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Chrysler LLC faces the most difficult, and important, week in its 84-year history as the automaker tries to close three difficult deals in order to avoid bankruptcy.

The automaker has until Thursday, April 30, to reach a deal on an alliance with Italian automaker Fiat, convince banks holding $7 billion of its secure debt to accept pennies on the dollar and win additional wage and pension concessions from its unions.

The challenge is that all three parties negotiating with Chrysler will want to see terms of the other deals before they agree to their own deal. That’s because Fiat, banks and the unions will all likely end up owning a stake in the troubled automaker. The value of those stakes depend upon how much equity each party receives, and what Chrysler’s chances of avoiding bankruptcy are.

Failure to reach a deal is likely to put the company on the path towards closure and the sale of its assets. The Treasury Department’s auto industry task force has declared that Chrysler is no longer viable as a stand-alone company and gave it only a month to reach a final deal with Fiat that would give the government enough confidence to extend Chrysler $6 billion more in loans.

Chrysler won’t comment directly on its negotiations and its chances to avoid bankruptcy. The company simply said in a statement that it is "committed to working closely with all constituents, the administration, U.S. Treasury and the Task Force to reach a successful conclusion."

But if deals with Fiat, banks and unions aren’t in place by the end of the month, the chances of Chrysler getting another federal lifeline are remote, leaving the company little choice but to begin a process of shutting down.

"We wouldn’t see it being lights out day one," said Robert Schulz, senior auto credit analyst with Standard & Poor’s. "But if it goes into bankruptcy, we wouldn’t expect a reorganization and emergence from bankruptcy. We expect them to be broken up, with some parts sold, some parts closed."

Other auto industry experts say they are becoming increasing pessimistic about Chrysler’s chance to reach the deals necessary and avoid bankruptcy.

Mike Jackson, CEO of AutoNation (AN, Fortune 500), the nation’s largest car dealer, told CNNMoney.com Thursday that he was no longer confident about Chrysler’s chance for survival.

In the past, Jackson was worried about a catastrophic hit to the economy if a major automaker went bankrupt, but he said that his conversations with the auto industry task force has convinced him that plans are now in place for an orderly shutdown at Chrysler. (Chrysler rival General Motors (GM, Fortune 500) still faces a May 30 government deadline to restructure or it too could be forced into bankruptcy.)

Independent auto consultant Erich Merkle said that when Treasury and President Obama announced the deadline for Chrysler back on March 30, he thought that there was a bit better than a 50-50 chance of avoiding bankruptcy. Now he puts the chance at no greater than 25%, and perhaps not that good.

"Then it seemed like an alliance with Fiat was imminent," he said. "But I don’t think that alliance is there any longer."

Fiat executives said Thursday morning that talks are continuing with Chrysler and the U.S. Treasury Department, and reiterated that even if there is a deal, Fiat would not make a cash investment in Chrysler or commit to covering Chrysler’s anticipated future losses instant payday loans completely online. Fiat reported its own quarterly loss Thursday.

The New York Times reported Thursday that a deal had been reached between Treasury and the United Auto Workers union that would give the company the cost cuts it needs while protecting the remaining pay and benefits of the U.S. autoworkers. That could pave the way for a bankruptcy filing.

The UAW had no immediate comment on the report.

In a statement, Chrysler said that the company believes "it’s important to keep all options open" and that Chrysler "will continue to work through the end of the month, based on the direction given by the Presidential Auto Task Force, to secure the support of the necessary stakeholders and reach a successful conclusion that the Administration and U.S. Treasury deems appropriate."

And an administration official said that "everything is speculation until there’s a deal" but added that "it should surprise no one that the administration is planning on contingencies."

"We remain focused on the goal and engaged with all stakeholders to bring Chrysler and Fiat to a working partnership," the official added.

One of the tougher parties to convince could be the nation’s major banks, such as JPMorgan Chase (JPM, Fortune 500) and Citigroup (C, Fortune 500), to accept only pennies on the debt they are now owed.

Numerous published reports suggest that Chrysler’s banks and the auto industry task force, which is involved in the negotiation on restructuring debt, are about $3 billion apart, with the banks demanding 65 cents on the dollar for the debt they hold, plus a 40% stake on the automaker. The auto task force is offering 22 cents on the dollar, plus a 5% stake.

