U.S. Congress clears way for 2nd half of financial bailout

The U.S. Congress laid the foundation for president-elect Barack Obama's economic recovery plan on Thursday with remarkable speed, clearing the way for a new infusion of bailout cash for the financial industry, while majority Democrats proposed spending increases and tax cuts totalling a whopping $825 billion US.

Two days after Obama personally lobbied for the release of $350 billion in bailout funds, the Senate narrowly turned aside a bid to block the money.

Across the Capitol, Democratic House Speaker Nancy Pelosi said "immediate job creation and then continuing job creation" were the twin goals of the separate stimulus legislation.

It recommends tax cuts for businesses and individuals while pouring billions into areas such as health care, education, energy and highway construction.

Pelosi and Senate Majority Leader Harry Reid have pledged to have the economic stimulus bill ready for Obama's signature by mid-February.

Obama pledges up to $100B aid for homeowners

Both houses debated Obama's call to release another $350 billion from the financial bailout package, but the Senate vote was the triumph he had sought. Despite bipartisan anger over the Bush administration's handling of the program to date, Democratic allies of the incoming president prevailed on a 52-42 roll call.

The vote followed a commitment by Obama to use as much as $100 billion of the funds to help homeowners facing foreclosure proceedings.

The money will be available in less than two weeks, at a time when there is fresh evidence of shakiness among banks.

Obama was at his transition office across town from the Capitol — and outgoing U.S. President George W. Bush relegated to the role of virtual onlooker — as events played out at the dawn of a new Democratic era in government.

Obama has called for swift and bold action to confront an economic debacle unrivaled since the Great Depression.

The president-elect, who is scheduled to travel to hard-hit Ohio on Friday to promote his economic program, also announced he would convene a "fiscal responsibility summit" in February to focus on long-term problems with the economy and the skyrocketing costs of benefit programs such as Social Security and Medicare.

"We've kicked this can down the road and now we are at the end of the road," he said in a Washington Post interview posted on the newspaper's website.