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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.

President Barack Obama is pictured alongside House Speaker Nancy Pelosi and House Minority Leader John

"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.

WASHINGTON – President Barack Obama on Friday struck down the Bush administration's ban on giving federal money to international groups that perform abortions or provide abortion information — an inflammatory policy that has bounced in and out of law for the past quarter-century.

President Barack Obama speaks to reporters during a meeting about the economy with Congressional leaders

Obama's move, the latest in an aggressive first week reversing contentious Bush policies, was warmly welcomed by liberal groups and denounced by abortion rights foes.

The ban has been a political football between Democratic and Republican administrations since GOP President Ronald Reagan first adopted it 1984. Democrat Bill Clinton ended the ban in 1993, but Republican George W. Bush re-instituted it in 2001 as one of his first acts in office.

"For too long, international family planning assistance has been used as a political wedge issue, the subject of a back and forth debate that has served only to divide us," Obama said in a statement released by the White House. "I have no desire to continue this stale and fruitless debate."

He said the ban was unnecessarily broad and undermined family planning in developing countries.

"In the coming weeks, my administration will initiate a fresh conversation on family planning, working to find areas of common ground to best meet the needs of women and families at home and around the world," the president said.

Obama issued the presidential memorandum rescinding the Bush policy without coverage by the media, late Friday afternoon. The abortion measure is a highly emotional one for many people, and the quiet signing was in contrast to the televised coverage of Obama's announcement Wednesday on ethics rules and Thursday's signing of orders on closing the Guantanamo Bay prison camp and banning torture in the questioning of terror suspects.

His action came one day after the 36th anniversary of the landmark Supreme Court ruling in Roe v. Wade that legalized abortion.

The Bush policy had banned U.S. taxpayer money, usually in the form of Agency for International Development funds, from going to international family planning groups that either offer abortions or provide information, counseling or referrals about abortion as a family planning method.

Critics have long held that the rule unfairly discriminates against the world's poor by denying U.S. aid to groups that may be involved in abortion but also work on other aspects of reproductive health care and HIV/AIDS, leading to the closure of free and low-cost rural clinics.

Supporters of the ban say that the United States still provides millions of dollars in family planning assistance around the world and that the rule prevents anti-abortion taxpayers from backing something they believe is morally wrong.

The ban has been known as the "Mexico City policy" for the city a U.S. delegation first announced it at a U.N. International Conference on Population.

Both Obama and Secretary of State Hillary Rodham Clinton, who will oversee foreign aid, had promised to do away with the rule during the presidential campaign.

Clinton said Friday evening that for seven years Bush's policy made it more difficult for women around the world to gain access to essential information and health care services. "Rather than limiting women's ability to receive reproductive health services, we should be supporting programs that help women and their partners make decisions to ensure their health and the health of their families," Clinton said.

In a related move, Obama also said he would restore funding to the U.N. Population Fund (UNFPA). Both he and Clinton had pledged to reverse a Bush administration determination that assistance to the organization violated U.S. law known as the Kemp-Kasten amendment.

Obama, in his statement, said he looked forward to working with Congress to fulfill that promise: "By resuming funding to UNFPA, the U.S. will be joining 180 other donor nations working collaboratively to reduce poverty, improve the health of women and children, prevent HIV/AIDS and provide family planning assistance to women in 154 countries."

Thoraya Ahmed Obaid, executive director of the U.N. Population Fund, said: "The president's actions send a strong message about his leadership and his desire to support causes that will promote peace and dignity, equality for women and girls and economic development in the poorest regions of the world."

"We are confident that under the new president's direction, the U.S. will resume its leadership in promoting and protecting women's reproductive health and rights worldwide," Obaid said in a statement issued at U.N. headquarters in New York.

The Bush administration had barred U.S. money from the fund, contending that its work in China supported a Chinese family planning policy of coercive abortion and involuntary sterilization. UNFPA has vehemently denied that it does.

