WASHINGTON (AP) — Congress is set to tackle the economy this week by considering President Barack Obama’s choice to head the Treasury Department and by acting on legislation to spur economic growth.
The Senate could confirm Timothy Geithner as Treasury secretary as early as Monday, after delaying a vote because Geithner failed to pay some of his federal taxes earlier this decade. Geithner settled his delinquent taxes shortly before Obama nominated him, and senators from both parties have said they expect him to be confirmed. Geithner would oversee the financial industry bailout approved by Congress.
Senate committees are scheduled to take up the massive economic stimulus package Tuesday and the full House is expected to vote on its version of the $825 billion plan Wednesday. The packages dedicate about two-thirds to new government spending and the rest to tax cuts. The proposals would combine tax cuts for individuals and businesses, help for cash-strapped state governments, aid for the poor and unemployed, and direct spending by the federal government.
The goal is to infuse money directly into the economy in the hope of bringing the nation out of recession, while creating 3 million to 4 million jobs. It would be largest economic recovery package ever enacted.
“These problems weren’t made in a day or a week or a month or even a year, and they’re not going to get solved that fast,” said Lawrence Summers, a top economic adviser to Obama.
Congress has given Obama permission to spend the second $350 billion of the Wall Street bailout package. House Speaker Nancy Pelosi, D-Calif., said she is open to additional government rescue money for banks and financial institutions. But she said taxpayers must get an ownership stake in return.
Vice President Joe Biden said Geithner will recommend whether more money is needed for the banks.
On Sunday, Democrats sought to lower expectations for a quick economic recovery, even with major government intervention to stimulate the economy and save financial institutions.
“We’re off and running, but it’s going to get worse before it gets better,” Biden said of the economy.
Republicans want the recovery package tilted more toward tax cuts and have questioned whether government spending programs will revive the economy in the short-term.
“I just think there’s a lot of slow-moving government spending in this program that won’t work,” House Republican leader John Boehner of Ohio said. “We can’t borrow and spend our way back to prosperity.”
The administration has pledged to spend three-quarters of the proposed money in the first 18 months after it is approved.