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Obama cites recession fears

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WASHINGTON -- Raising the most dire alarm yet, the Obama administration warned fellow Democrats on Wednesday that if they defeat the big tax-cut compromise detested by many liberals, they could jolt the nation back into recession.

President Barack Obama appealed anew for Congress to "get this done," and insisted that more congressional Democrats would climb aboard as they studied details of the $900 billion year-end measure.

Several did announce support on Wednesday, but at least one said there still was "a mood to resist."

One Democratic opponent, Rep. Barney Frank of Massachusetts, forecast a result that would abruptly reverse Congress' voting pattern of the first two years of Obama's term. "It will be passed by virtually all the Republicans and a minority of Democrats," he said.

Larry Summers, Obama's chief economic adviser, said that if the measure isn't passed soon, it will "materially increase the risk the economy would stall out and we would have a double-dip" recession. That put the White House in the unusual position of warning its own party's lawmakers that they could be to blame for calamitous consequences if they go against the president.

With many House and Senate Republicans signaling their approval of the tax cut plan, the White House's comments were aimed mainly at House Democrats who feel Obama went too far in yielding to Republicans' demands for continued income tax cuts and lower estate taxes for the wealthy.

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Obama said the compromise was necessary because Republicans were prepared to let everyone's taxes rise and to block the extension of unemployment benefits for jobless Americans if they didn't get much of what they wanted.

Economists said the recent recession officially ended in June 2009. But with unemployment at 9.8 percent, millions remain out of work or fearful of losing ground economically, and the notion of the nation falling back into a recession would strike many as chilling. It also could rattle markets and investors.

The deal Obama crafted with Senate Republican leaders would prevent the scheduled Dec. 31 expiration of all the Bush administration's tax cuts enacted in 2001 and 2003, even though Obama often had promised to end the cuts for the highest earners.

Summers' remarks contrasted with Obama's comments at a news conference Tuesday. "We don't have the danger of a double-dip recession," the president said then, noting the impact of the 2009 stimulus bill and other measures meant to steady the economy.

Obama again urged unhappy Democrats to swallow the compromise, and denied that he went overboard to appease Republicans. "I think it is inaccurate to characterize Democrats, writ large, as quote-unquote betrayed," he said Wednesday.

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