Barack Obama steps up push for added U.S. economic stimulus

The White House is calling for Congress to urgently pass measures to extend jobless benefits, aid cash-strapped states and provide targeted tax breaks to encourage research and development by businesses.

Obama's Democratic allies, facing congressional elections in November, have grown cautious about additional spending. Seizing on voter anxiety about deficits, Republicans have cast the administration's policies as fiscally reckless as they seek to challenge Democratic majorities in both houses of Congress.

“People are suffering out there. We want to keep this economy growing faster. We want to see an acceleration of job creation. And we have to take some steps to continue in that direction,” top White House adviser David Axelrod told NBC's Meet the Press on Sunday.

His comments came a day after Obama wrote to congressional leaders, urging them to move swiftly to approve new measures to “spur job creation and build momentum toward recovery.”

Senate Democrats have introduced legislation that would renew expiring unemployment benefits, and extend business and individual tax breaks. They would offset some of the bill's costs by raising taxes on hedge fund managers and other steps.

The bill complements one passed in the House of Representatives last month, which would authorize about US$80 billion in new spending and add US$31 billion to the deficit. The cost of the Senate version has not been estimated yet.

Obama also backs a separate measure that would provide cash to states to prevent teacher layoffs but a US$23 billion version of that legislation recently failed in the Senate.

“What the president is saying is, we need to expend additional dollars to make sure that we don't have significant layoffs,” House of Representatives Majority Leader Steny Hoyer, a Democrat, told ABC's “This Week.”

But Hoyer acknowledged growing concern about the U.S. deficit, which reached US$1.4 trillion in 2009 and which the White House projects will hit US$1.6 trillion in 2010.

“I think it's accurate that there's spending fatigue, not only on Capitol Hill, but around the country. People are concerned about the debt level, and we are, as well,” Hoyer said. “But clearly, you cannot not continue to stimulate an economy that is still struggling to get out of the deep ditch that we found it in about 18 months ago.”

In his letter to lawmakers, Obama said last year's US$863 billion stimulus halted a freefall in the U.S. economy after the worst financial crisis since the 1930s Great Depression.

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