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Obama's push for spending to boost economy gets mixed reaction

By the CNN Wire Staff
  • President Obama sent congressional leaders a weekend letter seeking approval of spending proposals
  • Congress members differ on Obama's call to spend more to boost the economy
  • The measures include spending $50 billion to help state and local governments strapped by the recession
  • Spending measures would help jobless, prevent layoffs of teachers

Washington (CNN) -- President Barack Obama sent a weekend letter to congressional leaders seeking approval for previously proposed spending measures intended to protect the nation's economic recovery, but initial response Sunday was mixed.

The Saturday letter to the leaders of the House and Senate asked for the Senate to approve an $80 billion measure offering extended jobless benefits as well as tax breaks and better access to credit for small businesses. In the letter, Obama also sought congressional support for proposals totaling about $50 billion to help state and local governments avoid layoffs and service reductions.

Obama's letter also noted that his administration was holding down some annual spending and had created a bipartisan commission intended to devise a deficit reduction strategy.

"Ultimately, reining in our deficit will take major steps, including the effective implementation of health reform and laying the conditions for the success of the bipartisan fiscal commission," Obama's letter said. "Only through this approach of aggressive and well-designed targeted and temporary actions, alongside measures to ensure a sustainable and responsible long-term budget outlook, will we be able to fulfill our economic potential."

David Axelrod, Obama's senior adviser, said Sunday that Obama's letter was intended to "underscore the urgency" of continuing to support economic recovery.

"We want to keep that recovery going, we want to accelerate that recovery," Axelrod told reporters, noting that failure to act would cause 300,000 school teachers to get laid off.

"This will be the consequence of inaction," Axelrod said, adding: "In this period of transition from the recession to recovery, we can't pull up short and make the mistake that other countries and our own country has made in the past by pulling out of recovery efforts too soon."

However, Republican Rep. Mike Pence of Indiana told CNN's "State of the Union" that Obama's letter showed the administration was "groping for some economic policy."

"We need to abandon this spending approach to stimulus, adding to deficits and debt, and we need to provide immediate across-the-board tax relief for working families, small businesses, and family farms," Pence said. "We need a new approach. The economic policies of this administration and this Congress are failing to put America back to work."

On the same program, Democratic Rep. James Clyburn of South Carolina said the Republican call for lower taxes was simplistic and would bring back failed policies of the past.

"We all know exactly what this president inherited, and we will stop talking about that inheritance when Congressman Pence and others stop talking about taking us back to those failed policies," Clyburn said. "We're trying to correct some things that we had absolutely nothing to do with, and the American people know that."

Asked how long the Obama administration and Democrats could continue blaming the Bush administration for economic hardship, Clyburn responded: "The economy is our baby."

"But let's stop talking about cutting taxes, cutting taxes, cutting taxes," Clyburn said. "That simplistic approach to trying to get this economy moving again is what got us in this position in the first place."

Pence responded that Obama and the Democrats were further expanding a national debt that doubled under President George W. Bush by piling on government spending through the economic stimulus bill and other steps.

"We're talking about breaking from the runaway federal spending that characterized this administration and the last administration and say it's time for fiscal discipline," Pence said.

On ABC's "This Week," House Majority Leader Rep. Steny Hoyer, D-Maryland, acknowledged a reluctance in Congress to pass more spending bills, especially with mid-term elections looming in November, but he supported Obama's call.

"We need to expend additional dollars to make sure that we don't have significant layoffs in the next few months, which will again depress the economy," Hoyer said, suggesting the money could come from the $800 billion economic stimulus bill of 2009.

House Minority Leader Rep. John Boehner, R-Ohio, challenged the call to spend more without cutting an equal amount from elsewhere in the budget.

"Fact is that the spending spree in Washington is continuing to run unabated," Boehner said. "The American people are screaming at the top of their lungs, 'Stop!' And to move this without finding other offsets in spending, I think, is irresponsible."