University of Maryland Professor Peter Morici said the banks are smart to turn down the latest offer, even if it’s up from the earlier offer of 15 cents on the dollar. He said they can hope to capture far more than 22 cents once Chrysler’s assets, particularly its Jeep brand and some of its more efficient factories, are sold.

"I don’t’ know exactly what those assets are worth, but I know it’s a lot more than 22 cents," he said. "That’s why they’re being so tough."

S&P estimates that lenders are likely to see between 30 cents and 50 cents on their $7 billion in secure debt, if Chrysler does not get financing to continue to operate during bankruptcy. But if Chrysler files for bankruptcy and receives that funding from either the private sector or the government, the new loans could leave the current lenders with almost nothing to recover.

"We’d say it’s a high probability event that they don’t reach an agreement, but we won’t put at percentage on it," said Schulz. He said while there is still time left to reach all three deals, it’s becoming increasingly difficult to complete all of them in time.

"They all are complex, and two out of three won’t do it," he said.

CNNMoney.com senior writer Jennifer Liberto contributed to this report  

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Stocks gained Tuesday, rebounding after the previous session’s rally as worries about corporate results were countered by renewed hopes that the financial sector is closer to stabilizing.

After the close, Yahoo (YHOO, Fortune 500) reported lower quarterly sales and earnings that topped estimates. The Internet search bellwether also said it would cut 5% of its workforce.

The Dow Jones industrial average (INDU) gained 127 points, or 1.6%. The S&P 500 (SPX) index gained 18 points, or 2.1%. The Nasdaq composite (COMP) gained 36 points, or 2.2%.

Wednesday morning brings quarterly results from Dow components AT&T (T, Fortune 500), Boeing (BA, Fortune 500) and McDonald’s (MCD, Fortune 500).

Financial firms Wells Fargo (WFC, Fortune 500) and Morgan Stanley (MS, Fortune 500) are also due to report Wednesday.

Stocks tumbled Monday, retreating from a six-week run after Bank of America (BAC, Fortune 500) reported results that beat forecasts, but also warned about deteriorating credit quality. Despite better-than-expected results from JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and others, investors have been wary about bank results.

Those concerns continued to drag on stocks Tuesday morning. But the financial sector turned around in the afternoon, lifting the broader market, after Treasury Secretary Timothy Geithner defended Treasury’s Troubled Asset Relief Program (TARP) and other attempts to help stabilize the banking system. Geithner was speaking before a Congressional bailout oversight committee. (Full story)

Citigroup (C, Fortune 500) shares gained after the Dow component said at its annual meeting that it will pay back the government the $45 billion it received in taxpayer assistance.

The KBW Bank (BKX) index gained 8.1%.

Stocks rose for six straight weeks, propelling the S&P 500 by 29% as investors bet that the economy is closer to stabilizing. That same optimism is lifting stocks now, but will peter out if the economic and corporate news doesn’t start to improve, said Dean Barber, president at Barber Financial Group.

"This is a classic bear market rally," Barber said. "People want to say that the market is telegraphing that the recession will soon be over, but there isn’t anything fundamental that supports that."

He said that the rally is being driven partly by the vast amounts of cash sitting on the sidelines and the lack of appealing options, due to low-yielding money market accounts and short-term bond yields.

Market breadth Tuesday was positive. On the New York Stock Exchange, winners beat losers four to one on volume of almost 1.67 billion shares. On the Nasdaq, advancers topped decliners three to one on volume of 2.45 billion shares.

Results: After the close Monday, IBM (IBM, Fortune 500) reported higher earnings that beat estimates on weaker revenue that missed estimates paydayloans. The tech leader reiterated its goal of earnings of $9.20 per share in 2009 and said it is on track to meet its profit goal of $10 to $11 per share in 2010. Shares gained 2% Tuesday.

Also late Monday, Texas Instruments (TXN, Fortune 500) reported weaker quarterly sales and earnings that topped expectations. The chipmaker forecast first-quarter earnings per share above analysts’ forecasts. Shares lost 1% Tuesday.

