WASHINGTON - US President-elect Barack Obama, describing America's economy as 'very sick', has launched a hard sell for his near US$800 billion (S$1.2 trillion) stimulus plan, warning the US economy would pay a dramatic price if the bill gets bogged down in Congress.

Mr Obama plunged into the political fray on his first day at work in Washington two weeks before his inauguration, after congressional power brokers on Sunday dashed hopes the rescue package could be ready as soon as he is sworn in.

US media reports say he is planning a stimulus package which includes $300 billion of tax cuts.

Mr Obama has said he wants a plan that will create three million jobs by 2011.

'The economy is very sick,' Mr Obama told reporters after meeting his economic advisors on Monday.

'We are in a very difficult spot, the economy is bad, the situation is getting worse. We have to act and act now to break the momentum of this recession or the next few years could be dramatically worse.'

'We've got to act boldly, and we've got to act swiftly. We cannot delay.'

The president-elect's aides meanwhile divulged details of the massive scope of the stimulus package, his opening political gambit when he takes office on January 20 during the worst global economic crisis for more than 70 years.

Mr Obama will propose tax cuts totalling $300 billion over two years, or around 40 per cent of a package that could top $775 billion, a transition source said on condition of anonymity.

The president-elect has already previewed a multi-billion-dollar program of public works programs, including highway and bridge repairs, renovating school classrooms and aid to cash-strapped states.

The plan is designed to create or preserve three million jobs over three years, includes tax and spending incentives for renewable energy production and provides extra healthcare benefits for needy Americans.

US citizens can expect immediate tax relief of around $500 for individuals and $1,000 for couples under the plan, and some businesses would be able to write off last year's losses against their tax return.

The magnitude of the tax cut is being seen as a bid for Republican support for the stimulus program, especially in the Senate where the opposition party has enough seats to block legislation.

But the transition source denied political motivations were at work behind the scenes, saying the makeup of the package was dictated by specific measures that would stimulate growth and create jobs.

'Sometimes good policy is just good policy,' the official said.

On Sunday, congressional leaders played down hopes the stimulus plan would be ready for Mr Obama's signature as soon as he is sworn in.

Democratic House leader Steny Hoyer said on Sunday the bill could pass through his chamber by the end of the month and clear the Senate by mid-February, but would not be ready on inauguration day.

'It's going to be difficult to get the package put together that quickly to have sufficient time to be reviewed, debated and passed,' Mr Hoyer told Fox News on Sunday.

Obama spokesman Robert Gibbs said Monday's meetings were designed to convey urgency about the economy and to seek bipartisan input from lawmakers.

'We've seen statistics, we've seen Christmas sales, consumer confidence and obviously upcoming job numbers which underscore that a very serious situation has only gotten worse and isn't likely to get better any time soon,' Mr Gibbs said.

But he agreed it was 'very unlikely' the stimulus package would be ready by January 20.

Mr Obama flew to Washington on Sunday, after the first bump in what has been a smooth transition when New Mexico Governor Bill Richardson withdrew his name from the Senate confirmation process for commerce secretary owing to an investigation into a financial company doing business with his state.

President George W. Bush has invited Mr Obama to a White House lunch on Wednesday, along with former presidents Bill Clinton, George H.W. Bush and Jimmy Carter.

Earlier on Monday, Mr Obama saw his daughters Malia and Sasha off from the family's luxury hotel before the girls' first day at the Sidwell Friends private school in Washington. -- AFP