Congress had appropriated $40 million to the UNFPA in the past budget year, but the administration had withheld the money as it had done every year since 2002.

Organizations and lawmakers that had pressed Obama to rescind the Mexico City policy were jubilant.

House Speaker Nancy Pelosi, D-Calif., said the move "will help save lives and empower the poorest women and families to improve their quality of life and their future."

"Today's announcement is a very powerful signal to our neighbors around the world that the United States is once again back in the business of good public policy and ideology no longer blunts our ability to save lives around the globe," said Sen. John Kerry, D-Mass., chairman of the Senate Foreign Relations Committee.

Population Action International, an advocacy group, said that the policy had "severely impacted" women's health and that the step "will help reduce the number of unintended pregnancies, abortions and women dying from high-risk pregnancies because they don't have access to family planning."

Anti-abortion groups and lawmakers condemned Obama's decision.

"I have long supported the Mexico City Policy and believe this administration's decision to be counter to our nation's interests," said Senate Republican leader Mitch McConnell of Kentucky.

"Coming just one day after the 36th anniversary of the tragic Roe v. Wade decision, this presidential directive forces taxpayers to subsidize abortions overseas — something no American should be required by government to do," said House Minority Leader John Boehner, R-Ohio.

Rep. Mike Pence, R-Ind., called it "morally wrong to take the taxpayer dollars of millions of pro-life Americans to promote abortion around the world."

"President Obama not long ago told the American people that he would support policies to reduce abortions, but today he is effectively guaranteeing more abortions by funding groups that promote abortion as a method of population control," said Douglas Johnson, legislative director of the National Right to Life Committee.

WASHINGTON – Amid grim new evidence of economic weakness, legislation at the heart of President Barack Obama's recovery plan advanced in Congress Thursday over the persistent opposition of Republicans seeking deeper tax cuts.

President Barack Obama, tours the Brady press briefing room at the White House, Thursday, Jan. 22, 2009

"We are very pleased with the progress," said Speaker Nancy Pelosi, D-Calif., after $275 billion in tax cuts cleared the House Ways and Means Committee on a party-line vote of 24-13. Democratic leaders have promised the measure will be ready for Obama's signature by mid-February.

"It will create jobs immediately, and it will also lay the foundation for economic stability as we go forward," Pelosi added.

But Republicans said there was no reliable estimate of the bill's impact on employment.

"The American people deserve to know what they are getting for their nearly $1 trillion," said Rep. Dave Camp of Michigan, the top Republican on the tax-writing committee.

In all, the measure costs $825 billion, a total expected to grow as it makes its way through Congress.

On the key vote of the day, Democrats closed ranks to preserve a tax break for this year and 2010 that would mean $500 for many workers and $1,000 for millions of couples, including those whose earnings are so low that they pay no federal income tax.

Democrats also turned back a Republican attempt to jettison a new federal subsidy to help laid-off workers pay for health insurance after they lose employer-paid coverage, and to waive income taxes on unemployment benefits for two years.

They argued that the GOP proposals would favor upper-income individuals and couples who, they said, benefited disproportionately from tax cuts passed during the administration of former President George W. Bush.

"We need to be dealing with people at the bottom of the income scale," said Rep. Jim McDermott, D-Wash. He also noted that the legislation would provide a $25-per-week increase in unemployment benefits.

But Camp cited a report by the nonpartisan Congressional Research Service that he said showed lower- and middle-income workers already would have received most of the benefits from the proposal to eliminate the tax on unemployment benefits.

Separately, the House Energy and Commerce Committee approved a $2.8 billion program that would expand broadband service into underserved areas. It also approved various programs costing an estimated $27 billion to promote energy efficiency.

The panel, working late into the night, also passed a $20 billion effort to speed the creation of electronic health records, and it approved more money to help states afford increased enrollment under Medicaid, the health care program for the low income. In all, the additional spending for health care programs totals about $150 billion over five years.