On Tuesday, Dow components Caterpillar (CAT, Fortune 500), Merck (MRK, Fortune 500), DuPont (DD, Fortune 500), Coca-Cola (KO, Fortune 500) and United Technologies (UTX, Fortune 500) all reported results.

Caterpillar reported its first quarterly loss since 1992, due to charges related to recession-tied layoffs. The heavy equipment maker also cut its full-year earnings and sales forecast. Shares gained 3% after sliding in the morning.

Merck reported weaker quarterly sales and earnings that missed analysts’ forecasts, citing the global economic slowdown. The company also said its soon-to-be-completed purchase of Schering-Plough (SGP, Fortune 500) would help drive growth in the coming years. Merck shares fell 6.7%.

Separately, Schering-Plough reported higher-than-expected first-quarter earnings. Shares fell 4%.

DuPont reported weaker quarterly earnings that topped estimates on lower sales that missed forecasts. The chemical maker also cut its full-year 2009 earnings forecast and said it will take on most of its cost-cutting initiatives in the months ahead. Shares gained 4.9%.

Coca-Cola reported weaker quarterly earnings that met Wall Street’s forecasts. The world’s biggest soft-drink maker also reported lower quarterly revenue. Shares lost almost 3%.

United Technologies reported weaker quarterly earnings that met estimates on a drop in quarterly sales. However, the company said it expects to see profit growth in 2010, sending shares higher. Shares rose 4.8%.

Bonds: Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.89% from 2.83% Monday. Treasury prices and yields move in opposite directions.

Lending rates were mixed. The 3-month Libor rate was unchanged from 1.10% Monday, according to Bloomberg.com. The overnight Libor rate fell to 0.20% from 0.22% Monday. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets ended lower. Most European markets fell in afternoon trading.

In currency trading, the dollar fell versus the euro and gained against the yen.

U.S. light crude oil for May delivery gained 63 cents to settle at $43.51 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $4.80 to settle at $882.70 an ounce. 

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This earnings season, no company may have more on the line than Bank of America.

The last three months have been a painful time for the Charlotte, N.C.-based banking giant. There has been the never-ending string of headaches associated with last year’s fateful purchase of Merrill Lynch, including a bonus scandal that the company can’t seem to shake.

At the same time, there has been no shortage of criticism from shareholders about its stock price. Management has also been working hard to convince investors that last year’s purchase of mortgage lender Countrywide was a smart move.

Elevating the stakes even further is the fact that many of Bank of America’s peers, such as JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Goldman Sachs (GS, Fortune 500), have shattered profit expectations so far this quarter.

Even Citigroup (C, Fortune 500), which has struggled mightily for more than a year to untangle itself from the big bets it made on the U.S. housing market, managed to eke out a profit of $1.6 billion in the latest quarter, much to Wall Street’s surprise.

"[Bank of America] should theoretically have many of these same positive ingredients in its [first quarter] results," Nancy Bush, bank analyst and founder of NAB Research LLC, wrote in a note to clients last week. "If not - look out."

Analysts are currently betting that BofA will swing back into the black when it reports on Monday, after suffering a $1.79 billion loss last quarter. Current expectations are for the company to report a profit of $615 million, or 5 cents a share, according to Thomson Reuters.

To be fair, there have been a couple of bright spots for Bank of America in recent months, including a recent mortgage refinancing boom and widening profit margins on loans thanks to lower interest rates.

And there is the reigning belief that the bank is one of the best positioned to grow once the economy turns the corner, helped in no small part by its two high-profile, albeit controversial, purchases last year.

But industry analysts worry that many large lenders, including Bank of America, will face continued deterioration across a variety of loan portfolios, which will ultimately weigh on bank results at least for the remainder of the year.

JPMorgan Chase, for example, revealed rising credit costs in its sizeable credit card division and with so-called jumbo mortgages, or loans of more than $417,000. Jumbos have been a pocket of the housing market that has held up relatively well until now.

Friedman Billings Ramsey analyst Paul Miller points out that Bank of America is also a big player in credit cards and jumbo mortgages. What’s more, he worries that the bank’s commercial and industrial loan portfolio, which he estimates to be worth somewhere in the neighborhood of $280 billion, could be the next problem area for BofA online instant cash advance.

"We do know that credit trends are worsening," said Miller. "You are not looking at losses peaking until the middle part of 2010."

