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WASHINGTON – Senate Republicans circulated a sweeping plan to drive down the cost of mortgages by expanding the federal government's role in the industry, officials said Monday night as debate opened on an economic stimulus bill at the top of President Barack Obama's agenda.

President Barack Obama speaks with reporters in the Oval Office of the White House in Washington, Monday,

The emerging proposal also relies on a bigger and more widely available tax break for homebuyers than is now available, those officials added as Senate Republicans staked their claim to a different type of economic recovery measure than Democrats and the administration favor.

Democrats already are under pressure from moderates in their own party to scale back spending in the $885 billion bill, and Obama met with party leaders at the White House late in the day to discuss strategy.

"What we can't do is let very modest differences get in the way" of swift enactment of the legislation, Obama said several hours earlier as new layoffs rippled through the economy and the Commerce Department reported an unexpectedly large sixth straight drop in personal spending.

In the Capitol, Republicans said their goal was to change the bill, not to block it. "Nobody that I know of is trying to keep a package from passing," said Sen. Mitch McConnell of Kentucky, the Republican leader.

"We need to fix housing first," he said. Republicans are expected to seek a vote on their proposals this week as part of the debate on the overall stimulus measure.

Officials said the GOP was coalescing behind a proposal designed to give banks an incentive to make loans at rates currently estimated at 4 percent to 4.5 percent. Fannie Mae and Freddie Mac, which were seized by the federal government in September, would be required to purchase the mortgages once banks have made them to consumers.

Officials said loans to credit-worthy borrowers on primary residences with a mortgage of up to $625,000 would qualify, including those seeking to refinance their current loans.

Separately, Republican officials said they intended to press for a $15,000 tax credit for homebuyers through the end of the year. Current law permits a $7,500 tax break and limits it to first-time homebuyers.

Republicans generally dislike government intervention in the workings of the private marketplace, but their opposition has eroded in recent months as the crisis in the financial industry and economy have deepened.

The officials who described the emerging proposal did so on condition of anonymity, saying they were not authorized to discuss it.

McConnell also said Republicans favor cutting the two lowest tax brackets as a way to " put money back in people's hands directly." If adopted, that would reduce the tax rate from 10 percent to 5 percent for the first $8,350 in individual income for the current year, and $16,700 for couples. The tax rate would be lowered from 15 percent to 10 percent on income between $8,351 and $33,950 for individuals and between $16,701 and $67,900 for couples.

Obama and the Democrats favor a different approach. The legislation provides a cut of $500 for workers and $1,000 for working couples, even if they do not earn enough in wages to pay income taxes.

Separately, Democrats privately conceded they may wind up reducing spending that has come under withering fire in recent days from Republicans.

Last week, House Democrats jettisoned money to reseed the National Mall and a provision to make it easier for states to offer family planning services to the poor under the Medicaid program.

Democrats hold a commanding 58-41 majority in the Senate, but some of their more moderate and conservative members are pushing to trim spending. There was additional pressure on the leadership in the form of bipartisan amendments to reduce spending.

As a result, the outcome of the debate on the measure is far less clear than it was in the House, where leaders had the votes to enforce their will.

The political environment also has changed since House Republicans voted unanimously against the bill last week. Public opinion polls show strong support for a package of tax cuts and spending increases to remedy the worst economic downturn since the Great Depression. But Obama is now on the spot, having pledged personally to GOP lawmakers that he would make changes in the bill once it reached the Senate.

The $885 billion Senate bill is larger than the House-passed version, principally because it includes a one-year tax cut to prevent upper-middle income taxpayers from falling victim to the Alternative Minimum Tax. The so-called AMT initially was created a generation ago to make sure the super-wealthy did not avoid taxation, but inflation has expanded its reach over the years.

In all, the Senate measure provides for roughly $560 billion in spending and $325 billion in tax cuts.

Much of the spending is in the form of health care for the poor; education funds for the states to avoid the impact of their own budget cuts on schools, and more money for food stamps, unemployment insurance and worker retraining funds.

Additionally, the bill includes a down payment on two of Obama's domestic initiatives. They include expanding health information technology and providing spending and tax cuts to encourage development of new jobs while increasing reliance of alternative energy sources.

Whatever the breakdown, Republicans said there was far too much spending, and not enough in tax cuts.

Obama made his comments at the White House, where he met with Vermont Gov. Jim Douglas, the Republican vice chairman of the National Governors Association.

"If I were writing it, it might look at little different," said Douglas, trying to keep faith with Republican critics in Congress while saying his state needed help. "But the essence of a recovery package is essential to get the nation's economy moving."

