01/19/2009 05:12 am ET Updated May 25, 2011

Obey: U.S. Falling Into "Massive, Massive Hole"

As Democrats move closer to taking command in Washington, there is growing alarm and anger in the party over the economy Barack Obama will inherit and the huge cost incurred after months of stalemate between Congress and President Bush over how to respond.

Thursday night, the White House was hoping to announce -- possibly as early as Friday -- plans to stave off bankruptcies in the auto industry by using available Treasury funds, a decision favored by Democrats. But Congress and President Bush remain at loggerheads over any larger fiscal stimulus package -- even after leading economists in both parties have urged action.

Democrats are reduced to speaking of a "jobs salvaging" bill that can only hope to slow the rise in unemployment next year. Discussions have moved past just increasing food stamp and unemployment benefits and also include the possibility of Washington helping workers who lose their jobs to finance COBRA payments needed to keep their family healthcare coverage.

Given the long impasse, speed is a huge priority. The first choice seems to be a single large fiscal-stimulus bill, but it can't be ruled out that the money could move in tranches if other legislative vehicles become available.

Caught in the middle is House Appropriations Committee Chairman David Obey, who must spearhead the recovery package for Obama next month. He told Politico that the transition has proven to be "a disaster for the country because Bush is sitting around like Hoover did."

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