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Obama pitches economic plan, diplomacy with Iran

US President Barack Obama yesterday took his case for a massive economic stimulus package directly to the recession-weary American people and held out an olive branch to Iran in its nuclear standoff with the West.

Holding his first news conference since taking office, Obama pressed Congress to "act without delay in the coming week" to resolve differences over an US$800 billion-plus economic rescue plan expected to help define his young presidency.

"With the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life," Obama said during a televised prime-time appearance in the East Room of the White House 20 days after his historic inauguration.

Underscoring his efforts to break with the foreign policy of his predecessor George W. Bush, Obama said he saw the possibility of diplomatic openings with US foe Iran in the months ahead.

"We will be looking for openings that can be created where we can start sitting across the table face-to-face, diplomatic overtures that will allow us to move our policy in a new direction," Obama said in a dramatic shift from Bush's strategy of seeking to isolate Tehran instead of engaging it.

Sandwiched between campaign-style trips to economically blighted areas in Indiana and Florida, it gave Obama a chance to pitch his solutions for confronting what he termed "the most profound economic emergency since the Great Depression."

The new Democratic president also hoped to regain momentum following a week in which a key cabinet nominee withdrew in a flap over unpaid taxes and his push for the stimulus plan hit unexpected snags in the Democratic-led Congress.

It remained to be seen, however, whether his words -- spoken in the calm, deliberative tone that helped him win the presidency -- would be enough to ease Americans' anxieties and stabilize jittery world markets.


Despite an ideological split along party lines, the House of Representatives approved an US$819 billion economic recovery plan last week.

Just hours before Obama stood in front of the cameras, the Senate moved a step closer to passing its own bill, setting up a vote on a US$838 billion emergency package on Tuesday.

But delays in fashioning compromise legislation, a mix of government spending and tax breaks, could prevent Congress from delivering a final bill to Obama by his deadline this weekend.

Saying his administration had inherited a deficit of over US$1 trillion, Obama said, "Doing too little or nothing at all will result in an even greater deficit of jobs, incomes, and confidence. That is a deficit that could turn a crisis into a catastrophe."

While the economy topped the agenda, Obama was also offered some of his most conciliatory language so far toward Tehran. His more diplomatically focused approach to Iran is seen as an important linchpin in fixing the United States' image abroad.

Obama has already moved swiftly to reverse some of Bush's more divisive policies, ordering the closing of the internationally condemned Guantanamo military prison and an end to harsh interrogation of terrorism suspects held there.

He is also shifting the US military focus from Iraq to Afghanistan.

Reiterating an openness to direct diplomacy with Tehran, Obama said he was ready to "take an approach with Iran that employs all of the resources at the United States' disposal."

He insisted, however, that Iran must stop its pursuit of nuclear weapons, something it denies it seeks, end support for terrorist organizations and cease "bellicose language" toward US ally Israel.

Obama had a test run for yesterday's news conference with a visit to Elkhart, Indiana, where he highlighted the woes of economically hard-hit Americans and warned Congress that "endless delay or paralysis in Washington in the face of this crisis will bring only deepening disaster."

Unemployment in Elkhart, a center for recreational vehicle manufacturing, has soared to 15.3 percent from 4.7 percent in the past year. Obama flies to Fort Myers, Florida, on Tuesday for another town-hall meeting with recession-pinched residents.


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