WASHINGTON, Jan 31: US President Barack Obama said on Saturday his administration will soon announce measures to free up credit for businesses and homeowners as he seeks to jolt the world’s biggest economy back to life.

“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 said in his weekly radio and Internet address.

The US president, focusing on the troubled economy as his highest priority after taking office on January 20, offered no details for the plan but gave a broad outline as his administration prepares to draw on a massive bailout fund for the financial sector.

Obama’s remarks came a day after the release of dire figures showing that the US economy shrank by nearly four per cent in the last quarter of 2008, the sharpest decline since 1982.

Obama’s address appeared to prepare the ground as the White House weighs how to use the remaining half of the 700-billion-dollar bailout fund created last year to stem a meltdown among financial firms and lenders.

Obama also called on the Senate to quickly approve his stimulus plan, which aims to create jobs and tackle the “unprecedented economic turmoil,” after the House of Representatives this week approved an 819-billion-dollar version of the measure.The Senate is poised to debate the measure next week, after it passed in the House without Republican support.

Apart from the mammoth stimulus plan designed to save or generate jobs, Obama said his administration wanted to take action to lower the cost of loans to home buyers and entrepreneurs.

“Just as we jumpstart job creation, we must also ensure that markets are stable, credit is flowing, and families can stay in their homes.

“We’ll help lower mortgage costs and extend loans to small businesses so they can create jobs,” he added.

Obama said the soon-to-be-unveiled credit strategy would include safeguards to ensure chief executives do not use taxpayers’ money for pay bonuses, repeating his condemnation of financial firms’ excesses.

“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,” Obama 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 road to recovery demands that we all act responsibly, from Main Street to Washington to Wall Street.”

Obama said the credit moves would be carried out openly with strict oversight to prevent abuses.

“We will insist on unprecedented transparency, rigorous oversight and clear accountability so taxpayers know how their money is being spent and whether it is achieving results.”

With the stimulus plan moving to the upper chamber of Congress, Obama has faced criticism from Republicans that it contains wasteful spending on health insurance and energy measures not directly tied to creating jobs.

But Obama is touting the package both as a way to stem unemployment and provide relief to struggling Americans.

He vowed to “continue working with both parties so that the strongest possible bill gets to my desk.”

“With the stakes so high we simply cannot afford the same old gridlock and partisan posturing in Washington,” he said.

He reiterated a warning that the foundering US economy “is likely to get worse before it gets better.”

The latest data on gross domestic product showed US companies with ballooning inventories as consumer demand declined, suggesting the economy would deteriorate further in coming months.

The US president said the dismal numbers on the country’s economic growth told only a part of the story.

“Many Americans have seen their lives turned upside down,” he said.

“Parents are struggling to pay the bills. Patients can’t afford care.

Students can’t keep pace with tuition. And workers don’t know whether their retirement will be dignified and secure.”—AFP