US House approves stimulus plan

The US House of Representatives has approved President Barack Obama's economic stimulus plan, which is now being voted on by the Senate.

The process will go on for several hours to allow a senator who is away from Washington to return to the capital and cast his vote.

The $787bn (£548bn) plan failed to get any Republican backing in the House.

Earlier on Friday, Mr Obama said that Congressional approval of the stimulus plan was "critical".

If the Senate backs the package of tax cuts and spending, designed to rescue the ailing US economy, the president will be able to sign it into law.

Its approval by the House of Representatives failed to outweigh US stock market worries about the banking sector. The Dow Jones Index lost more than 1% on Friday.

Members of both houses of Congress reached a deal over the content of the stimulus package on Wednesday.

The president says his plan will "save or create more than 3.5 million jobs".


Split


The revised packaged was backed by 246 House Democrats, while seven Democrats and 176 Republicans voted against it, dashing Mr Obama's hopes for bipartisan support.

Republicans had insisted on larger tax cuts instead of big spending programmes.

The version of the plan approved by the House is split into 36% for tax cuts and 64% percent in spending and money for social programmes.

Republican representative Mike Pence said before the vote: "The only thing the Democrats' stimulus bill will do is stimulate more government and more debt."

But House Majority Leader Steny Hoyer said: "Millions and millions of people... who have lost their jobs and can't put food on the tables of their families will be helped by this bill."


'Driving purpose'


Meanwhile, Mr Obama said that in the longer term the government needed to rein in spending
"We are going to have to once again live within our means," he said.

"We have a once-in-a-generation chance to act boldly, and turn adversity into opportunity, and to use this crisis as a chance to transform our economy for the twenty-first century," the president told members of the Business Council in Washington.

"That's the driving purpose of the recovery and reinvestment plan that I've put before Congress."

"We need to confront the crisis in the housing sector that has been one of the sources of our economic challenges."


Negotiations


The House approved its $825bn version of the package last week without any Republican support.

The Senate voted to approve a different $838bn version on Tuesday, with few Republicans opting to back it.

The two versions had to be reconciled in a joint House-Senate committee before facing final votes in the two chambers.

President Obama increased the pressure on Congress this week, saying he wanted the bill on his desk ready to sign by this weekend
 

Source:BBC