By Richard Cowan and Matt Spetalnick
WASHINGTON (Reuters) - President Barack Obama touted his $825 billion economic stimulus plan to U.S. business leaders, as the House of Representatives edged toward passage of the legislation on Wednesday despite Republican opposition.
House Speaker Nancy Pelosi said Obama sought bold and swift action and "that is exactly what action we are taking today."
Amid attacks from Republicans in Congress that Obama and his fellow Democrats have composed an $825 billion package too flawed to save the stumbling economy, the new president got a boost from corporate heads he met at the White House.
"The message has to be that the situation is dire," said David Cote, chief executive of Honeywell. "It needs to get done fast," he added, referring to the Democrats' economic stimulus plan. "Everybody is being touched by this."
Obama said the 13 CEOs were "on the front lines in seeing enormous problems in our economy right now."
"They understand that when it comes to rebuilding our economy, we don't have a moment to spare," he said in predicting success in passing one of the most expensive single bills ever considered by Congress.
But it is widely acknowledged that ending a 13-month recession will be difficult and economists disagreed over how to do it.
In a full-page advertisement in Wednesday's New York Times a group of economists said they "do not believe that more government spending is a way to improve economic performance." The ad was paid for by the Cato Institute, which supports policies to limit government.
On Friday, the federal government is due to release an estimate of economic performance that economists expect will show the economy contracted at an annual rate of 5.4 percent last year. That would put the U.S. economy closer to the 6.4 percent contraction in 1931, which was followed by 13 percent in 1932, during the Great Depression.
Other executives who met Obama included the head of Corning Inc, which this week announced 4,900 job cuts, and Xerox Corp., which cut 3,000 late last year.
The House debated legislation written by Obama's fellow Democrats that would spend $825 billion over the next few years with a combination of emergency spending and tax cuts to create and save up to 4 million jobs.
"This $825 billion package is not too large ... in fact it's probably smaller than it ought to be," House Appropriations Committee Chairman David Obey said, noting the horrible shape of the U.S. economy.
REPUBLICANS OPPOSED
Most House Republicans planned to oppose the legislation. and thus cast votes later on Wednesday against some of the Democrats' pet projects such as new money for education, alternative energy and more emergency aid for the poor.
They offered a competing plan, which was expected to fail, that would scrap the Democrats' hundreds of billions of dollars in spending to jump-start the economy and instead call for a series of tax cuts estimated to cost $478 billion.
House Republican leader John Boehner said that approach would create 6.2 million jobs. "That's twice as many as the (Democratic) bill that is on the (House) floor now for about half the price," Boehner told reporters.
But by excluding most spending, Democrats said the Republican plan would kill investments in construction and deny the poor expanded aid, such as more food stamps and money to cover home heating costs, they need to survive bad times.
Democratic Representative Sander Levin from hard-hit Michigan, called the Republican amendment "the same old (tax-cutting) tune."
Once the House votes, action moves to the Senate, which is considering a more expensive bill. Its price tag is now about $887 billion because it will include a one-year fix to insulate middle-class taxpayers from the Alternative Minimum Tax, which originally was aimed at the wealthy but is affecting a growing number of middle-class taxpayers because of inflation.
Democrats want to send Obama a bill he can sign into law by mid-February. The bill could change by then, especially if Obama strives to get Republican support.
U.S. stocks rose on Wednesday on optimism that the new administration was moving quickly to stabilize banking and hopes for a stimulus package soon.
While Obama wants a strong bipartisan vote on the final version of the bill, that will depend on whether Republicans think they have gotten at least some of what they want, such as more business tax breaks in the bill.
(Additional reporting by Thomas Ferraro, Jeremy Pelofsky and Susan Cornwell; editing by David Wiessler)
