By Richard Cowan
WASHINGTON, Jan 17 (Reuters) - The early success of Barack Obama's presidency could hinge on one of the first pieces of legislation Congress sends him -- a huge $825 billion tax-cut and spending bill to help the staggering U.S. economy.
As Obama takes the oath on Tuesday to become president, the first African-American to hold the job, he no doubt will consider in the historic significance of his accomplishment.
But by the time he gets down to business at the White House later in the day, the future will be in focus as he and his fellow Democrats who control Congress ponder the economic package they hope will prevent an outright collapse.
Nobody is sure exactly what the final bill will look like, and more importantly whether it will work.
"The recovery package ... really causes great excitement for us," House Speaker Nancy Pelosi told reporters on Thursday when she unveiled the legislation and spoke of the need to "turn the economy around for working families."
One of her top lieutenants, House Appropriations Committee Chairman David Obey, called it "the largest effort by any legislative body on the planet ... to prevent an economic catastrophe."
Beyond helping to stop the hemorrhage of jobs and put the economy back on a growth track, the stimulus bill has much deeper implications for Obama's presidency and for Democrats in Congress who will be seeking reelection in 2010.
Without a healthier economy, Obama will have a harder time finding the revenues he will need to enact costly campaign promises.
Those include covering millions of Americans who now have no health insurance, tackling global warming by encouraging alternative energy production, rebuilding a military frayed by more than seven years of war and sinking money into crumbling facilities at home, such as aging schools, roads and bridges.
Washington's bid to fix the largest economy in the world has global implications as well.
"The world is really watching the stimulus (legislation in Congress). The hopes are this will restore U.S. demand for goods, which has driven a lot of the international economy over the last decade," said Steven Schrage, an international business and finance specialist at the Center for Strategic and International Studies in Washington.
TRADE-OFFS AND SACRIFICES
Schrage warned of "a real danger" that U.S. politicians could succumb to temptations and use economic stimulus to prop up domestic industries, prompting other countries to do the same and triggering the equivalent of a trade war.
Between now and mid-February, when Congress hopes to pass the economic stimulus bill, Obama could be facing fights closer to home -- from Republicans and even some of his fellow Democrats in Congress.
Obama has said he wants the economic stimulus bill to pass quickly and with a strong bipartisan vote.
"The only way to get it done in time is if you put together a significant bipartisan majority," said one Senate Democratic leadership aide. "If the bill gets too partisan, it will get bogged down here with one procedural roadblock after another."
Avoiding that problem could mean including some provisions that Democrats might not want to swallow, especially given their big win in last November's national elections.
For example, Republicans in Congress don't like the fact that in recent weeks, the tilt on the stimulus bill has been toward spending and away from tax cuts.
"With every step away from tax relief (for individuals and businesses) comes a step toward losing Republican support," said one senior Senate Republican aide.
But Republicans know they must tread lightly, not wanting to be seen standing in the way of economic recovery.
From the other end of the political spectrum, many Democrats want even more government spending than Obama and congressional leaders propose.
"The stimulus should be aimed at regions with double-digit unemployment and (families) with the lowest per capita incomes," said Rep. Marcy Kaptur, whose Toledo, Ohio district suffers a jobless rate that is heading toward 10 percent.
For Kaptur, a member of the House Appropriations Committee, the stimulus bill might not have to have "22nd century stuff" that Obama likes to talk about such as promoting "green jobs." Instead, she's looking for money to hire workers to fill potholes in streets, clean up parks and let cash-strapped cities and towns get garbage collections back on track.
Once the fighting over the specific contents of the stimulus bill ends, Obama and his fellow Democrats will have another worry. Will it do the job? Or, will it fall way short, like the $168 billion stimulus measure enacted a year ago.
House Appropriations Chairman Obey for one frets that even at a whopping $825 billion, this bill is an "undershoot." (Editing by Eric Walsh)