During a recession, enrollment traditionally rises in programs such as Medicaid, food stamps and unemployment insurance as workers lose their jobs and their incomes.

Congressional committees did their work as government reports showed the number of newly laid-off Americans filing jobless claims and the pace of home construction both posted worse-than-expected results. Additionally, Microsoft Corp. said it would slash up to 5,000 jobs over the next 18 months, while chemical maker Huntsman Corp. said it would cut more than 1,600 employees and contractors combined.

Democrats have an oversized majority on the tax-writing committee, as they do on all committees, the result of election gains in the fall. While Republicans sought several changes in the legislation, the proceedings were devoid of drama or even emotion.

Republicans in both the House and Senate are developing alternatives to the Democratic legislation, and Rep. John Boehner of Ohio, the GOP House leader, announced a meeting next week with Obama.

"Our plan offers fast-acting tax relief, not slow-moving and wasteful government spending," he said, referring to a study by the Congressional Budget Office questioning administration claims the money could be spent fast enough to reduce joblessness quickly.

The administration countered with a promise that 75 percent of the entire measure would reach the economy over the next year and a half, according to a letter sent by White House Budget Director Peter Orszag to top lawmakers.

Not all Democrats were completely pleased with the legislation making its way to a vote on the House floor next week.

The portion of the measure ticketed for highway and bridge construction, $30 billion, is far less than some favor, and there was grumbling.

"This bill ... is not even near what we need for short-term needs and it does not in any meaningful way address the long-term needs for our country," said Rep. Peter DeFazio, D-Ore., although he added, "It is better than nothing."

There was outright opposition in the House to another element of Obama's economic recovery program, but it was entirely symbolic.

On a vote of 270-155, lawmakers voted to block use of the remaining $350 billion in the financial industry bailout created last fall. Among the opponents were 99 Democrats.

The Senate cleared the way for Obama to use the money last week, so the House vote was little more than a chance for individual lawmakers to vent their opposition. Some Democrats took advantage of the opportunity. "There's a massive transfer of wealth going on, taking money out of the pockets of the American people and putting it into these banks. This has to stop. We have to stop," said Rep. Dennis Kucinich, D-Ohio.

The tax cuts that won committee approval included a $500 credit for workers making up to $75,000 per year. Couples with incomes up to $150,000 a year would receive a $1,000 credit. Individuals with incomes up to $100,000 and couples earning up to $200,000 would qualify for lesser tax breaks.

The Republican alternative envisioned a different approach.

It called for reducing the current 10 percent bracket to 5 percent, affecting a taxpayer's first $8,350 in income, and lowering the existing 15 percent bracket to 10 percent, covering income from $8,351 to $33,950.

The legislation that cleared committee also would provide a temporary $2,500 tax credit to help pay for college, and includes breaks to encourage the production of renewable energy resources.

For businesses, the measure includes $29 billion in tax cuts to encourage investment in new plants and equipment, and to permit money-losing firms to claim refunds on taxes paid up to five years ago, during profitable times.

WASHINGTON – Two days from the White House, President-elect Barack Obama joined a vast throng Sunday at a joyous pre-inauguration celebration staged among marble monuments to past heroes. "Anything is possible in America," declared the man who will confront economic crisis and two wars when he takes office.

President-elect Barack Obama, his wife Michelle Obama, arrive at 'We Are One: Opening Inaugural Celebration

"Despite the enormity of the task that lies ahead, I stand here today as hopeful as ever that the United States of America will endure — that it will prevail, that the dream of our founders will live on in our time," the president-elect said at the conclusion of a musical extravaganza that featured U2, Beyonce, Bruce Springsteen and a host of other stars.

Obama and his family held the seats of honor at the event, and a crowd of tens of thousands spilled from the base of the Lincoln Memorial toward the Washington Monument several blocks away in the cold, gray afternoon of mid-January.

