More of economic-rescue plan to be unveiled

WASHINGTON — This week will be a pivotal one for President Obama and the U.S. economy, as interlocking parts of his economic-rescue effort are set to be signed, sealed or delivered.

Obama will hear from automakers today on how they will restructure to get more taxpayer bailout money. He then will sign a $787 billion stimulus bill in Denver and fly to Phoenix, where he will unveil Wednesday how his administration will spend at least $50 billion of Wall Street rescue money to begin halting mortgage foreclosures.

And sometime during the hectic week, the Treasury Department is expected to provide more details on a $100 billion-plus plan for the federal government and private investors to team up to rid bank balance sheets of toxic assets. Those are the distressed mortgage securities and other complex financial instruments that investors are shunning and that are crippling bank balance sheets and restraining lending.

On their own, each of these developments would be dramatic by historical standards. But for any to succeed, they will need to work in unison with the others.

Even before General Motors (GM) and the United Auto Workers (UAW) finalized their pact for mutually assured survival, the White House confirmed Monday that the idea of naming a "car czar" to oversee industry restructuring was out. An interagency task force, led by Treasury Secretary Timothy Geithner and chief White House economic adviser Lawrence Summers, was in.

Meanwhile, GM and Chrysler were in down-to-the-wire restructuring talks with the UAW on Monday to stave off bankruptcy. GM received more than $9 billion in taxpayer help late last year and wants $4 billion more. Chrysler got $3 billion and seeks $4 billion more.

The carmakers' interim report will be overshadowed today when Obama signs the economic-stimulus plan, which includes public-works spending, aid to states to keep essential services intact, social services for the poor, and modest tax credits and rebates for businesses and consumers.

Some economists say the plan is too small; others say it doesn't provide enough tax incentives to spur purchases of homes or cars. The plan's ultimate success, however, will depend, in large part, on the other efforts and on whether they'll arrest the decline in home prices and restore banks to health.

Obama is expected to announce a plan to help some borrowers avoid foreclosure and see their mortgages modified to bring monthly payments to a range from 31 to 38 percent of after-tax income. Banks may be asked to take losses, with taxpayers perhaps sharing their pain.