WASHINGTON – President Barack Obama proposed war spending Thursday that nears $11 billion a month for the next year and a half despite the planned drawdown of U.S. forces in Iraq.

The Obama administration wants to spend about $75 billion on the wars in Iraq and Afghanistan through next fall, costs that were largely set by the previous Bush administration. On top of that the budget proposal released Thursday asks Congress for $130 billion for next year.

It’s not clear yet whether Obama’s promise to bring combat troops home from Iraq will carry a cost savings in the near term.

The United States has been spending some $11 billion to $12 billion per month fighting two wars.

“The president is working with his military commanders to increase the number of troops in Afghanistan while responsibly removing combat forces from Iraq,” the White House budget summary said, but details of military spending were not included.

Obama has said he will no longer hide the full costs of the war, as he accused his predecessor of doing, and he did include a special category for war spending in material released to support his budget request for next year.

In years past, the Bush administration separated its spending for things like weapons and military pay from the cost of the wars. It was something of an accounting trick that some Democrats grumbled made it hard to compute the true costs of the unpopular war in Iraq.

Obama’s budget summary doesn’t list the projected costs for each war individually, and a defense official said the $130 billion war request also includes some costs for other overseas spending such as military help in Pakistan.

And as in years past, the figure for what Obama now calls “overseas contingency operations” doesn’t give the complete picture of war spending. Like the old separate war requests under the Bush administration, the Obama category omits military pay, health care and other costs.

Those costs are part of the nearly $534 billion Obama wants for regular Pentagon operations next year.

Altogether, Obama is asking for $739 billion for the military through the fall of 2010.

WASHINGTON – President Barack Obama promised quick help for strapped Medicaid programs Monday as he brought in advisers and adversaries to discuss keeping entitlement programs from exploding the federal deficit.

Obama’s summit at the White House, which was coming at close of a three-day meeting of the nation’s governors, was the first such forum of his young presidency designed specifically to get at problems threatening the long-term fiscal health of the nation. It came as Obama gets ready to disclose ambitious plans to slash the federal deficit in half within four years.

Even before it began, some of its 130 invited White House conference participants cautioned against overinflated expectations.

“It can either be a nice press event. Or it can be a substantive event,” said Republican Sen. Judd Gregg, whom Obama appointed as commerce secretary before the New Hampshire lawmaker balked. “History tells us it will be the first. We’ve had these meetings before. There’s always a lot of people willing to point out the problem.”

Yet, he said, there is seldom anyone willing to make the difficult decisions to solve those problems.

As the nation’s economy continues its downward spiral, Obama’s advisers are keeping their focus on the broader fiscal troubles that have sent millions to unemployment rolls. Taken in context, the summit is but one part of the White House’s larger approach to the coming weeks focused on Obama’s priorities for a first term, including a State of the Union-style address on Tuesday.

That speech is not likely to include plans to deal with long-crumbling entitlement programs.

Obama’s first order of business on the domestic front Monday was his East Room talk to the governors about the stimulus program – and an unmistakable warning to critics of the $787 billion plan.

Obama revealed that his administration will release $15 billion Wednesday to help governors meet Medicaid payments to poor Americans. And he took the opportunity, as well, to address concerns about the stimulus plan raised by a handful of Republican governors who have called the plan overly large and wasteful.

At issue is a proposed expansion of state unemployment benefits for part-time workers and others who where previously ineligible to receive the funding. Some GOP governors – several with an eye on the 2012 presidential contest including Mark Sanford of South Carolina and Bobby Jindal of Louisiana – say they may not accept that funding because it will require a tax increase on employers once the stimulus money runs out.

Obama addressed that critique directly, and warned against allowing political considerations to cloud a discussion of the stimulus program.

“I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance. What hasn’t been noted is that that is $7 billion of a $787 billion program. And it’s not even the majority of the expansion of unemployment insurance,” Obama said.

He added, “If we agree on 90 percent of this stuff, and we’re spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing, and somehow it’s being characterized in broad brush as wasteful spending, that starts sounding more like politics. And that’s what right now we don’t have time to do.”

On the larger question of burgeoning deficits, Senate Republican Leader Mitch McConnell of Kentucky said that a solution exists in legislation written by Gregg and his Democratic counterpart on the Budget Committee, Sen. Kent Conrad of North Dakota.

Their measure would create a bipartisan commission to deal with Social Security, Medicare and Medicaid. The entitlement programs face eventual bankruptcy, although experts differ on how urgently each is threatened.

Many House Democrats, however, remain opposed to a commission, including Speaker Nancy Pelosi, who believes any changes should be addressed through congressional committees. Obama has been open to the idea – and many others – as a way to move toward a viable solution.

McConnell said any movement would be a step toward getting a handle on the unfunded liabilities.

Obama plans to cut the federal deficit in half by the end of his first term, mostly by scaling back Iraq war spending, raising taxes on the wealthiest and streamlining government. The goal is to halve the federal deficit to $533 billion by the time his first term ends in 2013.

