Obama's $ 800 bn bailout plan disastrous: Republicans

Washington, Feb 9: US Republicans on Sunday, Feb 8 warned President, Barack Obama of leading the country to financial disaster with the $800 billion-plus bailout package, reported CNN.

"Everybody on the street in America understands that," said Sen Richard Shelby, the ranking Republican on the Senate Banking Committee. "This is not the right road to go. We'll pay dearly."

On the other hand, Lawrence Summers, the head of the administration's National Economic Council said that Republicans had lost credibility on the issue.

"Those who presided over the last eight years -- the eight years that brought us to the point where we inherit trillions of dollars of deficit, an economy that's collapsing more rapidly than at any time in the last 50 years -- don't seem to me in a strong position to lecture about the lessons of history," one of the news channels reported Summers as saying.

But, Obama, his advisers and Democratic leaders of Congress argue that a stimulus bill of $830 billion will pull out the US economy from crisis.

The nonpartisan Congressional Budget Office (CBO) reported last week that the measure is likely to create between 1.3 million and 3.9 million jobs by the end of 2010, lowering a projected unemployment rate of 8.7 per cent by up to 2.1 per centage points.

This step by the Government to over spend over the next decade would force out private investments lowering long-term economic growth forecasts by 0.1 percent to 0.3 per cent by 2019, said CBO.

In a concession to Republicans, about a third of the bill involves tax cuts. But the measure is expected to have only minimal GOP support when it goes to a scheduled vote early this week.

The version of the bill that passed the House of Representatives had no Republican votes.

OneIndia News (With inputs from Agencies)