WASHINGTON — President-elect Barack Obama plunged into pre-inaugural crisis talks with congressional leaders Monday, declaring the national economy was “bad and getting worse” and embracing tax cuts now expected to reach $300 billion. He predicted lawmakers would approve a mammoth revitalization package within two weeks of his taking office.
If the two-year plan is enacted, workers would see larger paychecks almost immediately because taxes withheld by the government would drop.
“The economy is very sick,” said Obama, who met privately with leaders of both parties at the Capitol. “The situation is getting worse. … We have to act and act now to break the momentum of this recession.”
Obama, who takes office in two weeks, said, “I expect to be able to sign a bill shortly after taking office.” Pressed on the timing, he said, “By the end of January or the first of February.”
Obama’s proposal to stimulate the economy includes tax cuts of up to $300 billion — including $500 for most individuals and $1,000 for couples if one spouse is employed, retroactive to Jan. 1 — as well as more than $100 billion for businesses, an Obama transition official said. That provision would cost $140 billion to $150 billion over two years.
New federal spending, also aimed at boosting the moribund economy, could push the overall package to the range of $800 billion or so. About $77 billion would be used to extend unemployment benefits and to subsidize health care for people who have lost their jobs.
The rest would go toward job-creation projects such as roads and bridges and toward long-term goals such as alternative energy programs.
Aides have said the package Obama has dubbed the American Recovery and Reinvestment Plan could cost as much as $775 billion. The president-elect has refused to put a price tag on the plan, and some members of Congress expect it to go higher.
After meeting with Obama, House Minority Leader John Boehner, R-Ohio, said he was concerned about the plan’s cost.
“This is not a package that’s ever going to be paid for by the current generation,” Boehner said. “It’s being paid for by our kids and grandkids.”
Republican lawmakers want more details, Boehner said, but he replied “yes” when asked if he expected a stimulus plan to be enacted within six weeks.
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