Trying times for Ken

But the bank’s woes extend beyond just the company’s income statement and balance sheet. While investors and taxpayers are angry at many bank executives in the wake of the credit crisis and resulting bank bailout, BofA chairman and CEO Ken Lewis arguably faces the biggest credibility gap of any bank leader.

Both shareholders and taxpayers were incensed after it was revealed in mid-January that Bank of America needed an additional $20 billion in government funds, along with guarantees on $118 billion in assets, to help the company absorb last fall’s purchase of Merrill Lynch.

BofA had already received $25 billion from the government, which included $10 billion for Merrill Lynch, during the first round of the financial bailout.

Much of the outrage has failed to moderate in the months since, which means Bank of America will have many questions to answer from critics after it reports its results and at the company’s annual shareholder meeting later this month.

Two activist shareholder groups — CtW Investment Group, an investment advisor to pension funds and Finger Interests, which holds 1.1 million in company shares — have been running an aggressive campaign aimed at ousting lead director O. Temple Sloan and members of the company’s asset quality committee for failing to spot the problems at Merrill before the deal was completed.

But perhaps the biggest change could come directly at the top. Two independent proxy advisory firms have all thrown their support behind a proposal which would split the role of chairman and CEO. That proposal is considered a direct challenge to Lewis, who has held both positions since 2001.

Few would deny that Lewis helped transform Bank of America from a regional banking giant into the nation’s largest bank based on deposits during his leadership. And until now, many viewed him as one of the savviest bankers in the industry.

But with the company’s stock continuing to trade 74% below its yearly highs and the taint of the Merrill purchase still fresh in the minds of investors, Lewis may have no other choice but to relinquish some control.

Then again, one analyst who asked not to be named suggested that if Bank of America reports results as strong as its peers and the stock goes up, that could go a long way toward redeeming Lewis in the eyes of shareholders.

"Good numbers always get you more time than bad numbers do," he said. 

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Intel Corp. said Tuesday its first-quarter profit dropped 55% amid a weak market for personal computers, but the world’s largest chipmaker topped Wall Street’s forecasts for earnings and revenue.

The Santa Clara, Calif.-based company’s net income totaled $647 million, or 11 cents per share, for the three months ended March 28, compared with $1.44 billion, or 25 cents per share, in the year-earlier period.

A consensus estimate of analysts polled by Thomson Financial had forecast a profit of 3 cents per share.

Sales fell 26% to $7.15 billion from $9.67 billion a year ago. Analysts were looking for $6.98 billion.

"Desktop computer sales hit bottom and have followed a more normal pattern since February," chief executive Paul Otellini said in a conference call.

Otellini noted the company’s "horrendous" fourth quarter, when profit fell 90%.

"We’re still in a fragile economic environment, but the past three months have improved our ability to look at the market now," he said. "It’s given us the confidence to say we’ve seen the bottom."

He expects a gradual recovering of demand and replenishing of stores’ inventories in the coming months.

Intel would not provide a formal outlook, but for internal purposes, the company predicted second-quarter revenue that will be flat compared with the first quarter.

Shares added 3 cents to close at $16.01 Tuesday, but fell 85 cents, or 5.3%, in after-hours trading fast cash savings account.

"People were hoping for a blowout quarter, and it didn’t happen," said David Wu, analyst at Global Crown Capital.

"There wasn’t much chance to live up to the hype, and people were disappointed to see it wasn’t a performance like Wells Fargo or Goldman Sachs," he added.

The company’s internal prediction of flat revenue may also have punished the stock, said Trip Chowdhry, analyst at Global Equities Research.

As goes Intel…

Intel (INTC, Fortune 500) is a bellwether for the technology industry, as investors look to its results as a barometer of spending on personal computers and servers. When manufacturers buy more of Intel’s computer chips, it suggests they expect higher consumer demand.

Like many chipmakers, Intel has suffered from slumping PC sales in the economic downturn. Big technology stocks have stabilized somewhat in the first quarter of 2009. The Dow is down about 10% and the tech-heavy Nasdaq Composite is down 3% since the beginning of the year, but Intel and IBM (IBM, Fortune 500) are the only two Dow components that are up year-to-date.

