Americans should feel some relief that President Barack Obama, Congress and Treasury Secretary Timothy F. Geithner are moving aggressively to confront the nation's mounting economic crisis. The Senate yesterday passed its version of an economic stimulus bill designed to pump $838 billion into the economy, and Mr. Geithner laid out a sweeping plan to invest up to $1.5 trillion to rescue the nation's banking system, provide credit to consumers and small businesses and help homeowners facing foreclosure.
But now the House and Senate have to quickly reconcile their differences and pass a final version of the stimulus bill for Mr. Obama to sign before another week passes. And Mr. Geithner should act swiftly to clean up the banks' toxic assets and provide fresh credit for small businesses, entrepreneurs and consumers.
Many citizens have understandable doubts about the proposed flood of spending. As the first phase of the financial bailout plan showed, there is no definitive remedy or much to show for the billions spent so far. Republicans leaders in Congress have been exploiting this unease by asserting that the stimulus bill is misguided. It should be replaced, they say, by less-expensive legislation that would rely on tax cuts to promote economic growth.
But, as Mr. Obama rightly noted this week, it's hard to take seriously criticism from a party that ran the nation into an economic ditch over the last eight years, borrowing trillions to fund the Iraq war and tax cuts for the rich, leaving the country with a $1 trillion budget deficit.
The president also spoke the truth when he acknowledged that while the stimulus package may be less than perfect, it will be close enough to start replacing some of the millions of jobs lost in recent months. Still, he needs to persuade members of the congressional conference committee on the stimulus package to forgo some tax cuts for increased direct aid to hard-pressed states. That would improve the legislation, but the government also must keep tabs on how the stimulus money is spent.
At the same time, both Mr. Obama and Mr. Geithner should be held to their promises to conduct tough new audits to assess the financial health of the largest banks and to hold banks accountable for any aid they receive.
There are still important unexplained details of Mr. Geithner's financial rescue package. How will he persuade private investors to purchase toxic bank assets without virtually guaranteeing them a profit? And a plan has yet to be produced on the promise to spend up to $100 billion to help homeowners facing foreclosure, a key goal, long neglected.
As Mr. Obama has repeatedly cautioned, the road to recovery is likely to be long and difficult. But both the stimulus package and the financial rescue plan are vital first steps. Now, work on both needs to be completed and the recovery effort quickly put in motion.