Obama Pitches Stimulus Plan
Tuesday, January 6, 2009
President-elect Barack Obama arrived on Capitol Hill yesterday and immediately set to work reassuring skeptical Republicans about his massive economic stimulus package -- part of a campaign that earned him praise for seeking their input but questions from those averse to hundreds of billions of dollars in new spending.
Pitching a plan that is expected to include $300 billion in tax cuts, Obama pledged to consult Republican leaders, who until yesterday had been left out of negotiations between the president-elect's advisers and congressional Democratic staff.
"The monopoly on good ideas does not belong to a single party. If it's a good idea, we will consider it," Obama told House and Senate leaders at an hour-long closed-door meeting, according to one attendee.
Obama, making his pitch two weeks before taking office, won generally favorable reviews from GOP leaders, particularly because of his decision to increase the tax-cut ratio to 40 percent of the overall package.
Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader John A. Boehner (R-Ohio) told reporters they were convinced that Obama was sincere in his invitation to let Republicans help craft the nearly $800 billion package to create jobs and lift the nation out of recession. But they also expressed concerns about the size of the package, as well as particular elements under discussion between Obama and Democratic lawmakers.
"I remain concerned about wasteful spending that might be attached to the tax relief. Simply put, we should not bury future generations under mountains of debt," Boehner said.
Boehner suggested the legislation would likely be signed into law by mid-February, but the president-elect said yesterday that he would like the House and Senate to present him with a bill by the end of January or beginning of February.
"The economy is very sick," Obama said. "The situation is getting worse. . . . We have to act and act now to break the momentum of this recession."
As described by his advisers, Obama is proposing a package of tax cuts to benefit families and businesses. Like the overall spending proposal, the tax cuts would be designed to put cash in people's pockets over the next two years and kick-start the economy.
Working families would be eligible for a tax credit worth up to $1,000. Individuals would be eligible for a $500 credit.
Businesses would get an extension of expired tax breaks from the 2008 stimulus package signed by President Bush, including a "bonus depreciation" break that allows businesses to write off more of their purchases more quickly and an increase in small-business expensing limits. Businesses could apply current losses to taxes paid back as far as five years ago, reaping an immediate cash windfall. And they would receive a $3,000 tax credit for every job they create or preserve.
Key details of the stimulus proposal remain unresolved. For instance, upper-income individuals would not be eligible for the income tax credit, but the income threshold for phasing out the benefit has not been set. Obama officials said it would likely be about $200,000 a year, the range set during the campaign.