Intel and rival Advanced Micro Devices (AMD, Fortune 500) provide most of the chips for standard personal computers, while Samsung and Texas Instruments (TXN, Fortune 500) have most of the market share for mobile-phone processors. 

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The number of people filing initial claims for unemployment benefits fell last week, while those filing for continuing claims hit an all-time high for the 11th straight week, according to a government report released Thursday.

In the week ended April 4, a total of 654,000 people filed initial jobless claims, lower than the previous week’s upwardly revised 674,000, the Labor Department reported.

The upwardly revised total for the week ended March 28 was the highest for weekly claims since October 1982.

The 4-week moving average of people filing initial claims for unemployment benefits - which smoothes out weekly volatility - was 657,250, a decrease of 750 from the previous week’s revised average of 658,000.

A consensus estimate of economists polled by Briefing.com expected 660,000 first-time filers last week.

One economist was hopeful that the drop was a sign that the jobless claims have peaked.

"We have good reason to look at this drop off from this high level - tentatively - that we may have seen the peak," said Robert Brusca, chief economist at Fact and Opinion Economics.

The number of people continuing to file for jobless benefits rose to 5.84 million in the week ended March 28, the latest week for which the data was available. The number of people filing continuing claims marked an increase of 95,000 from the previous week’s revised level of 5 emergency cash loans.75 million.

The reading on continuing claims was the highest number since the government began keeping records in 1967, and the 11th consecutive week that continuing claims rose to a record high.

The 4-week moving average of continuing claims was 5.65 million, an increase of 146,750 from the previous week’s revised average of 5.5 million.

The recession forced business owners to chop away at their headcount in order to bring down overhead spending.

Last Friday, the Labor Department reported that employers cut 663,000 jobs in March and the unemployment rate rose to 8.5% from 8.1% in February. The unemployment rate was the highest since November 1983.

Brusca is optimistic that the recovery in the economy should be as quick as the deterioration was. He said the economy should begin to recovery 8 weeks beyond the peak in claims.

"When you have a sharp and deep recession, sharp job losses, then the trough of the recession tends to be the trough for jobs, and the peak in the unemployment rate tends to come very close to that trough," said Brusca.  

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The White House task force charged with retooling the U.S. auto industry is meeting with General Motors officials this week and next in Detroit, an administration official said Wednesday.

"The goal is to accelerate the process that the President laid out last Monday," the official said.

"They will be in Detroit through the end of the week and will be returning next week as well free credit report and score."

Last week President Barack Obama gave GM (GM, Fortune 500) 60 days to develop a more sweeping restructuring plan. 

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Japan may spend about 15 trillion yen ($150 billion) in its next economic stimulus package, according to a ruling Liberal Democratic Party legislator involved in shaping the plan.

The measures would represent about 3 percent of gross domestic product, taking total spending by Prime Minister Taro Aso to spur growth to 25 trillion yen since he took office in September. Aso this week indicated he wanted to spend at least 10 trillion yen in the latest package.

Aso must call elections by September just as Japan heads for its worst recession since World War II, with companies from Toyota Motor Corp. to Sony Corp. slashing production and firing workers. The stimulus will focus on the job market, credit to companies, energy-efficient technology, support for regions and welfare, Finance Minister Kaoru Yosano said this week.

“Japan has had the worst economic deterioration among developed nations, and that’s pushed the government to come up with a package of this size,” said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo. The measures “might actually help the economy, unlike previous ones.”

Bond yields rose today toward the highest since November after Yosano said issuing debt to fund the spending is “unavoidable.” Aso told reporters today that the government may need to sell bonds to pay for the measures, without specifying any amounts. The yield on the benchmark 10-year bond climbed 2.5 basis points to 1.45 percent at the close in Tokyo.

Debt Burden

The government’s ability to revive the economy is constrained by its debt, which is already the world’s biggest and is likely to spiral to 197 percent of gross domestic product next year, according to the Organization for Economic Cooperation and Development.

“The government needs to make it clear that how they’re going to fund the package, otherwise yields will keep rising,” Nishioka said.

The Finance Ministry will sell debt to pay for most of the spending, Kyodo News reported, without saying where it got the information no fax instant cash advance. Some 3 trillion yen will come from so-called special accounts and 1 trillion yen from reserves, Kyodo said.

