Jan. 23 (Bloomberg) -- President Barack Obama pressed congressional leaders to reach a consensus on an $825 billion stimulus plan, warning the country may be facing an “unprecedented” economic crisis.

Obama said that, while there are “some differences” between his administration and lawmakers on the details, the legislation is “on target” for passage by mid-February.

“We are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with,” Obama said as he began a meeting with nine Democratic and Republican leaders at the White House, his first such session with lawmakers since taking office. He also called for greater oversight of spending by financial institutions that get bailout money.

Each day brings “greater focus on the problems that we’re having, not only in terms of job loss but also in terms of some of the instabilities in the financial system,” he said.

The new administration and Congress are confronted with a weakening economy and eroding investment values. Average home prices in November dropped 8.7 percent from a year earlier, the most in at least 18 years, the government said yesterday. Housing starts fell 16 percent last month, the number of Americans filing first-time claims for jobless benefits climbed to a 26-year high, and the Standard & Poor’s 500 Index has lost more than 9 percent since the start of the year.

Deadline

House Speaker Nancy Pelosi, who was among those in the meeting, said afterward that lawmakers expect to get the legislation to Obama’s desk before the Feb. 16 President’s Day holiday, when Congress is scheduled to take a break. “If not, there will be no recess,” the California Democrat said.

The legislation crafted by House Democrats includes $358 billion for public works projects, $192 billion in other spending and $275 billion worth of tax cuts. The Senate has begun work on part of its version of the stimulus plan, which includes $275 billion in tax provisions, including cuts for businesses and producers of renewable energy that differ from the House package.

Republicans, meanwhile, are seeking deeper tax cuts and expressing doubts that new federal spending for such items as roads and bridges can be pumped into the economy quickly enough to do any good. Some Democrats also are pressing to speed up infrastructure spending.

Still Differences

“I recognize there are still some differences around the table and between the administration and members of Congress,” Obama said, adding that both sides are unified in seeing the need to take action.

Senate Majority Leader Harry Reid, a Nevada Democrat, said there was “significant discussion” of a Congressional Budget Office analysis released earlier this week that most of the public-works spending in the stimulus plan won’t take place until sometime after 2010.

White House budget director Peter Orszag, in a letter to lawmakers, said the administration is “committed” to ensuring that “at least” 75 percent of the $825 billion economic stimulus package is spent by the end of the next fiscal year.

Republican leaders said they are pleased by the tone of the meeting and the willingness of Obama and the Democrats to listen to their ideas.

“I do think we’ll be able to meet the president’s deadline,” Senate Republican leader Mitch McConnell of Kentucky said after coming out of the White House.

Spending Package

House Republican leader John Boehner of Ohio said he remains concerned about the size of the spending portion of the stimulus plan and whether the money will be used wisely.

“At this point, we believe spending nearly $1 trillion is more than we need to be putting on the backs of our kids and their kids,” he said.

Obama, a Democrat, has scheduled a meeting with all House and Senate Republicans for next week.

Obama also criticized the way some companies getting federal bailouts are spending their money, and he said stricter accountability will be part of any future assistance.

Without citing any individual or company, Obama said recent reports “about companies that have received taxpayer assistance, and then going out and renovating bathrooms, or offices, or other ways not managing those dollars appropriately” show the need for more scrutiny.

John Thain, the former Merrill Lynch & Co. chief executive officer ousted yesterday, spent $1.2 million redecorating his downtown Manhattan office last year as the company was firing employees, a person familiar with the project said.

Government Aid

Thain oversaw the sale of Merrill Lynch to Bank of America Corp. last month. Merrill’s $15.4 billion fourth-quarter loss forced Bank of America to seek additional aid from the U.S. government, which last week agreed to provide $20 billion in capital and $118 billion in asset guarantees.

Obama said he wanted to have talks with congressional leaders, separate from the stimulus package, on “reform elements, oversight, transparency, accountability that’s going to be required in order for the American people to have confidence in what we’re doing.”

White House press secretary Robert Gibbs said the president’s economic advisers are working on proposals to reform the financial regulatory system and to ensure that money from the Troubled Asset Relief Program is spent with strict guidelines.

Those include directing more of the money goes to free up credit and help homeowners as well as assuring that “executive compensation is reined in” for companies that get aid from the TARP fund, Gibbs said.

‘Bonuses or Offices’

The administration wants to make sure that that “money doesn’t go into the bonuses or offices” for those who have to be bailed out, Gibbs said. He declined to comment on whether the government would try to recover money from companies.

The restrictions would follow principles already outlined to Congress by Lawrence Summers, director of the White House National Economic Council, and Timothy Geithner, Obama’s nominee for Treasury secretary, Gibbs said.

The Obama administration has been cleared by Congress to tap the second half of the $700 billion TARP fund to stabilize the financial system.

Summers told Congress in a Jan. 15 letter that up to $100 billion of the remaining funds will be used to ease the housing crisis. He also promised the administration would restrict executive pay and dividends for financial institutions that get the money. Geithner told lawmakers yesterday the administration has “no current plans” to request more financial bailout funds.

Later today Obama is scheduled to get his daily briefing from his economic advisers, led by Summers. He also holds an Oval Office meeting with Geithner, who is awaiting confirmation by the Senate.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

Last Updated: January 23, 2009 15:29 EST