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Obama Wins Initial Victory in Congress Amid Grim Economic News


President Barack Obama's economic recovery plan took an important step forward in Congress after it passed the House of Representatives on a party-line vote. But the slow political progress comes in the midst of a constant drumbeat of bad economic news and job cuts that shows no signs of letting up anytime soon.

Even as President Obama's stimulus plan begins to move through Congress, job cuts are beginning to cascade through an economy that remains deep in recession.

2009 looms as a difficult year for many U.S. companies, including the coffee chain Starbucks.

A company spokesman says Starbucks is closing 300 shops around the country.

"There could be as many as 6,000 additional retail positions eliminated over the course of the fiscal year," he said.

It is a trend that experts predict will continue for some time.

David Weiss is the chief economist at the credit ratings agency Standard and Poor's.

"Well, unemployment is a lagging indicator," he said. "We have already gone from 4.4 percent up to 7.2 percent. By the time this is over, we are expecting to hit nine percent, probably about this time next year."

President Obama has seized on the growing concern about job cuts to push Congress for quick action on his economic recovery plan.

"And all those who live in fear that their job will be next on the cutting blocks, they need help now," he said. "They are looking to Washington for action."

Some historians see parallels between Mr. Obama's approach and that of President Franklin Roosevelt, who came to power in the midst of the Great Depression in 1933.

"This great nation will endure, as it has endured, will revive and will prosper," Franklin Roosevelt said.

President Roosevelt launched numerous government programs aimed at stimulating the economy in the first months of his administration, even though it was years before the economy turned around.

"As Franklin Roosevelt said, we need big, bold, persistent experimentation," said Allan Lichtman, an expert on the presidency at American University in Washington. "We have to figure out what works and what does not work, and think big."

But most Republicans are so far unimpressed. They insist the White House plan is too heavily weighted toward government spending, and not enough in favor of tax cuts.

Despite Mr. Obama's personal lobbying efforts, not one House Republican voted for the president's plan.

"Tax cuts actually provide more immediate relief and more jobs than spending, so you get a bigger bang [impact] for the buck [money]," said Eric Cantor, a Virginia Republican Congressman.

Mr. Obama hopes to pick up some Republican support as the debate moves to the Senate.

Democratic congressional leaders plan to have a final bill ready for the president's signature in mid-February.

Brandeis University expert Peneil Joseph says the new president has little time to waste in getting his economic program through the Congress.

"A lot of his presidency is going to hinge on the economic health and well-being of not just Wall Street, but as he often says, Main Street, just average, ordinary Americans and how they are doing," he said. "Can they afford a house or health care? Send their kids to college?"

Mr. Obama says passage of his plan will save or create three to four million jobs during the next few years.

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