It was the high point of a full day of pre-inaugural events that included a wreath-laying at the Tomb of the Unknowns at Arlington National Cemetery and a morning church service where children recalled the life of civil rights leader Martin Luther King Jr.

Obama's motorcade drew ever-larger crowds as the day wore on and he and his wife, Michelle, and their children Sasha and Malia crisscrossed the city.

"Just another typical Sunday," deadpanned the Rev. Derrick Harkins, pastor at the Nineteenth Street Baptist Church, where the soon-to-be first family prayed.

Of course it was anything but — a run-up, in fact, to the first inauguration of an African-American president in a nation founded by slave-owners.

Obama's aides said he was readying an inaugural address that would stress twin themes of responsibility and accountability, and they predicted he would devote his first week in office to economic recovery, setting in motion a 16-month troop withdrawal from Iraq and decreeing a code of ethics for his administration.

With the economy weak and growing weaker, banks in trouble and joblessness rising, Obama's team was careful to warn against any expectation that he would be a miracle worker once in office. "I think it's fair to say that it's going to take not months but years to really turn this around," said David Axelrod, a political strategist expected to have White House space mere paces from the Oval Office.

Obama said as much in his own brief remarks. "I won't pretend that meeting any one of these challenges will be easy. It will take more than a month or a year, and it will likely take many," he said.

He stood alone at the base of the steps before the statue of a seated Lincoln looking out at a crowd every bit as large as the one King addressed a generation earlier in his "I have a dream" speech that was a defining moment of the civil rights era.

An even larger audience is forecast for the inauguration outside the Capitol on Tuesday, with estimates running into the millions. Agencies in charge of logistics and security said they would enforce a ban on personal auto traffic across the Potomac River bridges from Virginia into Washington and seal off a large portion of the downtown area. Access to buildings along the Inaugural parade route down Pennsylvania Avenue was limited to those who gained Secret Service approval in advance.

Obama's day began at the Tomb of he Unknowns at Arlington National cemetery, where he and Vice President-elect Joseph Biden laid a wreath in memory of fallen heroes. The two men placed their hands over their hearts as a uniformed bugler played taps in a somber opening to a festive day.

The scene was quite different at the church a few miles away, where the congregation erupted in applause when Obama and his family walked to their seats.

"Understand that God has prepared you, and God has placed you, and God will not forsake you," Harkins told the incoming president.

Children sang and spoke selected readings that recalled King, killed in 1968.

"Martin Luther King walked so that Barack Obama could run," said one boy. "Barack Obama ran so that all children could fly," added another, standing a few feet away from the first African-American ever elected president.

At the Lincoln Memorial a few hours later, King's son, Martin Luther King III, had a brief speaking role.

For the most part, the program was a festival of music, the songs chosen to make their points. Mary J. Blige sang, "Lean on Me," Springsteen performed "The Rising," and Obama mouthed the words as 89-year-old Pete Seeger pitched in with "This Land is Your Land."

Many in the crowd sang along with Beyonce's soulful finale, "America the Beautiful."

In film clips at earlier moments, Obama was cast as heir to Franklin Delano Roosevelt, John F. Kennedy and even Lincoln, who the president-elect said was "the man who in so many ways made this day possible."

As Obama moved around town in a pre-inaugural motorcade, his aides blanketed Sunday's interview programs.

With the nation facing the most difficult economic crisis since the Great Depression, they all agreed that recovery was the principal challenge facing the new president.

"What's important ... is ensuring that those that have had the short end of the stick for the last few years — make sure that they get the help that they need, that this administration begins to create the jobs and give some financial stability to families so that they can feel hopeful about going forward," said Robert Gibbs, who will serve as Obama's White House press secretary.

"Three million, 4 million jobs is going to make a very big difference," said Lawrence Summers, a top economic adviser to the incoming president, referring to the goal Obama has set. "It all depends on psychology, but we are going to be leaning forward throughout this administration. The president's made it clear that our errors are not going to be of standing back."

