Obama to Congressional Leaders: Give in a Little

Feb. 3, 2009 — -- President Obama worked to win Republican support of his economic stimulus bill by calling in Democratic congressional leaders and telling them to make concessions to their GOP colleagues.

A group of centrist Democrats is emerging as a potential force to reshape the bailout package by teaming up with moderate Republicans to reduce the overall cost of the bill and funnel more money to rebuilding the nation's infrastructure.

Pressure also mounted on Republican leaders as four GOP governors, including Florida's Charlie Crist and California's Arnold Schwarzenegger, signed a letter Monday urging passage of the stimulus bill. They were joined by Vermont's Jim Douglas and Connecticut's Jodie Rell, both Republicans, along with 15 Democratic governors.

The governors have become powerful allies for Obama in the stimulus debate as states are facing huge budget shortfalls along with increased demand for services by the growing number of unemployed.

California has been hit particularly hard by the economic downturn. With nearly 2 million people out of work, the state's unemployment rate is more than 9 percent. In addition, the state faces a budget deficit of more than $40 billion.

Obama will also blitz the major broadcast and cable networks today with interviews in which he will likely press for quick passage of the stimulus bill.

Watch Charlie Gibson's interview with President Obama on "World News" at 6:30 p.m. ET

At the White House Monday evening Obama met with Senate Majority Leader Harry Reid of Nevada and Party Whip Dick Durbin of Illinois, as well as House Speaker Nancy Pelosi of California and House Majority Leader Steny Hoyer of Maryland.

White House spokesman Robert Gibbs later issued a statement saying they had a "productive meeting" and agreed to work for a "bipartisan consensus" on the measure.

What Gibbs didn't say is that Obama told the Democratic leaders to strip away some spending provisions of the massive bill that are not likely to create new jobs, and to increase some tax credits. The president urged the House and Senate leaders to accept some Republican suggestions.

Republicans have objected that the bill is loaded with spending programs that will not boost the economy. The Republicans have also sought more tax breaks to stimulate spending by taxpayers and businesses.

Increase Housing Tax Break, More Money for Roads and Bridges

Among the changes the White House indicated it is willing to accept are the doubling of the tax credit for buying a new home from $7,500 in the House bill to $15,000, and increasing the amount of money to be spent on roads, bridges and other parts of the nation's infrastructure.

There are signs that bipartisan efforts to reshape the $819 billion bill are taking hold in the Senate, which would be in sharp contrast to the vote in the House where the bill passed without the support of a single Republican.

A major factor in shaping the bill is likely to be a group of centrist Democratic senators, including Sens. Ben Nelson of Nebraska, Kent Conrad of North Dakota and Jim Webb of Virginia, and moderate Republicans, including Maine's two senators Susan Collins and Olympia Snowe.

Nelson has said that he would vote against the bill in its current form.

The two sides met Monday to craft amendments that will appeal to Republicans by cutting out billions of spending provisions, but add tens of billions of dollars to what is already in the bill for the country's infrastructure, do more for housing and possibly reduce the overall cost of the bill.

The House version totaled $819 billion, while initial drafts of the Senate bill neared $900 billion.

Republicans are also considering an alternative bill that would put more emphasis on tax breaks and would allow qualified borrowers who have not fallen behind on their mortgage payments to refinance into new mortgages with interest rates as low as 4 percent.

If the first vote on an amendment today is an indication, it will require some hard negotating to hammer out a package both sides are willing to live with.

Republicans killed a Democratic effort on a procedural vote add $25 billion to infrastructure repair, which would have brought the total infrastructure spending in the bill to $167 billion. The Democrats needed 60 votes, but fell two votes shorts. Only two Republicans, Sens. Arlen Spector of Pennsylvania and Kit Bond of Missouri, voted with the Democrats. One Democrat, however, Sen. Mary Landrieu of Louisiana, voted with the Republicans.

Senate Minority Leader Mitch McConnell said Republicans blocked the increase for infrastructure spending because "it just expanded the size of the bill."

"We need to pare it down ... rather than have it ballooning upwards," McConnell said.

Referring to size of the proposed bailout, McConnell added, "We need to sober up here and take a look at what we're doing."

Obama had originally hoped to win 80 votes in the Senate but is now hoping to pick up enough Republican votes to claim it has bipartisan support. He has also set a deadline of mid-February for the House and Senate to pass their bills and iron out the differences between the two measures.

He hopes to sign it into law around President's Day, in mid-February.

ABC News' Rick Klein contributed to this report.