The White House issued a statement late Monday saying the president and Democratic congressional leaders had a productive meeting and that they agreed on the urgent need to pass legislation. They also pledged to continue working together to achieve a bipartisan consensus.

The latest layoffs were announced by Macy's, the Cincinnati-based department store chain, which said it was cutting 7,000 jobs.

WASHINGTON – In a swift victory for President Barack Obama, the Democratic-controlled House approved a historically huge $819 billion stimulus bill Wednesday night with spending increases and tax cuts at the heart of the young administration's plan to revive a badly ailing economy. The vote was 244-188, with Republicans unanimous in opposition despite Obama's frequent pleas for bipartisan support.

"This recovery plan will save or create more than three million new jobs over the next few years," the president said in a written statement released moments after the House voted. Still later, he welcomed congressional leaders of both parties to the White House for drinks as he continued to lobby for the legislation.

Earlier, Obama declared, "We don't have a moment to spare" as congressional allies hastened to do his bidding in the face of the worst economic crisis since the Great Depression.

The vote sent the bill to the Senate, where debate could begin as early as Monday on a companion measure already taking shape. Democratic leaders have pledged to have legislation ready for Obama's signature by mid-February.

A mere eight days after Inauguration Day, Speaker Nancy Pelosi said the events heralded a new era. "The ship of state is difficult to turn," said the California Democrat. "But that is what we must do. That is what President Obama called us to do in his inaugural address."

With unemployment at its highest level in a quarter-century, the banking industry wobbling despite the infusion of staggering sums of bailout money and states struggling with budget crises, Democrats said the legislation was desperately needed.

"Another week that we delay is another 100,000 or more people unemployed. I don't think we want that on our consciences," said Rep. David Obey, D-Wis., chairman of the House Appropriations Committee and one of the leading architects of the legislation.

Republicans said the bill was short on tax cuts and contained too much spending, much of it wasteful, and would fall far short of administration's predictions of job creation.

The party's leader, Rep. John Boehner of Ohio, said the measure "won't create many jobs, but it will create plenty of programs and projects through slow-moving government spending." A GOP alternative, comprised almost entirely of tax cuts, was defeated, 266-170.

On the final vote, the legislation drew the support of all but 11 Democrats, while all Republicans opposed it.

The White House-backed legislation includes an estimated $544 billion in federal spending and $275 billion in tax cuts for individuals and businesses. The totals remained in flux nearly until the final vote, due to official re-estimates and a last-minute addition of $3 billion for mass transit.

Included is money for traditional job-creating programs such as highway construction and mass transit projects. But the measure tickets far more for unemployment benefits, health care and food stamp increases designed to aid victims of the worst economic downturn since the Great Depression of the 1930s.

Tens of billions of additional dollars would go to the states, which confront the prospect of deep budget cuts of their own. That money marks an attempt to ease the recession's impact on schools and law enforcement. With funding for housing weatherization and other provisions, the bill also makes a down payment on Obama's campaign promise of creating jobs that can reduce the nation's dependence on foreign oil.

The centerpiece tax cut calls for a $500 break for single workers and $1,000 for couples, including those who don't earn enough to owe federal income taxes.

The House vote marked merely the first of several major milestones a for the legislation, which Democratic leaders have pledged to deliver to the White House for Obama's signature by mid-February.

Already a more bipartisan — and costlier — measure is taking shape in the Senate, and Obama personally pledged to House and Senate Republicans in closed-door meetings on Tuesday that he is ready to accept modifications as the legislation advances.

Rahm Emanuel, a former Illinois congressman who is Obama's chief of staff, invited nearly a dozen House Republicans to the White House late Tuesday for what one participant said was a soft sales job.

This lawmaker quoted Emanuel as telling the group that polling shows roughly 80 percent support for the legislation, and that Republicans oppose it at their political peril. The lawmaker spoke on condition of anonymity, saying there was no agreement to speak publicly about the session.

In fact, though, many Republicans in the House are virtually immune from Democratic challenges because of the makeup of their districts, and have more to fear from GOP primary challenges in 2010. As a result, they have relatively little political incentive to break with conservative orthodoxy and support hundreds of billions in new federal spending.

Also, some Republican lawmakers have said in recent days they know they will have a second chance to support a bill when the final House-Senate compromise emerges in a few weeks.

Rep. Randy Neugebauer, R-Texas, sought to strip out all the spending from the legislation before final passage, arguing that the entire cost of the bill would merely add to soaring federal deficits. "Where are we going to get the money," he asked, but his attempt failed overwhelmingly, 302-134.

Obey had a ready retort. "They don't look like Herbert Hoover, I guess, but there are an awful lot of people in this chamber who think like Herbert Hoover," he said, referring to the president whose term is forever linked in history with the Great Depression.