WASHINGTON — President Obama yesterday promised to lower mortgage costs, offer job-creating loans for small businesses, get credit flowing and rein in free-spending executives as he readies a new road map for spending billions from the second installment of the financial rescue plan.

The White House is deciding how to structure the remaining half of the $700 billion that Congress approved last year to save financial institutions and lenders. An announcement was possible as early as this coming week on an approach that would use a range of tools to unfreeze credit, helping families and businesses.

At the end of a week that saw hundreds of thousands of people lose their jobs, Obama also used his Saturday radio and Internet address to tell the nation that "no one bill, no matter how comprehensive, can cure what ails our economy."

In the Republican Party's weekly radio address yesterday, Senate GOP Leader Mitch McConnell urged bipartisan cooperation.

He said Republicans will push to lower mortgage rates to 4 percent and cut the lowest tax rates when the Senate begins consideration of its economic stimulus plan tomorrow.

"Earlier this week, President Obama came to Capitol Hill to speak with members of my party about his plan for an economic recovery bill," McConnell said. "The president said that a stimulus package is needed to revive the nation's troubled economy, and to help the millions of Americans who've been affected by it. And Republicans in Congress agree."

During the final three months of 2008, the economy recorded its worst downhill slide in a quarter-century, stumbling backward at a 3.8 percent pace, the government reported Friday. It could get worse.

Treasury Secretary Timothy Geithner is trying to finish a plan to overhaul the bailout program begun in the Bush administration.

Geithner has said the administration is considering using a government-run "bad bank" to buy up financial institutions' bad assets. But some officials now say that option is gone because of potential costs.

Many ideas under consideration could end up costing hundreds of billions beyond the original price tag. Aides would not rule out the possibility that the administration would seek more than the $350 billion already set aside.

Obama said Geithner soon would announce a new strategy "for reviving our financial system that gets credit flowing to businesses and families. We'll help lower mortgage costs and extend loans to small businesses so they can create jobs. We'll ensure that CEOs are not draining funds that should be advancing our recovery."

He said his administration "will insist on unprecedented transparency, rigorous oversight and clear accountability so taxpayers know how their money is being spent and whether it is achieving results."

MESSAGE FOR AMERICA

Obama's message, largely repackaged from a week of White House statements, was as much for the country as it was for lawmakers: Pass the separate American Recovery and Reinvestment Plan or things are going to get worse.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., planned to discuss Obama's legislative agenda during a White House visit tomorrow night, an administration official said.

"Rarely in history has our country faced economic problems as devastating as this crisis," the president said. "Now is the time for those of us in Washington to live up to our responsibilities."

Obama last week won passage of a separate $825 billion economic stimulus plan in the House without a single Republican vote. It now heads to the Senate, where Vice President Joe Biden predicts the measure will fare better among GOP lawmakers.

Republicans pledged to work with Obama. But they cautioned against treating government spending like a "trillion-dollar Christmas list" and renewed their opposition to much in the bill.

"A problem that started on Wall Street is reaching deeper and deeper into Main Street. And the president is counting on members of Congress to come together in a spirit of bipartisanship to act," McConnell said in the GOP radio address. "Unfortunately, the plan that Democrats in Congress put forward this week falls far short of the president's vision for a bill that creates jobs and puts us on a path to long-term economic health."

Obama has signaled his willingness to compromise. His chief spokesman said the president hoped to "strengthen" the bill as it headed toward a Senate vote in the week ahead.

REPUBLICAN INPUT

Republicans said they hope the administration takes into account their wishes.

"Every day brings more news of layoffs, home foreclosures and shuttered businesses," McConnell said. "And across the country, employers are cutting to the bone even at businesses that most Americans never thought were vulnerable."

No cost estimates were available for the McConnell plan. Democrats, who will be crucial to its success since they control 58 Senate seats, have not ruled out backing such a plan, but wanted to see more details. The Senate version of the stimulus bill is now costing $889 billion, about $70 billion more than the one passed last week by the House. The increase is largely due to changes in tax breaks.

McConnell estimated yesterday that under his mortgage plan, the average family would see its monthly mortgage payment drop by $466 a month, or $5,600 a year. Over the life of a 30-year loan, that's a savings of $167,760.

His second idea would be to cut income tax rates.

Currently, according to GOP data, married couples pay a 10 percent tax on income up to $16,700.

Republicans would cut that rate to 5 percent, meaning a savings of about $500 per couple.

They would also reduce by 5 percentage points the 15 percent rate now levied on couples earning between $16,700 and $67,900, saving working couples another $1,100, according to Republican estimates.

Single filers would get similar reductions. Either way, everyone who works and pays income tax would see an immediate increase in pay, Republicans say.