"We're going to make sure we’re doing everything we can make sure this severe recession does not become another Great Depression," Reid said on the Senate floor. "That's why we worked all week to come up with a bill."

Reid indicated a vote on the deal by the full Senate is unlikely until at least later this weekend. With every vote potentially crucial, Senator Edward M. Kennedy of Massachusetts traveled to Washington to vote for the bill, senators said last night, though he was not seen at the Capitol. Kennedy, who is battling brain cancer, has been recuperating in Florida since Inauguration Day, when he suffered a seizure at a luncheon with the new president. Aides to Kennedy did not return calls today.

If the bill were to pass the Senate, a conference committee including members of both the House and Senate would convene to reconcile differences between the two bills, which Senator Kent Conrad of North Dakota, chairman of the Budget Committee, said would pose a new set of challenges.

"There are some very significant differences now between the Senate package and the House package," Conrad said. "And with every difference, there's a constituency."

The deal-making was led by Maine Republican Susan Collins and Nebraska Democrat Ben Nelson, who shuttled for days between committee rooms in Senate office buildings and unmarked hideaway offices deep in the Capitol. The ranks of negotiators dwindled from as many as 20 -- at one point, deliberations revolved around a "gang of 18" -- down to four.

"This has been an extremely difficult deliberation, but I believe that we have an obligation to start solving the problems facing this country," said Collins, who is, along with fellow Maine Senator Olympia Snowe and Pennsylvania Senator Arlen Specter, one of three Republican votes that Democrats are counting on to reach the 60 votes necessary to break a potential GOP filibuster.

"The American people don't want to see partisan gridlock," Collins said on the Senate floor. "They don't want to see us divided and fighting. They want to see us working together to solve the most important crisis facing this country."

Tonight, White House press secretary Robert Gibbs responded to the tentative deal:

"On the day when we learned 3.6 million people have lost their jobs since this recession began, we are pleased the process is moving forward and we are closer to getting Americans a plan to create millions of jobs and get people back to work," he said in a statement.

The tentative compromise emerged after President Obama seized today on the latest round of what he called "very troubling" news on jobs to ratchet up the pressure on Congress.

The unemployment rate rose to 7.6 percent nationwide in January, the highest since September 1992. The Labor Department also reported that 598,000 jobs were lost last month, the most since 1974, and that 3.6 million jobs had been lost since the recession began in December 2007.

"These numbers demand action," said Obama, who plans to push for the plan in town hall meetings Monday in Indiana and Tuesday in Florida bracketing a primetime news conference at the White House. "It is inexcusable and irresponsible to for any of us to get bogged down in distraction and delay while millions of Americans are being put out of work."

Throughout the day, Collins said she would not herself vote for anything resembling the House version, which she described as "bloated, expensive, and ineffective." The bill -- composed largely under the direction of House Speaker Nancy Pelosi and which passed without a single Republican vote -- was a "Christmas tree upon which every member, virtually, had hung his or her favorite program."

The compromise eliminated $86 billion in spending and $18 billion in tax cuts, senators said. Conrad said the spending reductions were designed to eliminate any spending that was not quick, job-creating, or temporary. He said the spending cuts came from an array of programs, but education "took a big hit."

Other programs prized by Democratic interest groups sustained damage. The compromise lowered subsidies to help the unemployed keep their health insurance by $7 billion -- so the government will pay only half of COBRA premiums rather than 65 percent as originally planned -- and reduced the $20 billion the House appropriated for health information technology.

"Did we get everything we wanted?" asked Senator Bernie Sanders, a Vermont independent who operates as one of the most liberal members of the Democratic caucus. "No, we did not."

Yet most Republicans appeared unmoved by the compromise, which they said still reflected Democratic priorities and would likely emerge from the Senate at nearly the same size as the House bill.

An aide to Senate Minority Leader Mitch McConnell said that with the addition of three amendments approved earlier in the week -- to fund the National Institutes of Health, and offer new tax credits for buyers of new homes and cars -- the bill's total cost would be "north of $800 billion."

By Michael Kranish, Globe Staff

WASHINGTON -- Senator Judd Gregg, the New Hampshire Republican nominated to be Commerce Secretary, once was seen as a key ally in President Obama's effort to win bipartisan support for his economic stimulus bill.

