McConnell Proposes State Loans, Middle Class Tax Cut

By Jennifer Parker

Jan 4, 2009 11:00am

The top Republican in the Senate proposed for the first time on "This Week" that the government pass an immediate middle-class tax cut.

"A possibility would be to take a look at 25 percent [tax] rate currently applied to the middle class and lower it to 15 percent," Sen. Mitch McConnell, R-Ky., told me on "This Week."

McConnell also proposed that an economic stimulus money designated for states be a loan, not a grant.

"We want to be a part of the process, and it might make sense to lend the money to the states that will make them spend it more wisely," he said, "Nobody thinks that we ought to be spending this money on mob museums and waterslides and if the money were lent rather than just granted, states would, I think, spend it wisely and the states that didn’t need it at all wouldn’t take any."

President-Elect Barack Obama has said he wants to sign an economic stimulus package on Jan. 20th when he is sworn in.

However, McConnell said Republicans are pushing for bipartisan hearings on Obama’s economic stimulus plan.

"We want to make sure that it’s not just a trillion dollar spending bill," McConnell told me. "What I worry about here, George, is the haste with which this may be done. This is an enormous bill, it could be a trillion dollar spending spend. Do we want to do it with essentially no hearings and no input for example in the senate from Republican senators who represent half the American population. I don’t think that’s a good idea."

McConnell also suggested the Senate look at nine appropriations bills that would spend $400-billion in economic spending.

"It’s already been vetted, been looked at by both Democrats and Republicans which could pass on a largely bipartisan basis," McConnell said. "Much of that spending is related to the kinds of items that could end up in the trillion dollar spending package so that’s a place to start."

McConnell also questioned Obama’s proposal to create 20 percent of the jobs in the public sector.

"That would be 600, 000 new government jobs," he said. "That’s about the size of the post office workforce. Is that a good idea? That’s something that strikes us that we ought to look at."

In our interview on "This Week" Sen. Dick Durbin told me on that senators need to put aside bipartisan squabbling.

"We can’t pass the economic recovery plan that this nation desperately needs without bipartisan cooperation," Durbin said, "We’ve got to put aside a lot of the squabbling of the past and come together under this administration and new leadership to get the American economy back on line."

–George Stephanopoulos

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