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Obama Seeks GOP Backing for Stimulus

Video
President Barack Obama says it appears Congress is 'on target' to approve a massive new stimulus package by Feb. 16. Video by AP

The bulk of the tax relief in the House and Senate plans comes in the form of a $500 tax credit per worker, either in a refund or through decreasing withholdings from paychecks. Businesses would be allowed to write off 100 percent of their current losses over the past five years, a more generous provision than the 90 percent write-off provided in the House plan. The Baucus proposal includes $30 billion in credits to create renewable energy resources.

Sen. Charles E. Grassley (Iowa), the top Republican on the Senate Finance Committee, who has not endorsed the plan, vowed to include a tax provision preventing upper-middle-class families from becoming subject to the alternative minimum tax, which was designed 40 years ago to prevent the nation's most wealthy families from sheltering their earnings.

Democratic leaders generally support including the AMT "patch" in the legislation, but fear that its cost of at least $70 billion would push the overall stimulus package very close to the politically daunting $1 trillion threshold.

Republicans, who support the AMT provision, instead would cut spending, criticizing the plan as filled with wasteful expenditures that would do little to promote job growth. Republicans have frequently highlighted items such as $200 million in renovations to the Mall, $50 million for the National Endowment for the Arts and $360 million to slow the spread of sexually transmitted diseases.

"How you can spend hundreds of millions of dollars on contraceptives; how does that stimulate the economy?" House Minority Leader John A. Boehner (R-Ohio) said after the Obama meeting.

Staff writers Lori Montgomery and Perry Bacon Jr. contributed to this report.


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