But Gregg's spokeswoman said today that the senator would recuse himself from voting on the bill, and would not even participate in debate on it.

In fact, the spokeswoman said, Gregg will not vote on any bill or other matter, in committee or on the floor.

In recusing himself, Gregg deprived Obama of a potential key vote in support of the package, as well the influence Gregg might have had in persuading other Republicans to follow his lead.

Gregg's spokeswoman, Laena Fallon, would not speak about the senator's decision other than to say, "He thinks this is the most appropriate thing to do right now."

A White House spokesman declined comment, instead referring to the statement from Gregg's office.

When Obama introduced the senator as his Commerce nominee on Tuesday, the president did so by underscoring the importance of passing the stimulus plan in a bipartisan fashion. Gregg then left the impression that he supported Obama's policy, although he did not explicitly endorse the Democratic stimulus proposal before the Senate.

"You've outlined an extraordinarily bold and aggressive, effective and comprehensive plan for how we can get this country moving," Gregg said to Obama at the nomination ceremony. "This is not a time for partisanship. This is not a time when we should stand in our ideological corners and shout at each other. This is a time to govern and govern well."

But now, Gregg's decision to recuse himself from voting is bound to raise questions about why he is remaining in office if he won't perform such an essential duty of a senator -- voting on legislation. It also may raise questions about whether he is seeking to avoid putting himself in the embarrassing position of voting against Obama's top economic priority.

Carl Tobias, a professor at the University of Richmond's School of Law, said today that he understood that Gregg wanted to avoid casting votes while his nomination is pending to avoid any appearance of impropriety, but he said it was not necessary. He said that a member of Congress usually recuses himself from voting on a matter when there is a personal or financial conflict with legislation.

"It seems that he could continue to discharge his duties as senator by participating in the debate on the stimulus and voting," Tobias said.

Every senator knows that Gregg has been picked by Obama for the Commerce job, and "they can always discount what he says accordingly."

In an interview last week, shortly before word leaked out that he was to be the Commerce nominee, Gregg said that he hoped to play a key role in helping Obama win passage of the bill. While Gregg said he could not support the bill as it was written by the House, he saw room for compromise if spending was cut and funds were provided to forestall home foreclosures.

"I've talked to the White House, given them some ideas," Gregg said last week. "I think it is good for the nation if we can do a bipartisan, substantive" piece of legislation.

Gregg's work as a deal broker, however, apparently ended as soon as it became clear Obama would make him the Commerce pick.

Gregg has said he won't resign until he is confirmed for the Commerce post. If he were to resign now, Democrats would need only 59 votes to overcome potential Republican procedural hurdles instead of the current 60. There are currently 99 senators, with a Minnesota seat still vacant and being contested in the courts. Under Senate rules, 60 votes are needed to overcome a filibuster when 99 or 100 senators are in office, but only 59 votes would be needed to overcome a filibuster if there are 98 senators, a Senate official said.

New Hampshire's Democratic governor, John Lynch, plans to appoint a Republican, Bonnie Newman, to replace Gregg.

With 56 Democrats and two Independents who caucus with the party, party leaders were searching today for several votes to get to 60 and ensure passage of the bill.

By Matt Viser, Globe Staff
Governor Deval Patrick this afternoon blasted the US Senate for not acting more swiftly on approving a federal stimulus package that would benefit state governments.
“That there is this much resistance from people who over a weekend came up with hundreds of billions of dollars for the financial industry is just extraordinarily frustrating,” he said in a conference call with reporters to discuss his West Coast trip to recruit new businesses to Massachusetts. “While this quarreling goes on, people are hurting. The sooner the Senate acts the better for all of us.”
Patrick said he has been speaking with fellow governors, several senators, and officials in the White House.
“I think there’s a deal here to be had,” Patrick said. “But we’re going to have to stop the posturing and get on to results.”

Patrick was among a bipartisan group of 19 governors who issued a letter this week in support of the stimulus package.

But as a bipartisan group of senators try to trim the $900 billion-plus package, one area they are looking at is direct aid to states.

Advocacy groups are also jumping on the job losses, the worst in decades.

The Alliance for American Manufacturing said about one third of the jobs slashed last month were in manufacturing, about 207,000.

