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Obama plan has $300-billion in tax cuts

WASHINGTON — President-elect Obama plans to include about $300-billion in tax cuts for workers and businesses in his economic recovery program as he seeks to win over congressional skeptics worried that he was too focused on government spending, advisers said Sunday.

The legislation Obama's team is developing with congressional Democrats will devote about 40 percent of the cost to tax cuts, including his centerpiece campaign promise to provide credits up to $500 for most workers, costing roughly $150-billion. The package also will include more than $100-billion in tax incentives for businesses to create jobs and invest in equipment or factories.

The overall package of $675-billion to $775-billion is taking shape as Obama arrived in Washington and planned to begin trying to build support in Congress and among the broader public for his approach to stimulating the economy. Obama planned to meet with congressional leaders today and deliver a speech on Thursday laying the ground for his emerging economic program.

Although some tax cuts were always expected to be included in Obama's economic package, his team disclosed the scope and some details of the plans Sunday at a time when Republicans have begun voicing criticism of what they describe as an open-checkbook approach to spending. By focusing more attention on the tax cuts in the plan, Obama aides hope to frame it as a balanced, pragmatic approach.

Obama will use his public events this week to promise what one adviser called "radical reforms" to impose more control over the regular federal budget down the road. Among other areas, the president-elect will focus on changing Pentagon contracting and aid to corporate America, advisers said. He will also designate a chief performance officer and a chief technology officer Wednesday to help make government more efficient, they said.

Still, Democratic leaders in Congress acknowledged that the economic package would not be ready for Obama's signature immediately after his inauguration Jan. 20 as they once hoped. "It's going to be very difficult to get the package put together that early so that it can have sufficient time to be reviewed, and then sufficient time to be debated and passed," Rep. Steny H. Hoyer of Maryland, the House majority leader, said on Fox News Sunday.

Hoyer said a more likely goal would be mid February before Congress leaves on a Presidents Day recess. "We certainly want to see this package passed through the House of Representatives no later than the end of this month, get it over to the Senate, and have it to the president before we break for the presidential break," Hoyer said.

Congressional Republicans continued to press for more public hearings and study, and some of their leaders threw out their own ideas for what should be in the plan. Sen. Mitch McConnell of Kentucky, the Republican leader, proposed Sunday that any money distributed to the states be provided as loans rather than outright grants.

Obama plan has $300-billion in tax cuts 01/04/09 [Last modified: Wednesday, November 3, 2010 9:16am]
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