The Democratic-controlled Congress has already made a quick start on the president's recovery program, clearing the way for use of the second $350 billion for the financial industry bailout created last fall, and launching an $825 billion stimulus measure. Democratic leaders have pledged to have the legislation ready for Obama's signature by mid-February.

House Speaker Nancy Pelosi, D-Calif., also endorsed Obama's call for a summit meeting to begin controlling spending on huge government benefit programs such as Social Security, Medicare and Medicaid. She said even benefit cuts should be included as an option for discussion. "You put everything on the table. The only thing we didn't want to put on the table is eliminating" the programs, she added.

The Senate appears ready to confirm several of Obama's Cabinet appointees as soon as he signs the formal nomination paperwork on Tuesday, although not everything has been smooth for Obama and his transition team.

Treasury Secretary-designate Timothy Geithner's confirmation has been delayed for at least a few days because of his disclosure that he had failed to pay some federal taxes earlier in the decade. Bill Richardson withdrew as Obama's commerce secretary choice because of a grand jury investigation in New Mexico, where he is governor, and Obama himself was tripped up by controversy surrounding the appointment of his successor in the Senate.

Sen. Roland Burris, D-Ill., was sworn in Thursday — and swiftly voted with Obama to release the bailout funds. The president-elect and Senate Democrats had initially balked at allowing him to take the seat, saying his appointment was tainted because Gov. Rod Blagojevich faces criminal charges that he sought something in return for appointing Obama's successor.

Incoming White House chief of staff Rahm Emanuel said in a televised interview that in his conversations with the governor, Blagojevich did not seek anything improper.

WASHINGTON – Pointing with concern to "red ink as far as the eye can see," President-elect Barack Obama pledged Wednesday to tackle out-of-control Social Security and Medicare spending and named a special watchdog to clamp down on other federal programs — even as he campaigned anew to spend the largest pile of taxpayer money in history to revive the sinking economy.

AP – President-elect Barack Obama gestures during a news conference at his transition office in Washington,

The steepness of the fiscal mountain he'll face beginning Jan. 20 was underscored by stunning new figures: an estimate that the federal budget deficit will reach $1.2 trillion this year, by far the biggest ever, even without the new stimulus spending.

The incoming president has walked this same tightrope each day this week — advocating fiscal discipline and taxpayer largesse together at nearly every turn, though in every case with little detail to back it up. With less than two weeks to go before taking the helm at the White House, he'll make the same pitch on Thursday, delivering a speech laying out why he wants Congress to quickly pass his still-evolving economic plan.

Last year's U.S. deficit set its own record, but that $455 billion will be dwarfed by this year's. The new estimate, by the nonpartisan Congressional Budget Office, represents more than 8 percent of the entire national economy.

Still, Obama said "an economic situation that is dire" requires immediate and bold action with unprecedented tax cuts and federal programs. More bad news is expected Thursday and Friday on U.S. layoffs, and stocks plummeted anew on Wednesday, wiping out gains from the first week of the new year.

Obama gave his first ballpark estimate of the total amount of the stimulus package expected to emerge from negotiations between his team and Capitol Hill, saying it is likely to hover around $775 billion over two years. That's about $400 billion less than outside economists have said might be needed to jolt the economy but at the top of the range that Obama aides and congressional leaders have discussed publicly.

"We're going to have to jump-start this economy," Obama said. "That's going to cost some money."

The president-elect said concerns about increasing the deficit to unmanageable levels swayed him against the higher figures advocated by some.

House Speaker Nancy Pelosi also pressed for passage of a recovery bill, though the mid-February timeline she offered represented another slip in the date by which the package would be ready for Obama's signature. Initially, the goal was to have it finished by the time he takes office a week from next Tuesday.

Obama's repeated emphasis amid the stimulus talk on a need for spending control is aimed in part at attracting more support from deficit hawks in Congress.