“The deteriorating jobs numbers show the urgent need for action on economic recovery legislation. Every day of delay means we are only compounding our nation’s economic challenges. For the sake of America’s manufacturing workers and businesses, the Senate should pass a sizable, strategic, and sustained economic recovery bill with assurances for domestic sourcing. We applaud the Senate’s action so far. Now it’s time to get this legislation to President Obama’s desk,” Scott Paul, the alliance's executive director, said in a statement.

The Laborers’ International Union of North America said that 111,000 construction jobs were lost, increasing the industry's unemployment rate to 18.2 percent and marking the 19th consecutive month with significant job loss in the construction industry. In all, 995,000 construction jobs have been lost since the start of 2007.

"Today’s jobs reports shows another disastrous month for construction jobs. Every month we see massive job loss in the construction industry and every month it gets worse. Nearly a million construction jobs have disappeared in two years, taking paychecks away from struggling families and consumers away from an ailing economy. It’s a no brainer: by building America we can put people back to work taking care of the things our country desperately needs, while turning our economy around and leaving behind a lasting legacy for generations to come," the union's general president Terry O'Sullivan said in a statement.

Americans United for Change, a coalition of progressive and labor groups, ripped Republicans, whom it said are stalling the recovery package.

“Republicans have been staging the equivalent of a filibuster on President Obama’s jobs and economic recovery plan by filling hundreds upon hundreds of frivolous amendments and by nit picking to death small items in the bill when the country is facing its biggest economic crisis in a generation," Brad Woodhouse, the group's president, said in a statement. “Nearly 600,000 Americans lost jobs last month meaning that every day that Senate Republicans stall passage of the bill 20,000 more Americans will lose their jobs. Republicans clearly want to exact a political price on the President for doing what the American people elected him to do – change the tone and policies in Washington and to get our economy moving again. Instead of playing politics – and instead of insisting on the failed trickle down policies of the past eight years that drove the economy into the ditch in the first place – Republicans should listen to the American people and the hundreds of economists from across the ideological spectrum who are calling for urgent and immediate action to stem the downward spiral the economy is in today. Obstruction is not the answer. The more feet dragging Senate Republicans engage in, the more attempts to water the bill down down, the more misguided attempts to replace stimulative spending projects with ineffective tax breaks for the wealthy and corporations – the more Americans will lose their jobs, homes and healthcare. It’s as simple as that.”

Meanwhile, labor groups are citing the jobs numbers to push for the confirmation of Hilda Solis, the California congresswoman whose nomination as labor secretary has been held up because of questions about her husband's business tax liens and her pro-union activities.

"We cannot continue to fiddle as the economy burns. It is urgent for the American people to have an aggressive, emergency economic recovery plan that will put people back to work and keep families in their homes, and a strong Department of Labor," AFL-CIO President John Sweeney said in a statement.
"Enough is enough. Senate Republicans can't just oppose a Secretary of Labor because she supports working Americans and favors curbing excessive corporate power. They need to stop obstructing and confirm Rep. Solis now."

Chris Chafe, head of the Change to Win labor coalition, added:

"A strong Department of Labor is vital to helping American families stay afloat during this severe economic crisis. As our nation hemorrhages millions of jobs -- this morning’s announcement indicates that over one million workers have lost their jobs just since Thanksgiving -- America’s workers are continuing to be denied a leader that can help restore the economy, rebuild the middle class and renew the American Dream because of the partisan politics of a few.

“The Republican obstruction of the nomination of Hilda Solis as Labor Secretary is a slap in the face to America’s hardworking men and women and to the economic recovery our nation so desperately needs. Americans voted for change in historic numbers in November, and today’s economic news speaks to the bold actions needed from our nation’s leaders. Yet, instead of working together to provide relief, Senate Republicans are offering more of the same divisive politics of the past."

Families USA, a health advocacy group, issued a report today saying that millions of workers who lost their jobs are also losing their health insurance coverage.
According to the report, only one out of five unemployed workers who have annual incomes below 200 percent of the federal poverty level ($44,100 in annual income for a family of four) have private or military health coverage. These workers represent half of unemployed workers under 65 years of age, the study says.

The House version of the stimulus package includes $40 billion to subsidize health care insurance for the unemployed, and the working Senate version includes $26 billion.

