washington (Bloomberg) — Senior White House adviser David Axelrod said the recession in the US is "gaining momentum" and it will take time for the $787 billion stimulus legislation passed by Congress last week to take effect.

The economy would be in "much worse shape" over the coming year without the combination of tax cuts and spending in the bill, Axelrod said today on the "Fox News Sunday" programme.

"There will be signs of activity very quickly," Axelrod said. "But it's going to take time to show up in the statistics. The president has said it's likely to get worse before it gets better."

In a separate interview on NBC's "Meet the Press", Axelrod said the administration expects 75 percent of the money in the legislation will be spent within 18 months.

The US labour market has lost 3.6 million jobs since the recession started in December 2007. Companies from Wal-Mart Stores Inc. to General Motors Corp. have announced cuts to their payrolls, highlighting the broad reach of the recession. FedEx Corp., the second-largest US package-delivery company, said it will eliminate 900 jobs in its freight unit.

Congress passed the fiscal stimulus bill on Friday and is sending it to President Barack Obama for his signature this week. The president has said it would create or save more than 3.5 million jobs and pay for needed improvements to US roads, bridges and dams.

Included with the legislation were limits on executive pay and bonuses at companies receiving federal bailouts. Some of the provisions go beyond the $500,000 cap announced by Obama last month, by restricting bonuses for senior executives and the next 20 highest-compensated employees at companies that receive more than $500 million from the Treasury Department's Troubled Asset Relief Programme.

It limits bonuses and other incentive pay at companies on a sliding scale according to how much federal aid they receive. Some critics have said the tougher restrictions could prompt key managers to leave.

Axelrod confirmed on Fox that both Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers had conveyed their concerns to key lawmakers, and he said the said the administration will work with Congress to "come up with an appropriate approach" on the issue.

The concerns of the White House "are at the margins", he said. "We all have the same goal. We all have the same sentiment, and we want to do something that's workable and will work with them to get to that point," Axelrod said.

"The president has been very clear that he shares the outrage that most Americans feel about the spectacle of gaudy bonuses for executives at firms that are getting extraordinary assistance from American taxpayers," he said.

Lawmakers have been angered by bonuses paid to executives at banks receiving funds from the US government. Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. awarded their employees a cumulative $145 billion in bonuses from 2003 through 2007, according to estimates based on company reports.

The next part of Obama's economic strategy is dealing with the housing crisis, Axelrod said. The president plans to outline his plan to stem foreclosures on February 18 in Phoenix.