WASHINGTON (AP)
President Barack Obama was sending his top aides to Congress today to promote his ambitious budget package as his efforts to reverse the harrowing economic slide slammed into more bad news. The economy took another hit Monday when the Dow Jones Industrial Average plunged below 7,000 for the first time since 1997. Troubled insurance giant American International Group Inc. reported losing nearly $62 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history. Administration officials say the U. S. economic crisis requires bold action to right the economy and expand access to health care while providing tax breaks to middle- and low-income families. Obama and his top aides unveiled an outline for his budget package last Week, but today will provide lawmakers their first opportunity to publicly question top officials about the details. Treasury Secretary Tim Geithner was expected to draw sharp questions today from the House Ways and Means Committee about tax increases Obama wants for people who make more than $200,000 a year. The panel also is likely to question him about Obama's declaration last week that he may be asking Congress this year for another $750 billion bailout for troubled banks. Meanwhile, White House Budget Director Peter Orszag was to testify today before the House Budget Committee on Obama's spending priorities in the administration's $3.5 trillion budget blueprint for the 2010 fiscal year beginning Oct. 1. Lawmakers in both parties question Obama's call to reduce high-income earners' tax deductions for the interest on their house payments and for charitable contributions. Also drawing fire is his proposal to start taxing industries on their greenhouse gas pollution a move sure to raise consumers' electric rates. Obama has been careful throughout the presidential campaign and since being elected to say he would impose higher taxes only on the wealthiest. Republicans, however, say Obama's energy proposal amounts to a tax that would increase energy costs for all Americans. "This massive hidden energy tax is going to work its way through every aspect of American life," said Rep. Dave Camp, the top Republican on the Ways and Means Committee. "How we light our homes, heat our homes and pay for the gas in our cars, in every phase of our daily lives, we will be paying higher costs." Under the energy plan, Obama wants to reduce the emissions blamed for global warming by auctioning off carbon pollution permits. The proposal, known as cap and trade, is projected to raise $646 billion over 10 years. Most of the money would be used to pay for a tax credit, up to $400 a year to individuals and $800 a year to couples. The plan also would raise money for clean-fuel technologies, such as solar and wind power. Orszag has acknowledged that the energy proposal would increase costs for consumers, but he argues that the vast majority of consumers will get tax breaks elsewhere in Obama's budget package. The Obama administration has produced a flurry of economic plans and short-term programs in its six weeks in office, in the face of an economic downturn after the nation's housing market began its collapse last year. The bursting bubble threatened the country with a financial implosion and put the economy in reverse despite a $700 billion financial bailout package set up by the Bush administration. The emergency fund has kept the economy on life support, but Obama's subsequent $787 billion economic stimulus package has yet to kick in. The president has already set forth a new budget outline that foresees the possible need to spend as much as $750 billion more to prop up America's banks and investment houses. White House spokesman Robert Gibbs said that the latest infusion of $30 billion of government money for insurance giant AIG on top of $150 billion it had already received was critical as the insurer restructures, but the administration was not ruling out future aid. Gibbs said the Treasury Department determined that the potential failure of AIG was too big a risk to take, given the fragile economy. Today, Obama also was turning his attention to global efforts to stem the economic meltdown when he meets with British Prime Minister Gordon Brown. Brown is laying the groundwork for the G-20 economic summit of advanced and developing nations in London next month. The summit, which Brown is chairing, is critical for improving global economic confidence. Brown plans to deliver a tough economic message for the White House and U. S. lawmakers, whom he will address Wednesday. He is urging the United States to avoid protectionism at a time that it has populist appeal. Meanwhile, senior Obama administration officials say the president has written to Russian President Dmitry Medvedev, suggesting that an American missile defense system in Eastern Europe might not be necessary if Moscow helps to block Iran from getting long-range missiles. Plans for deploying U.S. missile defenses in Poland and the Czech Republic, supposedly to guard against Iranian attacks on U.S. allies in Europe, are among a host of issues that soured U. S.-Russia relations during the administration of former President George W. Bush. There had been earlier indications but less obvious that Obama might be willing to set aside the missile defense system. One administration official, speaking on condition of anonymity, confirmed that Obama's letter said a missile deployment might become unnecessary if Washington and Moscow together could address "the Iran missile threat." ___ Associated Press writers Steven R. Hurst, Desmond Butler and Stephen Ohlemacher contributed to this story.
