WASHINGTON (AP) _ President Barack Obama regrouped Sunday at his Camp David retreat, preparing to unveil the administration's plans for a long-term overhaul of the stricken U.S. financial system.
The Obama administration, appearing blind-sided by and wrong-footed in its response to millions of dollars in bonus payments to employees of a giant insurance and financial company being kept afloat by taxpayer bailout money, was expected as early as Monday to detail its vision for easing the country's seized-up credit markets. The Treasury Department plans to take as much as $1 trillion in so-called toxic assets off the books of endangered banks.
Christina Romer, a top Obama economic adviser, said the government would achieve that goal by using $100 billion from the $700 billion financial rescue package to entice private investors to buy the bad assets and hold them until the system recovers. She said the Federal Reserve would inject more capital as well, but did not specify how much.
The goal: Thawing the frozen credit system which has been denying loans to businesses and consumers, compounding the country's deep recession.
Romer said the approach is one more piece in the administration's plan to revive the collapsing economy. Romer said she did not think Monday's expected announcement would cause the same kind of stock market plunge that greeted Treasury Secretary Timothy Geithner's original discussion of the plan last month.
On Tuesday, Obama will hold a nationally broadcast news conference as he seeks to regain the offensive for his ambitious agenda. Obama wants to use the country's worst economic crisis since the Great Depression of the 1930s as a vehicle also for revamping national health care, energy, education and tax policies.
But being heard above the din may prove difficult. Lawmakers are wrangling over taxing the big bonuses for employees of American International Group Inc. and concerns that Obama's budget could generate $9.3 trillion in deficits over the next decade.
"I realize there are those who say these plans are too ambitious to enact,'' Obama said in his weekend radio and Internet address. "To that I say that the challenges we face are too large to ignore. I didn't come here to pass on our problems to the next president or the next generation _ I came here to solve them.''
Over the past week, Obama sought to spread his message unfiltered to people, tapping his massive e-mail list to promote his agenda one on one and speaking to enthusiastic supporters at town hall meetings in California. But dominating all else was the disclosure that AIG had paid out $165 million in bonuses to employees, including to traders in the financial unit that took the company and the U.S. financial system to the brink of collapse.
The New York Times reported Sunday that Obama's financial regulatory proposals would include recommendations for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies. The administration was still debating details of the plan, including how broadly it should be applied and how far it should go beyond simple reporting requirements, the Times said, quoting unnamed officials.
Last week ended with more news that kept the White House on the defensive. Congressional auditors estimated the country's budget deficit in coming years would nearly double what the administration was predicting.
Sen. Judd Gregg, the top Republican on the Senate Budget Committee, declared the president's massive budget proposal would bankrupt the United States. The New Hampshire senator, who withdrew his nomination to serve Obama as commerce secretary, said Obama's spending plan would leave the next generation of Americans living in a country that was too expensive to afford.
Republicans used their Saturday response to condemn Obama's budget as a breathtaking spending spree. As states and families are struggling to cut spending, the president's budget "spends too much, taxes too much and borrows too much,'' said Mississippi Gov. Haley Barbour.
Attempting to diminish the importance of the angry noise in the capital, Obama said Saturday that people are more concerned about having a paycheck and being able to pay college or medical bills than they are about "the news of the day in Washington.''
Those are the concerns, he said, that he addresses in his budget, which he calls an economic blueprint for the future. It is "a vision of America where growth is not based on real estate bubbles or over-leveraged banks, but on a firm foundation of investments in energy, education and health care that will lead to a real and lasting prosperity,'' Obama said.
He also took the opportunity in an interview with CBS television's "60 Minutes'' to affirm his support for Geithner, roundly criticized over the bonus flap and steps to revive the economy.
In the interview set to air Sunday evening, Obama said that if Geithner offered his resignation, the answer would be, "Sorry buddy, you've still got the job.'' CBS released excerpts Saturday.
Gregg, too, backed Geithner and said _ despite criticism of the budget plan _ that the administration's financial rescue efforts were needed and appropriate.