The package will be the largest ever for a single year, surpassing former Prime Minister Keizo Obuchi’s 8.5 trillion yen stimulus during the Asian financial crisis in 1998.

The LDP lawmaker said Aso’s plan is likely to total 50 trillion yen when including financial initiatives such as funds set aside to help companies get access to funding.

Plunging Exports

Reports today painted a mixed picture of the world’s second-largest economy.

Exports plunged a record 50.4 percent in February from a year earlier, the Finance Ministry said, and another survey showed bankruptcies rose to a six-year high in March. The Bank of Japan said the economy is deteriorating “significantly.”

Meanwhile merchant sentiment surged to the highest since July, the Cabinet Office said, indicating factory production may recover in coming months, according to Takahide Kiuchi, chief economist at Nomura Securities Co. in Tokyo.

“One-shot spending for a single year may not be enough to bring Japan’s economy back to a sustainable recovery,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “The government may need to spend more after the election.”

Aso’s approval rating, which fell below 10 percent less than two months ago, has rebounded as he prepares sanctions against North Korea after it launched a missile over Japan earlier this week. He has also benefited from a drop in support for Ichiro Ozawa, leader of the opposition Democratic Party of Japan, whose top aide was charged with campaign-funding violations.

The prime minister’s support rating rose 9.4 percentage points from last month in a Nippon Television survey that was completed April 5, the day North Korea fired its rocket.

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The Senate passed a $3.53 trillion version of the federal budget for fiscal year 2010 late Thursday night in a party-line vote, ending several weeks of acrimonious partisan debate.

The package was approved on a 55 to 43 vote. GOP Sens. Arlen Specter of Pennsylvania, and Olympia Snowe and Susan Collins of Maine — who voted in favor of the president’s stimulus bill last month — voted against what is essentially the blueprint of Obama’s economic policies going forward.

Earlier in the evening, the House of Representatives passed its own version of the $3.55 trillion budget, capping off a long day of debate and voting marked by the defeat of several alternative spending plans.

The House version of the budget, which passed by a margin of 233-196, passed in a virtual party-line vote. All but 20 House Democrats supported it; no House Republican voted in favor.

Neither budget package garnered a single GOP.

In London, England, where he has been attending the Group of 20 summit, President Barack Obama lauded the budget votes.

"Tonight, the Senate has joined the House of Representatives in taking an important step toward rebuilding our struggling economy," he said in a statement.

"And by making hard choices and challenging the old ways of doing business, we will cut in half the budget deficit we inherited within four years. With this vote comes an obligation to pursue our efforts to go through the budget line-by-line, searching for additional savings. Like the families we serve, we must cut the things we don’t need to invest in those we do."

The House budget largely tracks Obama’s initial proposed spending plan, with the exception of a decision to drop his $250 billion request for potential future bailouts of struggling financial institutions.

Fiscally conservative House Democrats, known as Blue Dogs, also negotiated with House Democratic leaders to cut $7 billion from the president’s $540 billion request for non-defense discretionary spending.

Under the House Democrats’ plan, the federal government will run an anticipated deficit of $1.2 trillion in the next fiscal year. Their plan promises to cut the deficit by more than half by 2013.

House Democrats agreed to extend the middle class tax cut that was included in the recently-passed economic stimulus plan, but failed to specify how the cut would be paid for after 2010.

They also included language that allows for the controversial procedure called "budget reconciliation" for health care, a tool that would limit debate on major policy legislation.

Senate Democrats did not include reconciliation in their version of the budget. The matter is guaranteed to be a major partisan sticking point when the two chambers meet to hammer out a final version of next year’s spending plan. If it passes, it would allow the Senate to pass Obama’s proposed health care reform without the threat of a Republican-led Senate filibuster.

Sen. Mike Enzi, R-Wyoming, speaking for most of his GOP Senate colleagues, warned Tuesday that if a health-care "reconciliation winds up in the budget bill, it’ll be like a declaration of war health insurance companies. … I hope that that wedge doesn’t get thrown in there."

Both the House and the Senate version of the budget allow former President George W. Bush’s tax cuts for couples who make more than $250,000 to expire in 2010, and both plans let Obama’s signature tax cuts — $400 for individuals and $800 for couples — expire as well, unless the White House finds a way to pay for them.

