HONOLULU — President-elect Obama's economic stimulus plan will include an immediate tax cut for middle-class families, and the incoming administration hopes to enact permanent tax cuts soon thereafter, a senior adviser to Obama said Sunday.
Faced with a worsening economy, Obama will include the tax relief in his economic stimulus package, which senior adviser David Axelrod said would be implemented soon and could cost between $675-billion and $775-billion. The massive recovery plan will seek to create or save 3-million new jobs, Axelrod said in appearances Sunday on NBC's Meet the Press and CBS's Face the Nation.
"Look, we feel it's important that middle-class people get some relief now," Axelrod said. Obama has "promised a middle-class tax cut. This package will include a portion of that tax cut that will become part of the permanent tax cut he'll have in his upcoming budget."
Giving people more spending money will "help get our economy going again," Axelrod said. He said he is hopeful the economic recovery plan is ready to be signed by Obama soon after his Jan. 20 inauguration.
"Obviously, the sooner the better," Axelrod said. "I don't think Americans can wait. People are suffering, our economy is sliding, and we need to act. And so our message to Congress is to work on it with all deliberate speed."
Obama, in his second week of a holiday vacation in Hawaii, continues to work on his economic plan, aides said. He is considering immediate tax cuts of $1,000 for couples and $500 for individuals, which would reduce the amount of taxes withheld from paychecks, a transition aide said. That plan could cost about $140-billion over the next two years, the aide said.
Axelrod said the incoming administration plans to propose permanent tax cuts in its next budget, but officials have not determined the form of permanent cuts. They likely would be based on Obama's campaign proposal, which said that families earning less than $250,000 would see their taxes remain the same or decrease.
Asked by NBC's David Gregory whether Obama would raise taxes on the wealthiest Americans by reversing President Bush's tax cut plan, Axelrod said Bush's plan is "something that we plainly can't afford moving forward."
"Whether it expires or whether we repeal it a little bit early, we'll determine later, but it's going to go," Axelrod said. "It has to go."
Obama's economic stimulus plan is expected to include billions in new spending on infrastructure projects, aid to beleaguered state governments and programs to create new jobs. Axelrod said creating 3-million new jobs is an essential part of the recovery plan.
"We want to do it in a way that leaves a lasting footprint, by investing in energy and health care projects and refurbishing the nation's classrooms and labs and libraries so our kids can compete, and rebuilding our crumbling roads and bridges and waterways," Axelrod said. "And in this way, we're not only just — we're not only creating work, but we're laying the foundation for the future of our economy."