Obama's $825B stimulus plan includes spending, tax cuts
WASHINGTON -- President-elect Barack Obama's $825 billion plan to jump-start the economy and create or save up to 4 million jobs includes twice as much money for spending as for tax cuts, setting up an early battle with Republicans in Congress who favor a different approach.
House Democrats unveiled the first details Thursday of the package, which is likely to change — and get even more expensive — as it moves through the House and Senate. Obama wants it on his desk by mid-February.
The emergency package includes $550 billion to be spent within two years — more than the government spends annually on programs not including defense and benefit programs such as Medicare and Social Security.
About $318 billion would go to cash-strapped state and local governments facing the prospect of layoffs or tax increases. The money will go toward such things as school repairs and road construction and help pay for rising Medicaid costs.
An additional $102 billion would help victims of the recession with unemployment insurance, health care, food stamps and job training. Jobless aid, available for up to 59 weeks, would be increased by about $25 a week.
Much of the $275 billion in tax cuts would go to middle-income families in the form of $1,000 tax cuts ($500 for individuals). An array of business and other tax cuts would make up the remainder.
The spending-to-tax-cut ratio was decided by House Democrats concerned that most of last year's tax cuts didn't get spent. "We wanted to get the biggest bang for the buck," said House Speaker Nancy Pelosi.
Rep. David Obey, D-Wis., chairman of the House Appropriations Committee, described the plan as "the largest effort by any legislative body on the planet to try to take government action to prevent economic catastrophe." But he said it might not be enough. "This isn't the last one," he said.
House Minority Leader John Boehner, R-Ohio, called it "everything all these agencies ever wanted to do, but they never could quite find the money to get them done." He singled out for ridicule proposals to spend $650 million on digital television conversion assistance and $600 million on alternative-fuel vehicles for the federal government.