He said Wednesday, without details, that his initial budget proposal next month will include "some very specific outlines" of how he plans to tackle spending. That extends to the ballooning and so-far unsolvable fiscal problem presented by the Social Security and Medicare programs, which Obama promised would be "a central part" of his deficit-reduction plan.

The stimulus package is expected to easily pass Congress, now controlled by solid Democratic majorities in both houses. But since it is the first major legislative test of an administration that promised to usher in a new era of bipartisan cooperation, and a measure of such enormous scope and import, Obama doesn't want to see it approved on a merely party-line vote.

On Wednesday, he made good on a campaign promise and introduced his choice for a new White House post he is creating: chief performance officer. Nancy Killefer, a professional efficiency expert, is charged with scouring the federal budget to eliminate programs that don't work and improve those that do. Obama called her appointment "among the most important that I will make."

"We committed to changing the way our government in Washington does business so that we're no longer squandering billions of tax dollars on programs that have outlived their usefulness or exist solely because of the power of a lobbyist or an interest group," Obama said.

Killefer, the director of a management consulting firm and a former assistant treasury secretary will be Obama's hatchet woman, with power to recommend directly to him the slashing of programs and projects government-wide. She'll help agencies set performance standards and hold managers accountable.

But she also will run up against a long history of other chief executives' similar promises under different titles that have fallen short.

She said the bureaucracy's entrenched problems have taken decades to develop and will take time to fix. But she said it would be different this time. "I have seen it done," Killefer said at Obama's side.

Obama has to give Congress in early February a budget request — at least the bare bones of one — covering spending for the next fiscal year. Because that's so soon after he takes over the executive branch of government, his submission won't be anything like the usual one that fills several volumes and hundreds of pages.

Pelosi, speaking before the House Democratic Steering and Policy Committee, offered her own assurance that the stimulus plan would be responsible and that Democrats are committed to long-term fiscal discipline.

Economist Martin Feldstein joined others talking to the congressional panel to endorse the need for a big short-term spending package. But he also warned against anything that could create a spending habit and swell the deficit even further. "There should be an exit strategy," he said.

WASHINGTON – The Capitol rang loud with vows to fix the crisis-ridden economy Tuesday as Congress opened for business at the dawn of a new Democratic era. "We need action and we need action now," said Speaker Nancy Pelosi. Republicans agreed, and pledged cooperation in Congress as well as with President-elect Barack Obama — to a point.

AP – Sen. Edward M. Kennedy, D-Mass., center, holds a bible as he stands with House Speaker Nancy Pelosi of

On a day largely devoted to ceremony, new members of Congress and those newly re-elected swore to defend the Constitution. The Senate galleries were crowded; children and grandchildren of lawmakers squirmed in their seats in the House chamber as the winners in last fall's elections claimed their prizes.

One office-seeker was not among them.

In a scripted bit of political theater, Democrat Roland Burris of Illinois was informed he would not be seated because his paperwork was not in order. He pledged a lawsuit, the latest twist in a political drama that began when he was named to Obama's Senate seat by Gov. Rod Blagojevich, who has been charged with having attempted to sell the appointment.

Obama was across town in a meeting with his economic advisers as the opening gavels fell in the House and Senate at noon. His inauguration as the nation's first black president is two weeks away.

Senate Majority Leader Harry Reid, a veteran of numerous battles with President George W. Bush, made plain how glad he was the old administration was winding down.

"We are ready to answer the call of the American people by putting the past eight years behind us and delivering the change that our country desperately needs," he said on the Senate floor. We are grateful to begin anew with a far more robust Democratic majority."

At the same time, in comments directed at Republicans, he said, "we are in this together" when it comes to the economy, the wars in Iraq and Afghanistan, health care and the country's energy needs.

Sen. Mitch McConnell of Kentucky, the Republican leader, replied in a speech of his own, saying, "The opportunities for cooperation are numerous." He said Democrats should avoid a "reckless rush to meet an arbitrary deadline" to pass an economic stimulus bill that could reach $1 trillion, and he outlined possible changes in the approach Obama and the Democratic congressional leaders have been considering.