“Losing a job often means losing health coverage,” Ron Pollack, executive director of Families USA, said in a statement. “Most laid-off workers can’t afford COBRA coverage and do not qualify for public health safety-net programs – and, as a result, millions of middle-class and lower-income workers become uninsured.”

Mitt Romney deflects talk of being a candidate for health and human services secretary -- what would be the fourth Republican in President Obama's cabinet.

And in the Q&A with Time magazine, he probably doesn't enhance his prospects, if any, with a rather critical assessment of the new president's performance so far.

"I think President Obama is off to a rocky start. The theme 'Yes, we can' seems to have been replaced with 'Well, maybe we can't,' Romney says. "I believe that with all the challenges America faces, the simple solutions and the hope that were sold by the Obama team are inadequate to the task ahead."

While some Republicans are already talking Romney up for a second presidential run in 2012, he was typically vague when asked about his political prospects.

"I really don't know what the future holds," he said. "Like most Americans, I want to see Barack Obama adopt effective, correct principles and successfully lead our country. And so any discussion of future politics for me is, I think, premature."

UPDATE: Romney also has an opinion piece on CNN.com critiquing Obama's economic recovery plan, saying the "Obama spending bill would stimulate the government, not the economy."

With the Senate primed to vote on its version of the economic stimulus package as soon as tonight, President Obama is stepping up his sales pitch to put public pressure on lawmakers to approve it.

UPDATE: The White House announced this afternoon that Obama will hold a press conference in primetime at 8 p.m. Monday.

In two appearances on Wednesday, he warned of catastrophe if the plan isn't passed soon and hit back against critics of the plan, arguing that their solutions were rejected in November by voters who put him in office.

He fleshed out his case in an op-ed piece published today in The Washington Post.

In the opinion piece, which was also distributed today by the White House, the president writes that "each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."

At an appearance at the Energy Department this afternoon, Obama said the debate over the stimulus plan is no abstract exercise. Citing new numbers out today that new unemployment claims totaled 626,000 in the last week of January, he said the numbers and the American people are demanding action.

While the bill has received the proper scrutiny over the past few weeks, "the time for talk is over," he declared. "The time for action is now."

Obama hit back again at those who are calling for tax cuts rather than government spending to stoke the economy.

"Those ideas have been tested and they have failed," he said.

And as Obama turns up the heat on Republicans, they are responding by complaining that the bipartisanship Obama promised to bring to Washington is sorely lacking in the debate on the stimulus plan.

Senator Lindsey Graham of South Carolina, a close ally and friend of GOP presidential candidate John McCain, took to the Senate floor to make his point.

"If this the solution to George Bush's problems," Graham said, the way Democrats are pushing the stimulus will make matters worse.

"If this is the change we can believe in, America's best days are behind her," he added.

Organizing for America, the new vehicle for Obama's campaign apparatus, is also trying to build public support.

It sent backers a video of Obama's television interviews on Tuesday, when he explained the need for the stimulus plan, and is organizing house parties this weekend.

"You can help make sure the American people have all the facts so they can support this crucial effort to boost our struggling economy," campaign manager David Plouffe told supporters. "The President is leading. Help is on the way."

President Obama announced this afternoon that he is issuing a memorandum directing the Energy Department to come up with new guidelines to increase the efficiency of household appliances.

He said that over 30 years, the new guidelines would save the equivalent of the energy produced by all coal-fired plants for 2 years.

Obama called the changes "a significant down payment" on a clean energy future, and promoted the alternative energy components of his economic stimulus package.

The president hit back at critics who label as "pork" the provision to convert the federal vehicle fleet to cleaner, more efficient fuel sources. He said it will save taxpayers money, create jobs, and help the environment.

"Are these folks serious?" he asked of the skeptics.

"Washington may not be ready to get serious about energy independence, but I am," he added.

To read the memorandum, click here.

Obama's full remarks are below:

Vice President Joe Biden, joining in the hard sell for the economic stimulus plan, went today to a commuter rail station in the Washington, D.C., suburb of Laurel, Md., to highlight the infrastructure spending in the bill.

Biden said that President Obama's plan would create 400,000 jobs in the next two years by investing at least $100 billion in mass transit systems, highways, bridges, ports -- what the White House calls the largest increase in infrastructure spending since the creation of the national highway system in the 1950s.

