US president-elect Barack Obama has demanded bold action on his near US$800 billion stimulus plan, warning Congress would send the US economy into an even deeper hole if it failed to act swiftly.
Obama touted a sweetener of US$300 billion dollars in tax cuts on Monday in an apparent bid for opposition Republican support, as he plunged into the fray on his first day since moving to Washington, two weeks before his inauguration.
“The most important message today is that the situation is getting worse. We’ve got to act boldly and we’ve got to act swiftly. We cannot delay,” said Obama who met leaders from both sides of the political divide on Capitol Hill.
“It’s clear that we have to act and we have to act now to address this crisis and break the momentum of the recession, or the next few years could be dramatically worse,” Obama said.
Obama sent a jolt of momentum through Washington after several congressional leaders on Sunday dismissed expectations that the mammoth stimulus plan could be on the new president’s desk when he is sworn in on Jan. 20.
The middle of next month is now the target date for action by both chambers of Congress.
The president-elect’s aides meanwhile divulged details of the massive scope of the package, his opening political gambit as he takes office amid the worst global economic crisis in more than 70 years.
Obama will propose tax cuts totaling US$300 billion over two years, or around 40 percent of a package that could top US$775 billion, a transition source said on condition of anonymity.
The president-elect has said the stimulus will include a multi-billion-dollar program of public works, including highway and bridge repairs, renovating school classrooms and aid to cash-strapped states.
The plan is designed to create or preserve 3 million jobs over three years, includes tax and spending incentives for renewable energy production and provides extra health care benefits for needy Americans.
US citizens can expect immediate tax relief of around US$500 for individuals and US$1,000 for couples under the plan, and some businesses would be able to write off last year’s losses against their tax return.
Republican leaders, seeking to position their party after a drubbing in November’s elections, were cautious after the talks.
Senate minority leader Mitch McConnell suggested Obama should adopt some Republican ideas — including making aid to states as loans rather than handouts to win symbolic big majorities in Congress.
House minority leader John Boehner praised the idea of tax cuts but expressed anxiety at the size of the wider package.
Senate Democratic Majority leader Harry Reid however raised the prospect the package could balloon through the US$1 trillion barrier.
“I have not received, of course, the exact package from the president-elect and his folks, but he has indicated that there’s at least 20 economists that he’s talked with, and all but one of those believe it should be from US$800 billion to US$1.2 trillion or US$1.3 trillion,” Reid said.
House speaker Nancy Pelosi, who also met Obama on Monday, would not commit to a timetable for moving the stimulus plan, but promised quick action.
“We know what the time constraints are, they are dictated by the sense of urgency that the American people have about their economic well-being,” Pelosi said.
Obama’s transition team said that he would maintain his focus on the economy yesterday with more meetings with his economic brain trust, including treasury secretary designate Timothy Geithner and the director designate of the council of economic advisors Lawrence Summers.
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