Obama Warns of 'Catastrophe' Without Stimulus, Seeks Compromise

WASHINGTON -- President Obama urged senators Wednesday to forge a bipartisan compromise on his economic stimulus plan to ensure its passage after warning the financial crisis will turn into a "catastrophe" if the measure isn't approved quickly.

In his meeting with senators at the White House, Obama made it clear that he is open to amendments that will take some of the "fat" out of the measure, which breached the $900 billion barrier in the Senate on Tuesday and appears to be ballooning.

"No plan is perfect, and we should work to make it stronger," Obama said. "Let's not make the perfect the enemy of the essential. Let's show people all over our country who are looking for leadership in this difficult time that we are equal to the task."

Republican Senators Susan Collins and Olympia Snowe of Maine, as well as Democratic Senator Ben Nelson of Nebraska, have tentatively agreed to cutting more than $50 billion from the bill, a Nelson spokesman said, though details weren't available.

Their effort is central to building at least some bipartisan support for the bill, which has come under increasing attack for too much spending unrelated to jolting the economy right away.

After the meeting with the president, Sen. Claire McCaskill, D-Mo.,  told FOX News the session was a "bucket of cold water" for the Democratic caucus and vowed to go "on offense" and fight for the plan, given the poor state of the economy.

She attacked opponents who are picking on the "little things" in the bill for not looking at the big picture. But she added that lawmakers will try their best to remove some of the spending provisions in the bill that have drawn scorn.

Sen. Mary Landrieu, D-La., expressed hope that wasteful spending can be stripped out of the bill. But Sen. Christopher Dodd, D-Conn., defended the current proposal, saying they shouldn't be pulling out provisions willy-nilly.

Sen. Jim DeMint, R-S.C., echoing other critics, said the package is too expensive and not stimulative enough.

"This is not a stimulus plan," he said on the Senate floor Wednesday. "It's a mugging."

If the stimulus package were a country, he said, it would be the ninth largest economy in the world.

White House spokesman Robert Gibbs said Obama's warning of economic catastrophe reflected the urgent need to act now.

"The threat of what you hear and see is we have to have a stimulus package that meets the size and the scope of the challenges that this economy faces," he said Wednesday. "To do less will result in further job losses than what we're experiencing now."

The cost of the plan topped $900 billion after the Senate on Tuesday added money for medical research and tax breaks for car purchases. An effort to add $25 billion more for infrastructure projects -- which narrowly failed to advance -- is likely to be revived.

The cost could go even higher if a tax break for homebuyers is made more generous.

Sen. Johnny Isakson, R-Ga., is pressing for a tax credit of up to $15,000 for everyone who buys a home this year, at a cost of about $20 billion. The pending measure would award a $7,500 tax credit only to first-time homebuyers.

Taken together, the developments prompted a scolding from the Senate's top Republican.

"At some point, we're going to have to learn to say no," said Sen. Mitch McConnell of Kentucky. "If we're going to help the economy, we need to get a hold of this bill. And making it bigger isn't the answer."

The president rejected some criticisms of the plan: that tax cuts alone would solve the problem, or that longer-term goals such as energy independence and health care reform should wait until afterward.

In remarks at the White House, Obama argued that recalcitrant lawmakers need to get behind his approach, saying the American people embraced his ideas when they elected him president in November.

But Republicans have focused the debate on questionable spending in the bill, pushing down its popularity with complaints about items such as money to combat sexually transmitted diseases, fix problems with the Census and combat the flu.

Some Democrats are griping as well. Rep. Jim Cooper, D-Tenn., a big critic of the measure, told a Nashville radio station that he "got some quiet encouragement from the Obama folks for what I'm doing.... They know its a messy bill and they wanted a clean bill."

Obama has sought each day to ratchet up the pressure on lawmakers, bringing different supportive groups to the White House, scheduling a series of TV interviews, even traveling to a charter school to tout one portion of the bill.

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future," Obama said in his prepared remarks.

Republicans are expected to seek a vote later in the week on a plan to inject the government into the mortgage industry in an attempt to drive down interest rates on mortgages to as low as 4 percent. Democrats treaded carefully on the proposal, saying they would consider it but also claiming the $300 billion Republicans allocated would not come close to accommodating the demand.

FOX News' Mosheh Oinounou and the Associated Press contributed to this report.