Among them was a proposal to cut taxes by 10 percent. Another was to lend money to hard-pressed state governments rather than give it to them. "States will be far less likely to spend it frivolously" in that case, he said.

By the new political calculus, McConnell will soon be the most powerful Republican in government after elections that handed Democrats the White House and left them with gains of least seven seats in the Senate and 21 in the House.

McConnell's counterpart in the House, Republican leader John Boehner of Ohio, handed the speaker's gavel to Pelosi in a traditional unity tableau. He, too, pledged cooperation, then said, "America's potential is unlimited. But government's potential is not. We must not confuse the two."

Obama spent much of Monday in the Capitol, conferring with Republicans and Democrats alike on the economic stimulus measure he hopes to sign early in his term. The nation's consumer spending has plummeted, manufacturing has withered and job losses have grown in recent months, adding urgency to the legislative effort in contrast to the customary sluggish start to a new Congress.

Strikingly, the war in Iraq drew scant mention during the day, a contrast to the weeks of debates that Democrats once had forced to try and maneuver Bush into withdrawing American forces.

Reid mentioned the fighting in passing when he noted the country was fighting two wars overseas, a reference to Iraq and Afghanistan.

Pelosi was even more indirect, saying, "We cannot afford to wait to modernize and rebuild our military."

Like Reid, she focused her remarks on domestic issues, the economy chief among them.

"We need action and we need action now," she said again and again, calling for help for "hardworking and still hopeful Americans" bearing the brunt of the economic crisis, for the states struggling to provide services, for families without health care, for a climate crisis and for energy needs.

Speechmaking and celebrations aside, House Democrats pushed through a series of rule changes, including one that calls for greater disclosure of earmarks.

They also repealed the six-year term limit for committee chairman. It was a legacy of the Republican Revolution that swept through Congress in 1994, and in erasing it Democrats evinced confidence in the strength of their majority status.

In all, 34 senators were sworn it, and apart from the controversy involving Burris, one other Senate seat was in limbo.

Democrat Al Franken holds a 225-vote lead over former Sen. Norm Coleman in Minnesota, a result certified on Monday by the state Canvassing Board. He has not yet received a certificate of election, and with Republicans threatening to protest, Democrats made no attempt to seat him.

Inevitably, it was a day for personal transitions.

Sen. Joseph Biden of Delaware took the oath of office for a seventh time for a seat he has held for more than 30 years and will soon relinquish to become Obama's vice president.

Anh "Joseph" Cao, who arrived in the United States as an 8-year-old war refugee, was sworn in as the nation's first Vietnamese-American lawmaker. He's a Louisiana Republican.

WASHINGTON – President-elect Barack Obama plunged into rare pre-inaugural crisis talks with congressional leaders Monday, declaring the national economy was "bad and getting worse" and embracing tax cuts now expected to reach $300 billion. He predicted lawmakers would approve a mammoth revitalization package within two weeks of his taking office.

AP – President-elect Barack Obama, flanked by Treasury Secretary-designate Timothy Geithner, left, and Council

If the two-year plan is enacted, workers would see larger paychecks almost immediately because taxes withheld by the government would drop. The break would be retroactive to Jan. 1, and couples receiving a $1,000 tax cut would begin receiving an extra $40 in twice-monthly paychecks as the government tries to spark more consumer spending.

"The economy is very sick," said Obama, who met privately with leaders of both parties at the Capitol. "The situation is getting worse. ... We have to act and act now to break the momentum of this recession."

Obama, who takes office two weeks from Tuesday, has said there can be only one president at a time — and he repeated that principle Monday "when it comes to foreign affairs." But when it comes to the floundering economy, he clearly feels he cannot sit by until the swearing-in.

