Stimulus: It's law. Now on to budget

After 5 weeks in office, Obama signs economic rescue plan and unveils major housing initiative. Coming up: Focus on the budget.

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By Ben Rooney, staff writer

Which government rescue program will help the most people?
  • Housing
  • Stimulus
  • Autos
  • Banks

NEW YORK ( -- President Obama took two big steps forward this week in his campaign to heal the nation's ailing economy: He enacted a stimulus bill and pulled back the curtain on his plans for helping homeowners.

The milestones came on another difficult week in the economy. Investors continued to bail on stocks. The Dow Jones industrial average took another beating this week and is trading 48% below its record high in October 2007.

Despite the barrage of grim news and the growing ranks of the unemployed, most Americans still approve of Obama's performance, according to a CNN/Opinion Research Corp. poll released Friday.

The poll found that 67% of those surveyed approve of the way Obama is handling his job as president. That's a clear majority, but down slightly from 76% about a week ago.

While 60% of those polled expressed support for the $787 economic stimulus bill, which was signed into law Tuesday, 53% indicated that they don't think it will yield significant economic improvement and 67% said it won't help them personally.

Clearly, Americans have their doubts. But the stimulus plan attracted the attention of a key demographic: the nation's mayors.

One of the main goals of the stimulus plan is to provide cash-strapped city and state governments with much needed funds for "shovel-ready" infrastructure projects. Obama cautioned mayors on Friday to spend the money wisely.

The stimulus plan raised hackles overseas for certain Buy American provisions. Obama traveled to Canada this week to discuss trade in his first international trip as president.

Looking ahead, Obama will address Congress on Tuesday and on Thursday will outline his priorities for the nation's 2010 budget.

Among the topics expected to come up: tax policy changes, programs the administration wants to expand or eliminate, and the long-term funding challenges facing Medicare and Social Security.

On Monday, Obama and members of his administration are set to hold a Fiscal Responsibility Summit with lawmakers, academics and advocacy groups. He'll also meet with the nation's governors to talk stimulus.

100-day scorecard: Week 5 will continue to track Obama's first 100 days in office and keep score of the government's unprecedented efforts to fix the ailing economy. (Last week's article is available here.)

Fighting foreclosure: Obama traveled to Arizona Wednesday to unveil the details of a $75 billion foreclosure prevention plan designed to aid millions of distressed homeowners and jolt the housing market out of its stupor.

The multi-pronged plan calls for modifying loans for borrowers both at risk or already in default and for allowing those with little or no home equity to refinance into more affordable loans through interest-rate reductions.

While Obama's plan also calls for servicers to voluntarily modify loans, it provides some major incentives for them to do so.

In addition to such inducements, Obama said the administration was working with Congress to amend bankruptcy laws to allow judges to modify mortgages, a move that is very unpopular with the financial industry.

Enacting stimulus: On Tuesday, Obama signed the $787 billion American Recovery and Reinvestment Act into law.

Among the act's key initiatives: creating or saving 3.5 million jobs by improving physical infrastructure, investing in energy projects and providing tax relief to individuals and businesses.

First and foremost, the package is aimed at limiting the fallout from the recession.

"Today does not mark the end of our economic troubles," Obama said before signing the bill in Denver. "But it does mark the beginning of the end."

Still, stocks plummeted Tuesday, falling nearly 4%, as investors worried that the stimulus bill won't be enough to counter the economic malaise.

Saving the automakers: Obama appointed a task force to oversee the restructuring of the auto industry as General Motors (GM, Fortune 500) and Chrysler LLC. asked for another $21.6 billion in federal loans to stave off bankruptcy.

The task force will be lead by Treasury Secretary Tim Geithner and Larry Summers, director of the National Economic Council. It brings together various government agencies as well as nationally recognized restructuring expert Ron Bloom.

GM and Chrysler presented Congress with restructuring plans Tuesday detailing the companies' efforts to become economically viable. The plans included another 50,000 job cuts worldwide by the end of the year.

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