WASHINGTON - PRESIDENT-ELECT Barack Obama has said the struggling United States economy could face more challenges, and urged lawmakers to act quickly on recovery proposals even as some Republicans expressed concerns about plans for a huge stimulus package.

'As we mark the beginning of a new year, we also know that America faces great and growing challenges - challenges that threaten our nation's economy and our dreams for the future,' Mr Obama said in his weekly radio and Internet address.

Both Mr Obama and Vice-President-elect Joe Biden will huddle with Democratic and Republican congressional leaders tomorrow to try to advance a huge economic stimulus Bill, which may include a 'buy American' provision.

Mr Obama said economists agreed that if the US does not act 'swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment and the American dream slipping further and further out of reach'.

Mr Obama gave few details of the plan, which has yet to be released by his transition team but has been estimated to cost between US$675 billion to US$775 billion (S$987 billion to S$1.1 trillion).

He said its No. 1 priority was to create three million jobs - more than 80 per cent of them in the private sector.

Mr Obama said the recovery plan should include strategic investments that would serve as a 'down payment' on America's long-term economic future. In addition, as part of the plan, the government must demand strict accountability and oversight, and also must ensure the deficit be reduced as the economy recovers.

Democrats, who have a majority in Congress, want the economic stimulus to include tax relief for the middle class and spending on schools, roads and other infrastructure.

States, which are increasingly having difficulties paying health-care costs for the poor, would also get federal money.

One element of the plan could be a 'buy American' provision benefiting the US industry.

'We are reviewing the buy American proposal and we are committed to a plan that will save or create three million jobs, including jobs in manufacturing,' said Ms Jen Psaki, a spokesman for Mr Obama's transition team.

The stimulus package must pass Congress, and Representative Chris Van Hollen, the Maryland Democrat who is a liaison between Congress and Mr Obama's transition team, said 'we obviously want to focus our investments in areas where American industry will benefit'.

The New York Times has reported that US steelmakers are counting on government spending to make up for sagging demand from automakers and other industries.

But Republicans on Capitol Hill have been warning that the economic recovery package should not spend too much on government-funded projects and should not be rushed through Congress without adequate review.

Democrats had hoped to deliver the plan to Mr Obama when he takes office on Jan 20, or shortly thereafter.

Reuters, Bloomberg