"The reason we are here today is because the people's business cannot wait," Obama said as he arrived on Capitol Hill.

"I expect to be able to sign a bill shortly after taking office," he said. Pressed on the timing, he said, "By the end of January or the first of February."

Obama's proposal to stimulate the economy includes tax cuts of up to $300 billion — including $500 for most individuals and $1,000 for couples if one spouse is employed — as well as more than $100 billion for businesses, an Obama transition official said. The total value of the tax cuts would be significantly higher than had been signaled earlier.

New federal spending, also aimed at boosting the moribund economy, could push the overall package to the range of $800 billion or so. Some $77 billion would be used to extend unemployment benefits and to subsidize health care for people who have lost their jobs.

The rest would go toward job-creation projects such as roads and bridges and toward long-term goals such as alternative energy programs.

Meeting with Democratic House Speaker Nancy Pelosi, Obama set a tone of urgency for dealing with a financial situation that he described as "precarious."

He said, "The speaker and her staff have been extraordinarily helpful in working with our team so we can shape an economic recovery plan and start putting people back to work."

But he also met with Republicans in an effort to build broad support for quick action.

"This is not a Republican problem or a Democratic problem at this stage," he said. "It is an American problem and we're going to all have to chip in and do what the American people expect."

At his meeting with bipartisan leaders of Congress, Obama said he would make his stimulus proposal available on the Internet, with a Google-like search function to show each proposed project or program, by congressional district, according to three people who attended.

After meeting with Obama, House Minority Leader John Boehner, R-Ohio, said he was concerned about the plan's cost.

"This is not a package that's ever going to be paid for by the current generation," Boehner said. "It's being paid for by our kids and grandkids."

Republican lawmakers want more details, Boehner said, but he replied "yes" when asked if he expected a stimulus plan to be enacted within six weeks.

Said Pelosi: "It is a great honor and personal privilege to welcome you to this office. Tomorrow we will swear in a new Congress and we will hit the ground running on the initiatives ... to ease the pain being felt by the American people."

The Obama plan's tax cuts for individuals and couples would be a bit different from the rebate checks sent out last year by the Bush administration and Congress in a bid to boost the slowing economy. The relief this time around would be awarded by withholding less from worker paychecks. That provision would cost about $140-150 billion over two years.

For businesses, the plan would allow firms incurring losses last year to take a credit against profits dating back five years instead of the two years currently allowed.

Another provision brought to the negotiations by the Obama team would award a one-year tax credit costing $40-50 billion to companies that hire new workers, and would provide other incentives for business investment in new equipment.

"We've got an extraordinary economic challenge ahead of us," Obama said, and he predicted a jobs report at the end of the week would show new declines.

He had meetings with a broad array of House and Senate Democratic leaders and with a bipartisan group of key lawmakers. He had hoped to have Congress enact the recovery plan in time for him to sign when he takes office Jan. 20, but no one thinks that will happen now.

Obama has insisted that bold and quick action is necessary if the nation is to rebound from the greatest economic crisis since the Great Depression. He has said repeatedly he wants a plan that will create 3 million new jobs.

The economic teams of new presidents often work behind the scenes with congressional leaders before their administrations move in, but Obama's direct and public involvement is highly unusual.

He arrived Sunday night in Washington and spent all of Monday at the Capitol before returning to the hotel where he has set up shop for the two weeks before his inauguration.

Later Obama attended a party at Bobby Van's restaurant, thrown by Illinois Sen. Dick Durbin, the body's second ranking Democrat, for new members of the House and Senate and the Chicago press corps. About 300 guests packed the restaurant's 13-story atrium, jockeying for pictures with the president-elect and holding their cell phones aloft as he tried to walk into the room. He made about 25 feet in 30 minutes, then returned to the hotel.

Aides have said the package Obama has dubbed the American Recovery and Reinvestment Plan could cost as much as $775 billion. The president-elect has refused to put a price tag on the plan, and some members of Congress expect it to go higher.