Obama’s $825bn spending plan hits first hurdle

Barack Obama's $825 billion economic stimulus package ran into opposition today as leading Republicans threatened to vote against it.

Senator John McCain called for tax cuts rather than increased spending, while his colleague John Boehner said the package needed substantial changes. The Republicans do not have enough votes to defeat it but they could delay it in the Senate.

Their criticism of the ambitious plans to rescue the US economy threatens to become a significant early test for the President.

Speaker Nancy Pelosi has promised to bring the stimulus package to a vote in the House of Representatives this week. At the same time, the Senate will begin drawing up another version that could grant concessions to the Republicans. Mr McCain said the package did not do enough to create jobs. "There have to be major rewrites if we want to stimulate the economy," he said. "As it stands now, I can't vote for it."

Mr Boehner said: "I just think there's a lot of slow-moving government spending in this programme that won't work. We can't borrow and spend our way back to prosperity." The President is to hold private meetings with the Republican leadership tomorrow in an effort to secure agreement. His proposed plan will send the American budget deficit above $2 trillion amid the worst economic crisis in decades.

In the first of his weekly radio addresses, Mr Obama said his administration would stand or fall on the success or failure of his economic stimulus plan. He said all decisions about where to invest the $825 billion would be made public and published on a new website. He said: "Just this week, we saw more people file for unemployment than at any time in the last 26 years, and experts agree that if nothing is done, the unemployment rate could reach double digits.

"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future."

His struggle to get his rescue package approved came as vice-president Joe Biden warned the American public to expect more casualties from the fight against the Taliban in Afghanistan. "I hate to say it, but yes, I think there will be," he told a reporter.

Biden said in response to a question about an increase in casualties from an interviewer on a US political show. "There will be an uptick."

Biden's solemn prediction followed his comments that the Obama administration had inherited a "real mess" in Afghanistan.

The new US president has pledged to send more than 30,000 extra troops to bolster the estimated 25,000 already in the battlefield.

Britain has more than 7,000 troops currently in Afghanistan , mostly based in Helmand Province, and plans are under way to despatch a further 1,700.

In his first major interview since taking the oath as vice president, Biden painted a gloomy picture - both domestically and on international matters.

On Afghanistan, he said: "So the bottom line here is, we've inherited a real mess. We're about to go in and try to essentially reclaim territory that's been effectively lost."