Under the House plan, the cuts would expire in 2010; in the Senate plan, they would expire in 2012.

Both plans also do away with Obama’s request for an additional $250 billion, if needed, in financial-sector bailout money.

Key differences include deficits and non-military discretionary spending. The House budget would reduce the deficit from $1.7 trillion in 2009 to $598 billion in 2014, House Democrats said, while the Senate Democrats say their plan would bring the deficit down an additional $80 billion.

The Senate bill also calls for less non-military discretionary spending in 2010 — $475 billion compared to the House plan’s $532.6 billion.

Before passing the Democratic budget proposal, the House rejected an alternative proposal put forward by the GOP leadership, which called for $4.8 trillion less in overall spending over the next decade, in part through a five-year freeze in most non-defense discretionary spending.

"House Republicans were united in the desire to find reasonable solutions for middle class families, focused directly on creating jobs, tax relief, and empowering small businesses to survive and grow," said House Minority Whip Eric Cantor.

"The Republican budget was crafted to help those Americans worried about their jobs, their healthcare, their financial security, and their real fears that Washington is spending and borrowing money that America does not have. Republicans offered a comprehensive budget that provides the American people with the ideas, energy and common-sense solutions they are looking for."

Among other things, the House GOP’s version of the budget would have repealed the entire $787 billion economic stimulus package except for an extension of unemployment insurance benefits. It also would have rolled back a recently passed 8 percent spending boost in the budget for the remainder of the current fiscal year.

Thirty-eight Republicans voted against their own leadership’s bill in that vote, while two Democrats voted in favor of it. The final vote was 293-137 against the GOP proposal.

Overall, the Republican version of the budget called for $3.6 trillion less in borrowing over the next 10 years.

– CNN’s Dana Bash and Deirdre Walsh contributed to this report 

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European finance chiefs said the European Central Bank is doing what it can to fight the worst recession since World War II even after policy makers yesterday cut borrowing costs by less than economists expected.

The Frankfurt-based ECB yesterday reduced its benchmark rate by a quarter point to 1.25 percent, compared with the half- point reduction forecast by 49 of 55 economists in a Bloomberg survey. The euro-region economy may shrink as much as 4.1 percent this year, faster than the ECB forecasts, according to the Organization for Economic Cooperation and Development.

“I expected a 50 basis-point cut yesterday,” Cypriot Finance Minister Charilaos Stavrakis told reporters today in Prague where he met with finance chiefs from the European Union, adding that the central bank had “done a good job.” Finnish Finance Minister Jyrki Katainen said “there is more room for extra cuts.”

ECB President Jean-Claude Trichet at the Prague meeting today repeated that the central bank may lower the key rate further next month, when he said policy makers also will decide on any new “non-standard measures.” The U.S. Federal Reserve, the Bank of England and the Bank of Japan have cut their key rates to almost zero and are pumping money into their economies by buying government and company securities.

The ECB is “making an effort” to “ease policy,” Portuguese Finance Minister Fernando Teixeira dos Santos said. Austrian counterpart Josef Proell said he “hoped” the rate reductions so far may be “enough.”

‘Behind the Curve’

The euro declined against the dollar on speculation the central bank is moving too slowly in tackling the crisis. The single currency fell to $1.3437 as of 7:06 p.m. in Prague after rising to $1.3461 yesterday.

The decision by policy makers to wait until next month to decide on other tools “is probably euro negative” on the longer term as it confirms that the ECB is behind the curve,” said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the biggest Dutch mortgage lender.

While the rate of contraction in European manufacturing and services industries is slowing, European leaders face increasing pressure at home as unemployment continues to increase. In the U.S., the unemployment rate jumped in March to the highest level since 1983 as the economy lost 663,000 jobs.

“There are encouraging signs, but they are not many,” said Luxembourg Finance Minister Jean-Claude Juncker classic car insurance. Trichet said 2009 “appears to be a difficult” year.

Sagging Demand

Sagging demand has employers from French car manufacturer Renault SA to German Heidelberger Druckmaschinen AG, the world’s largest maker of printing presses, reduce production, postpone investment and fire workers.