But fellow Democrats in the Senate fell two votes short on Tuesday of adding $25 billion for highways, mass transit, and water projects to the package. Republicans blocked the move, insisiting that any additional infrastructure spending be offset by spending cuts elsewhere in the package.

Critics of the $819 billion version of the stimulus bill passed by the House last week say it falls far short on infrastructure spending -- which many economists say is one of the quickest ways to create jobs -- compared to the pledges the president has made. Analysts computed that only 5 percent of the House legislation would go to highway, mass transit, and rail projects.

Biden's full remarks, and a question-and-answer session -- as provided by the White House -- are below:

The White House report on the infrastructure component of the package is also below:

A bipartisan group of senators is meeting today on Capitol Hill to try to make a deal on the stimulus package -- and possibly set the stage for a vote tonight.

Senator Susan Collins of Maine is among the key negotiators as moderate Republicans like her and conservative Democrats strip out objectionable spending that could streamline the bill in shape that could draw at least 60 Senate votes and overcome procedural hurdles that Republican foes could put in the way.

Before going into the closed-door meeting, Collins told CNN that she met with Senator Ben Nelson, a conservative Democrat from Nebraska, late into the night Wednesday to find "a way to proceed" and to "more carefully focus the bill."

Critics of the bill say the current $900 billion-plus Senate version includes too many projects that would not create jobs quickly and should not be in the package. Those same critics are even more harsh in the opprobrium of the $819 billion version passed by the House last week without a single Republican voting in favor.

President Obama is backing up his outrage over Wall Street pay with action today, announcing plans to put a $500,000-a-year limit on the salaries of CEOs whose companies dip into the government's financial rescue fund.

Firms that want to pay executives more than $500,000 would have to use stock that could not be sold until the firms pay back the government.

"In order to restore trust, we’ve got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street," Obama said.

"We all need to take responsibility. This includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that’s the height of irresponsibility. That’s shameful. And that’s exactly the kind of disregard of the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else.

"This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we certainly believe that success should be rewarded. But what gets people upset – and rightfully so – are executives being rewarded for failure. Especially when those rewards are subsidized by US taxpayers...

"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste, it’s a bad strategy and I will not tolerate it as president. We’re going to be demanding some restraint in exchange for federal aid – so that when firms seek new federal dollars, we won’t find them up to the same old tricks."

Obama's full prepared remarks are below. The new pay regulations, as outlined by the White House, are also below.

Obama last week lambasted as the "height of irresponsibility" and "shameful" the $18 billion-plus in bonuses that Wall Street firms paid last year, one of their worst in history that forced them to seek government help.

Obama, back when he was a US senator running for the nation's highest office, voted for the $700 billion financial bailout. But now, he agrees with many that the first $350 billion spent -- mostly by investing to prop up banks -- has not done the job to free up credit.

Geithner plans to unveil next week a new framework for spending the remaining money.

As the Obama administration retools the plan, a watchdog group reported today that firms receiving the bailout money have reaped a huge return on investment.

The Center for Responsive Politics said that the finance and auto companies spent a total of $114.2 million on lobbying in the last year and in campaign contributions for the 2008 election. The companies received have received $295.2 billion so far from the rescue plan, "an extraordinary return of 258,449 percent."

"Even in the best economic times, you won't find an investment with a greater payoff than what these companies have been getting," Sheila Krumholz, the center's executive director, said in a statement. "Some of the companies and industries that have received payments may now consider their contributions and lobbying to be the smartest investments they've made in years."

The predictions that Susan Collins of Maine, a moderate Republican, would play a key role in the Senate bridging the two parties is coming to pass.

Collins has been summoned to meet this afternoon at the White House with President Obama about the stimulus plan, a Collins aide told the Associated Press.

With the blessing of Democratic leaders, Collins is working with other moderate senators including Ben Nelson, a Nebraska Democrat, to cut spending in the plan to get it in a form that would draw broad, bipartisan support.

Republicans oppose much of the spending included in the $819 billion version approved by the House last week without a single Republican vote. Obama is hoping to get some GOP backing in the Senate.

The president used an announcement of new limits on executive pay at firms receiving federal aid to press again today for quick action on the stimulus plan.

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future. Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred."

He hit back at criticisms of the plan from Republicans, which he said "echo the very same failed economic theories that led us into this crisis in the first place – the notion that tax cuts alone will solve all our problems; that we can ignore fundamental challenges like energy independence and the high cost of healthcare."

