Obama meets with lawmakers on stimulus plan
(AP) - President-elect Barack Obama declared thenational economy was "bad and getting worse" Monday as he begancrisis talks with congressional leaders on emergency action. Hepredicted lawmakers would approve hundreds of billions of dollarsin new spending and tax cuts within two weeks of his taking office.
"The economy is very sick," Obama said before meeting withSenate Democratic Leader Harry Reid. "The situation is gettingworse. ... We have to act and act now to break the momentum of thisrecession."
Obama, whose inauguration is two weeks from Tuesday on Jan. 20,said he expected quick approval of rescue legislation by the newCongress.
"I expect to be able to sign a bill shortly after takingoffice," he said. Pressed on the timing, he said, "By the end ofJanuary or the first of February."
Obama's proposal to stimulate the economy includes tax cuts ofup to $300 billion, including $500 tax cuts for most workers and$1,000 for couples,as well as more than $100 billion forbusinesses, an Obama transition official said. The total value ofthe tax cuts would be significantly higher than had been signaledearlier.
New federal spending, also aimed at boosting the moribundeconomy, could push the overall package to the range of $800billion or so.
Obama met earlier in the day with House Speaker Nancy Pelosi,D-Calif., as he set a tone of urgency for dealing with a financialsituation that he described as "precarious."
"The reason we are here today is because the people's businesscannot wait," Obama said as he arrived on Capitol Hill for talkswith Pelosi. "The speaker and her staff have been extraordinarilyhelpful in working with our team so we can shape an economicrecovery plan and start putting people back to work."
The tax cuts for individuals and couples would be similar to therebate checks sent out last year by the Bush administration andCongress in a bid at that time to boost the slowing economy. A keydifference is that the tax cuts this time around may be awardedthrough withholding less from worker paychecks. That provisionwould cost about $140-150 billion over two years.
For businesses, the plan would allow firms incurring losses lastyear to take a credit against profits dating back five yearsinstead of the two years currently allowed.
Another provision brought to the negotiations by the Obama teamwould award a one-year tax credit costing $40-50 billion tocompanies that hire new workers, and would provide other incentivesfor business investment in new equipment.
"We've got an extraordinary economic challenge ahead of us,"Obama said. "We're expecting a sobering job report at the end ofthe week."
Said Pelosi: "It is a great honor and personal privilege towelcome you to this office. Tomorrow we will swear in a newCongress and we will hit the ground running on the initiatives ...to ease the pain being felt by the American people."
Before meeting with Reid, the Nevada Democrat, Obama said,"This is not a Republican problem or a Democratic problem at thisstage. It is an American problem and we're going to all have tochip in and do what the American people expect."
Obama had meetings with a broad array of House and SenateDemocratic leaders and with a bipartisan group of key lawmakers. Hehad hoped to have Congress enact the recovery plan in time for himto sign when he takes office Jan. 20. But even his spokesman,Robert Gibbs, conceded that was "very, very unlikely."
House Majority Leader Steny Hoyer of Maryland said Sunday hewants the House to approve the plan by the end of the month,sending it to the Senate in time for action before Congress leaveson its mid-February break.
Obama has insisted that bold and quick action is necessary ifthe nation is to rebound from the greatest economic crisis sincethe Great Depression. He has said repeatedly he wants a plan thatwill create 3 million new jobs.
"Economists from across the political spectrum agree that if wedon't act swiftly and boldly, we could see a much deeper economicdownturn that could lead to double-digit unemployment and theAmerican dream slipping further and further out of reach," he saidin his Saturday radio and YouTube address.
Obama arrived Sunday night in Washington - a place he largelyhas shunned since winning election - just hours after New MexicoGov. Bill Richardson withdrew from consideration as commercesecretary amid a grand jury investigation into how some of hispolitical donors won a lucrative state contract.
The Richardson withdrawal marked the first major hiccup in asmooth transition that saw Obama select his Cabinet in record time,largely because of the magnitude of the economic and nationalsecurity challenges facing the new administration.
Obama aides have said the package Obama has dubbed the AmericanRecovery and Reinvestment Plan could cost as much as $775 billion.The president-elect has refused to put a price tag to the plan.
Congressional aides briefed on the measure say it is likely toinclude some $200 billion to help revenue-starved states pay forhealth care programs for the poor and other operating costs. Alarge part of the new spending would go for infrastructureprojects, blending old-fashioned road and bridge repairs with newprograms to advance energy efficiency and rebuild health careinformation technology systems.
Click for what?s on Gov. Paterson?s stimulus package wish list