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Obama: Execs' Spending Needs Controls

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The Associated Press

Published: February 1, 2009

WASHINGTON - In his radio address Saturday, President Barack Obama promised to lower mortgage costs, offer job-creating loans for small businesses, get credit flowing and rein in free-spending executives, as he prepares a new road map for spending billions from the financial rescue plan.

The White House is deciding how to structure the remaining half of the $700 billion that Congress approved last year to save financial institutions and lenders.

FINANCIAL SYSTEM

Treasury Secretary Timothy Geithner will soon announce a new strategy for reviving the country's financial system while trying to make sure banking executives do not misuse federal money meant to assist their companies, Obama also said.

Administration officials have said restrictions on executive pay at those companies benefiting from the rescue program may be announced this week. Later, revisions in the program will be announced under which the most toxic assets of the banks will be bought up or guaranteed, so that the institutions will have incentives to unclog the credit streams.

STATES AND STIMULUS

Most Republican governors have broken with their GOP colleagues in Congress and are pushing for passage of Obama's economic aid plan that would send billions to states for education, public works and health care. Republican Florida Gov. Charlie Crist worked the phones last week with members of his state's congressional delegation, including House Republicans. Vermont Gov. Jim Douglas, the Republican vice chairman of the National Governors Association, planned to be in Washington on Monday to urge the Senate to approve the plan.

TRADE

Less than two weeks into office, Obama faces a dilemma over protectionist provisions in a massive economic stimulus bill: Backing the measures could set off a trade war, while opposing them could trigger a backlash from his supporters.

Information from The New York Times was used in this report.

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