Obama pledges mortgage help with new financial plan

US President Barack Obama promised yesterday to help lower Americans' mortgage costs with a new plan, coming soon, that would revive the financial system and "get credit flowing again."

Obama, who has made fighting the country's economic and financial crises the top priority of his young administration, called on the US Senate to approve an economic stimulus bill that the House of Representatives passed last week.

But as economic conditions get worse the president said new strategies were coming to address the country's ills.

"Soon my Treasury secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families," Obama, a Democrat, said in his weekly radio address.

"We'll help lower mortgage costs and extend loans to small businesses so they can create jobs."

Obama did not offer specifics about the new plan or say when it would be unveiled. His chief spokesman, Robert Gibbs, said last Friday that the White House would hold meetings this week about financial industry regulation.

Republicans, who opposed the president's stimulus package of over $800 billion largely because of its spending priorities, suggested mortgage help as well, proposing government-backed four percent fixed-rate mortgages for "any credit-worthy borrower," Senate Republican Leader Mitch McConnell said.

"The availability of these low-interest loans would increase demand for houses significantly and low-interest mortgages would boost household income," McConnell said in a separate radio address.

Obama said his plan would ensure corporate chief executives do not siphon away tax dollars to fund big bonuses, expressing outrage again at reports of big pay-outs in 2008 despite massive job cuts, financial losses and government bailouts.

"We learned this week that even as they petitioned for taxpayer assistance, Wall Street firms shamefully paid out nearly $20 billion in bonuses for 2008," the president said.

"While I'm committed to doing what it takes to maintain the flow of credit, the American people will not excuse or tolerate such arrogance and greed."

The president said he would insist on "unprecedented transparency, rigorous oversight, and clear accountability" for funds that went toward stabilising the financial system.

He repeated his mantra that the country's economic picture would likely get worse before it got better and seemed to hedge a bit on how many jobs his proposals would create and by when.

In yesterday's address he said his stimulus package would save or create at least three million jobs "over the next few years". During his address on January 10, before he had taken over the presidency from Republican George W. Bush, Obama said an analysis by his advisers showed up to four million jobs could be saved or created by 2010 through the package.

Obama said he would work with both political parties to ensure a strong stimulus bill eventually made it to his desk.