He inherited a deficit of about $1.3 trillion from his predecessor, President George W. Bush.

MESA, Ariz. – President Barack Obama threw a $75 billion lifeline to millions of Americans on the brink of foreclosure Wednesday, declaring an urgent need for drastic action – not only to save their homes but to keep the housing crisis “from wreaking even greater havoc” on the broader national economy.

The lending plan, a full $25 billion bigger than the administration had been suggesting, aims to prevent as many as 9 million homeowners from being evicted and to stabilize housing markets that are at the center of the ever-worsening U.S. recession.

Government support pledged to mortgage giants Fannie Mae and Freddie Mac is being doubled as well, to $400 billion, as part of an effort to encourage them to refinance loans that are “under water” – those in which homes’ market values have sunk below the amount the owners still owe.

“All of us are paying a price for this home mortgage crisis, and all of us will pay an even steeper price if we allow this crisis to continue to deepen,” Obama said.

The new president, focusing closely on the economy, in his first month in office, rolled out the housing program one day after he was in Denver to sign his $787 billion emergency stimulus plan to
revive the rest of the economy. And his administration is just now going over fresh requests for multiple billions in bailout cash from ailing automakers.

Wall Street has shown little confidence in the new steps, declining sharply on Tuesday before leveling off after Wednesday’s announcement. The Dow Jones industrials rose 3 points for the day.

Success of the foreclosure rescue is far from certain.

The administration is loosening refinancing restrictions for many borrowers and providing incentives for lenders in hopes that the two sides will work together to modify loans. But no one is required to participate.  The biggest players in the mortgage industry temporarily had halted foreclosures in advance of Obama’s plan.

Complicating matters, investors in complex mortgage-linked securities, who make money based on interest payments, could still balk, especially those who hold second mortgages or home equity loans. Their approval would be needed to prevent many foreclosures.

“The obstacles have not gone away,” said Bert Ely, a banking industry consultant in Alexandria, Va.

Another cautionary note came from John Courson, chief executive of the Mortgage Bankers Association.

“It seems to offer little help to borrowers whose loan exceeds their property value by more than 5 percent,” he said, noting that that requirement would limit the plan’s success in some of the hardest-hit areas in California, Florida, Nevada and Arizona and parts of the East Coast.

Indeed, Obama himself said, “This plan will not save every home.”

The goal is to lower many endangered homeowners’ payments to no more than 31 percent of their income. But that depends on a high degree of cooperation by lenders who have been increasingly wary of new lending as the crisis has deepened.

Still, the Obama administration, after talking with mortgage investors, appears confident that it is providing the right mix of incentives and penalties to make sure mortgage companies take part. Obama said he backs legislation in Congress to allow bankruptcy judges to modify the terms of primary home loans – an idea ardently opposed by the lending industry.

“Taken together, the provisions of this plan will help us end this crisis and preserve, for millions of families, their stake in the American Dream,” Obama said. Yet, he also added: “We must also acknowledge the limits of this plan.”

He called on lenders, borrowers and the government “to step back and take responsibility” and said: “All of us must learn to live within our means again.”

There’s broad economic anxiety across the nation, an Associated Press-Gfk poll indicated.

Nearly three in four people say they know someone who has lost a job in the past six months as a result of the tough economic conditions, according to the poll, released Wednesday. And more than half say they worry about being able to pay their bills and about seeing their retirement investments decline. So far, Obama’s job approval rating still is high, at 67 percent, and he is scoring strong marks for his handling of the economy.

The president unveiled his housing plan at a Phoenix-area high school in a state with one of the country’s biggest foreclosure rates.

Nationally, Moody’s Economy.com says that of the nearly 52 million U.S. homeowners with mortgages, about 13.8 million, or nearly 27 percent, owe more than their homes are worth after many months of declining prices.

How soon will the new plan show results?

“You’ll start to see the effects quite quickly,” Treasury Secretary Timothy Geithner told reporters in Phoenix, noting that rules governing the changes will be published March 4.

In theory, homeowners facing foreclosure or borrowers owing more on their homes than their mortgages are worth would have more opportunities to refinance their loans so that they have lower monthly payments. Lenders would voluntarily participate in the government programs.

The $75 billion Homeowner Stability Initiative would provide incentives to mortgage lenders to cut monthly payments in an effort to persuade them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, using money from the $700 billion financial industry bailout passed by Congress last fall.

Another part would specifically help people with dwellings whose market value has sunk below the principal still owed on the mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 million to 5 million families do just that – if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.

To boost confidence, the Treasury Department said it would double its support to the two mortgage giants that the government essentially took over last fall.

It said it would absorb up to $200 billion in losses at each company by using money Congress set aside last year and will continue purchasing mortgage-backed securities from them. Fannie Mae and Freddie Mac are projected to need a combined government subsidy of about $66 billion, well short of the new promise of up to $400 billion.

Obama emphasized that his plan focuses on helping families who have “played by the rules” stay in their homes.