European Union Monetary Affairs Commissioner Joaquin Almunia today suggested that “materializing downside risks” will probably prompt the EU to cut its economic-growth forecasts. The updated projections will be released on May 4.

At the same time, both Almunia and Trichet stressed the need to envisage the policies that will be needed when growth returns. “We have to be credible in the exit strategies for all we are doing today, fiscal policies, monetary policies,” Trichet told reporters.

Finance ministers also welcomed the Group of 20’s blueprint for stronger regulation of the finance industry, including stricter limits on hedge funds, executive pay, credit-rating firms and risk-taking by banks and a pledge for more than $1 trillion in emergency aid to cushion the economic fallout.

Hedge Funds

“I am very satisfied” with the G-20 meeting, French Finance Minister Christine Lagarde told reporters, saying she saw “considerable progress.” German Finance Minister Peer Steinbrueck said the agreement by the G-20, which gathers the world’s largest industrialized nations and emerging economies, shouldn’t be “underestimated.”

Hedge funds that are “systemically important” will be subjected to greater oversight as will all key financial instruments, markets and instruments, the G-20 said. While German Chancellor Angela Merkel and French President Nicolas Sarkozy wanted all of the investment funds to brought under the spotlight, Czech Finance Minister Miroslav Kalousek told reporters that the hedge-fund rules that the G-20 agreed on are “sufficient.”

Trichet stressed the need to implement the measures “as rapidly as possible” in order to revive bank lending. Almunia said that “the treatment of impaired assets and the cleaning of balance sheets in the financial sector is of the essence.”

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Millions of iPhone users around the world now have the ability to make cheap or even free wireless calls using Internet calling service Skype — unless, of course, they happen to live in Canada.

The Internet telephone unit of eBay Inc. released a new iPhone application Wednesday that allows users to call and message other Skype users for free, providing they are in a Wi-Fi hotspot. A fee will be charged if the Web-calling service is used to call landlines or mobile phones.

But, in what has become a familiar refrain to Canadian ears, there was no word on when the service would be available to iPhone users in the Great White North through Apple Inc.'s App Store.

"The Skype for iPhone application is not available for download in Canada at this time," said Chaim Haas, a spokesperson for Skype, in an email. "There is a vague restriction in one of the standards-based technology licenses, and Skype is looking into it.

"The issue is not related to Apple, nor is it specific to Skype."

The prospect of an indefinitely delayed launch of the Skype service here comes on the heels of other letdowns for tech-savvy Canadians. They include being forced to wait 12 months for the arrival of the iPhone and the frustration experienced by territorial licensing restrictions that prevent the streaming of television shows from U.S. network websites.

For users of rival Research In Motion Ltd.'s BlackBerry devices, Haas said a "lite" version of the Skype service would be made available in May.

While the BlackBerry service will technically be available in Canada, Haas said Canadian users would be limited to sending and receiving instant messages and making status updates. By contrast, users in other countries - Australia, Brazil, Denmark, Estonia, New Zealand, Poland, Sweden, the United States and the United Kingdom - will be able to place Skype-to-Skype calls or SkypeOut calls on their BlackBerrys free business cards.

"We are restricted from offering the full feature set in more countries due to regulatory reasons," said Haas. "However, we hope to add support for the full feature set in additional markets over time."

Some have speculated that the hold-up is due to resistance from Canada's wireless carriers, which rely heavily on revenue from traditional voice calling.

But Elizabeth Hamilton, a spokesperson for Rogers Communications Inc., which is the only Canadian carrier that offers the iPhone, said the cable giant has made no effort to prevent its iPhone subscribers from using the service — providing they can find somewhere to download it.

Similarly, Julie Smithers, a spokesperson for Bell Canada Inc., said a version of Skype has been available to Bell customers using Windows Mobile devices for some time, but noted that Bell doesn't market or offer support for the service due to a lack of customer interest.

Kevin Restivo, an analyst at IDC Canada, said Skype's efforts to move from desktop computers to the fast-growing wireless market is unlikely to threaten the dominant position of wireless carriers any time soon.

"There's always a small percentage of the population that will look for non-traditional ways of doing things when it comes to wireless," he said.

"How quickly (the wider population) takes to it is another issue."

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