$300 billion in tax cuts part of Obama plan
Hopes to blunt GOP criticism of stimulus bill
WASHINGTON - President-elect Barack 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 yesterday.
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 will also 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, who flew to the capital yesterday to join his family in a hotel suite while awaiting his inauguration, planned to meet with congressional leaders today and deliver a speech 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 yesterday 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.
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," Representative 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. Senator Mitch McConnell of Kentucky, the Republican leader, proposed yesterday that any money distributed to the states be provided as loans rather than outright grants.
"Nobody thinks we ought to be spending this money on things like Mob museums and waterslides," McConnell said on "This Week" on ABC. "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."
McConnell said Republicans were more likely to favor tax relief and tax credits as part of the economic measure and said Congress should consider reducing the 25 percent income tax rate to 15 percent.
The president-elect arrived at Andrews Air Force Base in Maryland last night aboard a government 757 plane. He went by motorcade to his temporary home at the Hay-Adams Hotel, across from the White House.
Obama returned to Chicago Jan. 2 after a vacation in Hawaii. Michelle Obama had already arrived in Washington with their two daughters, Malia and Sasha.
On Jan. 15, five days before Obama's inauguration, the family will move into Blair House, the guest house on Pennsylvania Avenue where visiting heads of state traditionally stay. It also normally houses presidents-elect before inaugurations.
Malia, 10, and Sasha, 7, start classes tomorrow at their new school, Sidwell Friends, a Quaker school in Northwest Washington.
In addition to meeting with congressional leaders this week, Obama is expected to nominate a director of national intelligence and a CIA director, and seek a replacement for Bill Richardson as commerce secretary. On Wednesday, he will attend lunch at the White House with former presidents.
Material from the Associated Press was included in this report. 