"I reject those theories," he added, "and so did the American people when they went to the polls in November and voted resoundingly for change. So I urge members of Congress to act without delay. No plan is perfect, and we should work to make it stronger....Let’s not make the perfect the enemy of the essential. Let’s show people all over our country who are looking for leadership in this difficult time that we are equal to the task."

As the White House continues trying to build support for its economic recovery plan, about 20 mayors from across the country will be making a cameo appearance today.

Miami Mayor Manny Diaz is leading the delegation from the US Conference of Mayors, which also includes Providence Mayor David Cicilline.

He leads the capital of a state among the hardest hit by the deepening recession. Rhode Island's unemployment rate hit 10 percent in December, the highest in 30 years. The state is suffering with the same housing and retail downturn as elsewhere, but also failed to replace its manufacturing base like some other states did.

The mayors urged Congress to get past policy and partisan differences and pass a plan.

"We need action now," Akron Mayor Donald L. Plusquellic said.

A bipartisan group of 19 governors, including Deval Patrick of Massachusetts, issued a letter in support of the stimulus plan that the White House released on Tuesday. The Senate is busily drafting its own version that will be significantly different than the $819 billion version passed by the House last week.

Public support for the stimulus package, meanwhile, appears to be dropping as criticism grows louder.

A Rasmussen Reports poll says that 37 percent favor the legislation, 43 percent are opposed, and 20 percent are not sure.

Earlier surveys showed a plurality in favor, 45 percent two weeks ago and 42 percent last week. Opposition has grown from 34 percent two weeks ago to 39 percent last week, Rasmussen says.

As part of its hard sell, the White House this afternoon released job-creation estimates for Eastern states from the economic recovery package.

It said that of the 3 million to 4 million jobs the plan would save or create, 800,000 of them would be in 10 Eastern states.

The estimates include 83,000 jobs in Massachusetts, 44,000 in Connecticut, 17,000 in New Hampshire, 16,000 in Maine, 13,000 in Rhode Island, and 8,000 in Vermont.

President Obama introduced GOP Senator Judd Gregg of New Hampshire as his choice for commerce secretary this morning, saying that Gregg is the right person to help create jobs during and after the economic recovery.

Obama said Gregg has "seen from all angles" how the economy works best, starting from when he saw his father Hugh, like him a former governor, run a small business in Nashua, N.H. Gregg is also "famous or infamous" on Capitol Hill for his fiscal discipline, the president said.

While he and Gregg don't agree on everything -- including who should have won the November election -- they agree on the need to lift people out of the recession, Obama said.

"With the stakes this high, we cannot afford to get trapped in the same partisan gridlock," said Obama, who used the opportunity to again make a sales pitch for his stimulus package.

After thanking Obama for what he called a "rather extraordinary step," Gregg praised Obama's "bold" stimulus plan.

"This is not a time for partisanship," Gregg said. "This is a time to govern, and govern well."

Gregg also thanked New Hampshire Governor John Lynch, a Democrat, who is expected to name a Republican to serve out the remaining two years in Gregg's term. The most-mentioned possibility is J. Bonnie Newman, a former Reagan administration official.

Lynch has scheduled a news conference for 4:30 p.m. today to announce his pick to replace Gregg.

White House spokesman Robert Gibbs acknowledged that New Hampshire Governor John Lynch talked to the Obama team about the Gregg nomination.

But Gibbs denied that the White House had any role in Lynch's decision of who should replace Gregg.

Meanwhile, Representative Carol Shea-Porter addressed early speculation that she would run for Gregg's seat in 2010.

"It is still very early and I am focused on my work for New Hampshire and the country," Shea-Porter said in a statement.

Obama's first choice for the job, New Mexico Governor Bill Richardson, a Democrat, withdrew amid an investigation of state contracts and political donations.

If confirmed, Gregg would be the third Republican in Obama's cabinet, following Defense Secretary Robert M. Gates, who stayed on from the Bush administration, and Transportation Secretary Ray LaHood, a former Illinois congressman.

Even before his name was bandied about for commerce secretary, Gregg had emerged as a key ally for Obama on economic policy. While many congressional Republicans had slammed Obama's stimulus plan in particular, Gregg had called for a bipartisan approach to the nation's economic crisis.

