WRAPUP 3-Obama seeks swift passage of U.S. fiscal package

*Obama says country "in a very difficult spot"

*Republicans like significant tax cuts in stimulus

*Former Clinton chief of staff Panetta named for CIA

*Obama sees stimulus package by early February

By David Alexander and Richard Cowan

WASHINGTON, Jan 5 (Reuters) - With the economic outlook darkening, U.S. President-elect Democrat Barack Obama went to Congress two weeks before taking office to try to entice Republican support for a massive stimulus package with talk of big tax cuts.

"We are in a very difficult spot," Obama told reporters as he huddled with economic advisers and shuttled between meetings with Democrats and Republicans in the House of Representatives and Senate. "The situation is getting worse."

Although Obama acknowledged the big economic stimulus bill -- now put at as much as $775 billion over two years -- will not be waiting on his desk when he takes office on Jan. 20 as he had wanted, some key Republicans were moving to his side.

"I think there will be widespread Republican enthusiasm for having a significant percentage of the package be tax relief," Senate Republican leader Mitch McConnell said after meeting with Obama.

"We'll be interested to see not only the size of the tax package but how it's crafted," he said. As Obama proposed during the campaign, workers would get a $500 payroll tax credit and businesses would receive tax breaks to create jobs, part of what a senior Democratic aide said could be $300 billion in tax cuts.

Even with the tax cuts, Republicans, who are in the minority in both chambers, emphasized their concerns about the size, which they fretted could top $1 trillion.

"While we want to get the economy moving again, the overall size and how we craft this is going to be important," said House Minority Leader John Boehner.

One Democratic House leadership aide said the goal is to pass a stimulus bill by the end of January, giving the Senate time to debate a measure that Obama could sign into law by the start of the next congressional recess on Feb. 13.

"We anticipate that by the end of January or the first week in February we have gotten the bulk of this done," Obama said.

During his first visit to the U.S. Capitol since he was elected on Nov. 4, Obama met with House Speaker Nancy Pelosi, a California Democrat, and said new jobs data this week would likely be "sobering" and underscore the need for action.

The current U.S. recession began in December 2007 and, according to a Reuters poll, economists are expecting Labor Department data on Friday to show payroll jobs dropping by 500,000, bringing job losses for 2008 to about 2.5 million.

Obama takes office with the legislative numbers well on his side. The November elections gave Democrats a wider House majority and, if two disputed Senate races go to Democrats, the largest majority in that chamber in 30 years, 59 of 100, nearly enough to block Republican procedural roadblocks.

Separately, Obama moved to fill another big job in his administration, selecting former Clinton administration chief of staff Leon Panetta to head the CIA, according to Democratic officials.

The president-elect's fundraising prowess was highlighted again in a new donor report that showed Obama -- who drew a record-shattering $639 million during his presidential campaign -- on track to raise $12 million to cover transition costs.

ECONOMIC RESCUE

But it was the push to rescue the economy that was the focus of Washington's attention.

An Obama aide said that later this week, possibly on Thursday, Obama is expected to give a speech to stress the urgency of the crisis and what is needed to respond to it, warning that the jobless rate was at risk of rising to 10 percent if action is not taken.

While some Democratic aides said Obama was seeking an economic stimulus bill totaling $775 billion over two years, House Appropriations Committee Chairman David Obey insisted there were no final decisions.

In an interview with Reuters, the Wisconsin Democrat said, "I certainly don't regard any number as settled." He added, "My fear at this point is that this package is going to be far smaller than it needs to be" to create enough jobs to turn the economy around.

Sixty percent of Obama's plan would go to spending on such basics as roads, bridges, education and health care, with the remaining 40 percent, to woo Republican support, in tax cuts for the middle class and businesses, party aides said.

Republicans -- who have objected to recent government moves to bail out the financial industry and U.S. automakers -- are raising concerns that elements of the Obama stimulus plan could grow into permanent expenditures instead of emergency relief.

But they are certain to face public pressure, in the wake of widespread repudiation of Republicans in the November elections, to find common ground with Obama and clear the way for quick passage of a stimulus package. (Additional reporting by Jeremy Pelofsky, Thomas Ferraro, Vicki Allen and Steve Holland; Editing by Jackie Frank)