Obama to meet with Republicans on stimulus package

WASHINGTON (Reuters) - President Barack Obama will visit Congress on Tuesday to try to persuade reluctant Republicans to support a $825 billion package he says is essential to resuscitate a plunging economy.

A week after taking office, Obama faces an economic crisis that seems to worsen by the day. Major U.S. companies cut tens of thousands of jobs on Monday and housing and financial industry troubles continue to mount.

Obama's meeting with the Republican lawmakers comes after Treasury Secretary Timothy Geithner won Senate confirmation, although 34 although Senators voted against him.

With his economic team in place, Obama hopes he can win passage of the stimulus plan by mid-February.

Although the Democratic president does not need broad Republican support, the minority party could put up procedural hurdles to slow the plan's progress.

White House spokesman Robert Gibbs said Obama's meetings with House of Representatives and Senate Republicans would be less a negotiating session than a chance to gather input.

"He wants to hear their ideas. If there are good ideas, and I think he assumes there will be, that we will look at those ideas," Gibbs told reporters.

The House and Senate are expected to approve the package by the middle of next month regardless of how many Republicans embrace it.

While there is strong support in the Democratic-led Congress for bold measures to jump-start the economy, Republicans differ with Obama on how the tax cuts should be structured and have criticized his spending proposals at a time of high budget deficits.

U.S. stocks opened higher on Tuesday, buoyed partly on hopes for swift action by Geithner, the former head of the New York Federal Reserve.

REPUBLICAN QUESTIONS

Some $275 billion of the package would go toward tax cuts. The other $550 billion would pay for public works projects, alternative energy initiatives and would bolster unemployment benefits and other safety-net programs.

Republicans have seized on some spending items, including money for contraceptive programs and college tuition assistance which they say would not further create jobs in the near term.

Senate Minority Leader Mitch McConnell, speaking on NBC's Today show, agreed it was important to throw the economy a lifeline but said Democrats had tilted the package toward excessive spending.

"We're anxious to help him. We think the country needs a stimulus," said McConnell, a Kentucky Republican.

"Listening to what he wanted we think we may be closer to that, oddly enough, than the Democratic majority, which seems to be pulling in the direction of less tax relief and things like fixing up the (National) Mall."

Obama's aides have said three-quarters of the spending would work its way into the economy within 18 months.

According to a report issued late on Monday by the Congressional Budget Office, about 64 percent of the stimulus package would be poured into the economy within 19 months.

The Democratic tax cut plan would direct benefits more toward lower-income workers, even non-income tax payers, while the House Republicans would help all taxpayers.

When some Republicans pressed Obama on Friday to change that part of the plan, he replied that he won the election and was sticking to the plan he had campaigned on.

Gibbs said the comment, meant to be light-hearted, was not an attempt to pursue "cowboy diplomacy."

Another issue that could come up at the Capitol Hill meeting is the shaky condition of the U.S. financial system.

As the credit crunch worsens, Obama's aides are looking at ways to help struggling homeowners and stem banking turmoil.

White House aides have not ruled out Obama seeking addition funds to help the financial sector beyond the $700 billion approved by Congress last fall.

But the bailout program is unpopular with both parties so any request for more money would be a tough sell.

(Additional reporting by Thomas Ferraro and Jeremy Pelofsky; Editing by Alan Elsner)