But, he said, it will do nothing to help “the unscrupulous orirresponsible.” He cited so-called speculators who took out risky loans on multiple properties to make money by selling them during the housing boom, lenders who took advantage of naive buyers by glossing over the fine print, and people who willingly bought homes that were way beyond their means.

“This plan will not save every home,” Obama said.

WASHINGTON  – Senate Majority Leader Harry Reid said Friday that Congress is nearly finished with a massive, $790 billion economic stimulus plan giving President Barack Obama a big victory, but not everything he wanted.

The Nevada Democrat said as debate resumed that the Senate would likely vote on the package of spending and tax cuts later in the day and that both the Senate and House would do the work necessary to quickly get the emergency legislation to Obama’s desk.

Obama said the heart of the emerging plan is “to create jobs.”

“Not just any jobs, but jobs doing the work America needs done: repairing our infrastructure, modernizing our schools and hospitals, and promoting the clean, alternative energy sources that will help us finally declare independence from foreign oil,” the president said.

The 1,071 page bill, eight inches thick, bill was posted on an overburdened congressional Web site late Thursday, giving lawmakers just a few overnight hours to read it before debate resumed in both the House and Senate Friday morning. Just on Tuesday, the House voted unanimously to recommend that lawmakers and the public have at least 48 hours to read the legislation before a vote.

Rep. James Oberstar, D-Minn., chairman of the Transportation and Infrastructure panel, said that just the $64 billion in key transportation investments and other infrastructure programs under his panel’s jursidiction would “create or sustain 1.8 million jobs. Real jobs, construction jobs ….They’ll get a day’s wage and pay taxes on it.”

“Right now, we have a once in a generation chance to act boldly, to turn adversity into opportunity, and use this crisis as a chance to transform our economy for the 21st century,” Obama had said Thursday. “That is the driving purpose of the recovery and reinvestment plan.”

The plan is the signature initiative of the fledgling Obama administration, which is betting that combining tax cuts of just a few dollars a week for most workers with an infusion of hundreds of billions of dollars of government spending over the next few years will arrest the economy’s fall.

But the inclusion of a $70 billion tax break to make sure middle- to upper-income taxpayers won’t get hit by the alternative minimum tax forced a reduction of Obama’s signature tax break for 95 percent of workers.

Republicans pointed out a bevy of questionable spending items that made the final cut in House-Senate negotiations, including money to replace computers at federal agencies, inspect canals, and issue coupons for convertor boxes to help people watch TV when the changeover to digital signals occurs this summer.

“This measure is not bipartisan. It contains much that is not stimulative,” said Sen. John McCain, R-Ariz., Obama’s rival for the White House. “And is nothing short – nothing short – of generational theft” since it burdens future generations with so much debt, he added.

Larry Summers, a former Clinton administration Treasury secretary and now head of Obama’s White House-based economics council, was asked Friday how far the bill will go toward reviving the economy.

“It is the biggest fiscal expansion in our country’s history,” he replied in an appearance on NBC’s “Today” show.

But Summers cautioned against raising expectations too high.

“I think this is a key part of what’s gong to be a multipart strategy to contain this decline,” he said. But Summers added that the problems “weren’t made in a week, a month, a year. It’s going to take time to fix.”

He said it should not be considered a “silver bullet,” or panacea for deeply rooted business woes.

“We don’t have a viable alternative,” he said. “We’re going to have starts and stops.”

Much of the spending won’t be delivered this year or even next, and Republicans pointed to studies by the Congressional Budget Office that say that adding so much to the national debt would cost the economy by the end of the decade.

The $790 billion plan combines $286 billion in tax cuts with $311 billion in programs funded by the appropriations committees and about $193 billion in spending for benefit programs such as unemployment assistance, $250 payments or millions of people receiving Social Security benefits, and extra money for states to help with the Medicaid health program for the poor and disabled.

Obama’s “Making Work Pay” tax cut would be scaled back from $500 for most workers to $400, with couples getting $800 instead of $1,000.

Republicans, lined up to vote against the bill, piled on the scorn. “This is not the smart approach,” said Sen. Mitch McConnell of Kentucky, the Republican leader. “The taxpayers of today and tomorrow will be left to clean up the mess.”

It was clear that the measure was the result of old-fashioned sausage-making. Pet provisions were coming to light that had not been included in the original bills that passed the House or Senate – or that differed markedly from earlier versions. Some appeared to brush up against claims of the bill’s supporters that no pet projects known as “earmarks” were included.

One last-minute addition was a $3.2 billion tax break for General Motors Corp. that would allow the ailing auto giant to use current losses to claim refunds for taxes paid when times were good. GM got a $13.4 billion federal bailout late last year – and is expected to receive more in 2009 – and argued that without the provision, its government-financed turnaround plan could force the company to pay higher taxes.

Then there was $8 billion for high-speed rail projects, a priority for both Obama and Reid, who’s up for re-election and is a GOP target. While not explicitly named, a Los Angeles to Las Vegas rail project that Reid’s been backing for years stands to win funding as does a project in Obama’s home state of Illinois.