Feb. 4 (Bloomberg) -- President Barack Obama prodded lawmakers to complete work on a $900 billion economic stimulus package as Senate Democratic leaders faced calls from their own party and from Republicans for changes to the measure.

“Let’s not make the perfect the enemy of the essential,” Obama said while acknowledging criticisms of the plan. “A failure to act and to act now will turn crisis into catastrophe and guarantee a longer recession.”

He took issue with Republican complaints that the plan doesn’t include enough tax cuts and has too many long-term initiatives that won’t quickly boost the economy.

“These criticisms echo the very same failed economic theories that led us into this crisis in the first place -- the notion that tax cuts alone will solve all our problems, that we can ignore fundamental challenges like energy independence,” Obama said. “I reject those theories -- and so did the American people when they went to the polls in November and voted resoundingly for change.”

His comment came as the administration announced plans to require some financial companies that get government aid to cap future compensation of top officials at $500,000 a year.

Senate Majority Leader Harry Reid, a Nevada Democrat, has said he wants the chamber to produce its version of the stimulus plan by the end of this week. Democratic leaders aim to reconcile competing Senate and House proposals and get a final bill to Obama’s desk next week.

‘Very Amenable’

Senator Olympia Snowe, a Maine Republican whose vote may prove critical to passing the stimulus, said she met today with Obama to discuss possible cuts worth “upwards to $100 billion.” She said she gave Obama a list of items she’d like to see dropped from the plan and that he was “very amenable” to the suggestions. Among the items she criticized: plans to spend $6 billion renovating federal buildings.

“He’s prepared to be receptive to the ideas and to re- evaluating some of the spending measures,” Snowe said after the meeting. “We really do need to remove those items that have nothing to do with the purpose of jump-starting the economy.”

Lawmakers are proposing a number of other changes. Senator Ron Wyden, an Oregon Democrat, said today he and Snowe will offer an amendment requiring financial institutions that take money from the government’s Troubled Asset Relief Program to repay the cash portion of bonuses topping $100,000 that were paid to employees for work last year.

“It’s not enough to say these bonuses are wrong -- they must be paid back,” Wyden said.

Tax Credit for Homebuyers

Senator Johnny Isakson, a Georgia Republican, is offering an amendment that would spend $18 billion to provide homebuyers with a tax credit worth $15,000 or 10 percent of a home’s purchase price, whichever is less. Senator Patty Murray, a Washington Democrat, said she plans to revive an amendment blocked yesterday that would have boosted infrastructure spending by $25 billion.

Senators also will vote on an amendment sponsored by North Dakota Democrat Byron Dorgan to ensure that “Buy American” language in the bill wouldn’t violate international trade agreements.

Alan Blinder, a former vice chairman of the Federal Reserve who is now a Princeton economics professor, seconded Obama’s calls, urging lawmakers to complete work on the plan. “It would be an act of extreme stupidity not to enact a big stimulus,” he said in a conference call with reporters.

Auto Industry

Lawmakers voted yesterday to aid the auto industry, approving a $11 billion plan to give new car and truck buyers a tax break on sales taxes and interest payments on car loans. Another amendment provided a $6 billion increase for medical research at the National Institutes of Health. The provisions made the bill’s total cost about $900 billion.

Obama, Treasury Secretary Tim Geithner, budget director Peter Orszag and other administration officials met privately with Senate Democrats.

Afterward, Senator Kent Conrad, a North Dakota Democrat, said the president “was very serious about what we confront in the economy” and that “we are not out of the woods.”

Geithner also met with House Democratic leaders and told reporters afterward Obama’s administration wants to work with Congress to gain public confidence in efforts to rein in the economic crisis.

“It was really helpful for me to hear from them directly on how hard this is going to be,” the Treasury secretary said.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

Last Updated: February 4, 2009 17:42 EST