Gregg, 61, has been in elected office since 1979, the last 16 in the Senate.

Former Massachusetts Governor Mitt Romney praised Obama's selection of Gregg.

"Senator Judd Gregg is an excellent choice for Commerce Secretary. He will bring a much-needed sense of fiscal discipline to the affairs of the executive branch, and an appreciation of the need to adopt policies that encourage job growth and creation. Having distinguished himself through a long career of service to the people of New Hampshire, Senator Gregg now has a chance to put that service to work for a grateful nation."

The full remarks of Obama and Gregg, as released by the White House, are below:

The glad tidings between President Obama and presidential rival John McCain seem to be over.

McCain was very gracious in defeat, they made very nice in the weeks after the election, and McCain publicly praised many of Obama's cabinet picks and initial decisions.

But now McCain is sounding off on the economic recovery plan.

Through his Country First political action committee, the Arizona senator urged supporters today to sign an online petition against the current package. He also had some harsh words about the lack of bipartisan cooperation.

The message to supporters follows:

"Yesterday, the Senate began debate on an economic stimulus package that is intended to get our economy back on track and help Americans who are suffering through these difficult times. Unfortunately, the proposal on the table is big on the giveaways for the special interests and corporate high rollers, yet short on help for ordinary working Americans. I cannot and do not support the package on the table from the Democrats and the Obama Administration. Our country does not need just another spending bill, particularly not one that will load future generations with the burden of massive debt. We need a short term stimulus bill that will directly help people, create jobs, and provide a jolt to our economy.

"I believe we need to evaluate every bit of spending in this stimulus proposal with one important criteria - does it really stimulate the economy and help create jobs - if the answer is no, it does not belong in a so-called stimulus package. Furthermore, the stimulus must include significant direct relief to American workers in the form of payroll tax cuts and programs to help homeowners keep their homes. Finally, we need an end game to this stimulus so that when our economy recovers, these spending programs do not remain permanent and saddle our children with a skyrocketing national debt.

"I appreciate the discussions President Obama is having with my Republican colleagues, but the time for talking has come to an end and we must now begin some serious negotiation. But as of yet, Republicans have not been given the opportunity to be involved. The House of Representatives passed a stimulus bill without a single Republican supporting it. In the Senate, the Democrat leadership is trying to jam the existing proposal through regardless of reservations from a number of members. With so much at stake, the last thing we need is partisanship driving our attempts to turn the economy around.

"I have long been a fighter against wasteful spending in Washington and long an advocate for a balanced budget -- that will never change. I realize we face extraordinary challenges with our economy today, but that is not an excuse for more irresponsibly from Washington. I hope you will join me in saying no to this stimulus package as it currently exists by signing this petition."

As is often the case in Washington, the presentation is just as important as the policy, and so it is with the economic stimulus plan.

President Obama, while his team tries to quietly jettison the most objectionable parts of the version approved by the House last week, is going on the PR offensive today. He is doing a series of interviews in the Oval Office with the major broadcast and cable networks: ABC, CBS, NBC, CNN, and Fox News Channel.

A new Gallup poll suggests why he's pitching the plan anew to the public -- the survey shows that the recovery package that is the signature effort of his early days in office is far less popular than Obama, himself.

According to the poll, 38 percent of Americans want the recovery package passed as is, 37 percent want major changes, and 17 percent want Congress to reject it entirely.

Among those supporting the president are many of the nation's governors. The White House released a letter today from 19 of them, including Democrats Deval Patrick of Massachusetts, Jon Corzine of New Jersey, and Tim Kaine of Virginia and Republicans Arnold Schwarzenegger of California and Charlie Crist of Florida.

"We urge the Congress to reach prompt resolution of all outstanding differences and you to sign the bill when it reaches your desk,” the letter says. “While we all believe in the importance of free markets, we believe that the markets today need stimulating.”

Meanwhile, a major union today launched an effort behind an amendment proposed by Senators Dianne Feinstein of California and Patty Murray of Washington to boost the infrastructure spending in the package by $25 billion. Spending on roads, bridges, and other public works projects is one of the most effective ways to quickly create jobs, many economists say.

The Laborers’ International Union of North America said it is marshaling its members to lobby the Senate for the amendment, which it says would create 655,000 additional jobs.