Economic team refines stimulus package
Biden promises earmark-free plan
WASHINGTON – Amid a drumbeat of grim economic reports, President-elect Barack Obama’s top economic advisers met Tuesday to refine plans for a massive stimulus proposal, promising the money would not go toward dubious pork-barrel projects.
Vice President-elect Joe Biden met with seven advisers for an hour here as Obama vacationed in Honolulu. With the incoming administration conceding the stimulus plan could cost as much as $775 billion over two years, Biden seemed intent on reassuring Americans the money would not be wasted.
Transition team advisers described plans to shore up decaying bridges, roads and schools that have long been neglected – part of an effort to build a broad public consensus and win a swift victory in Congress. Obama’s team hopes the president-elect signs a stimulus bill soon after he is sworn in Jan. 20.
“It’s important for the American taxpayer to know that … this is not going to be politics as usual,” Biden told reporters. “And we will not tolerate business as usual in Washington.”
Biden singled out special-interest projects. “There will be – I will say it again – there will be no earmarks in this economic recovery plan,” he said. “I know it’s Christmas. I know it’s the Christmas season. But President-elect Obama and I are absolutely determined that this economic recovery package will not become a Christmas tree.”
Reviving the troubled economy has become the incoming administration’s central focus. Data released Tuesday underlined the severity of the economic slump. The Bush administration reported that gross domestic product had contracted by half a percentage point in the quarter ending Sept. 30 – the largest decline since the third quarter of 2001, in the shadow of the Sept. 11 attacks.
Anticipating a bleak year, retailers sent a letter to Obama’s team on Tuesday proposing that up to $25 billion in stimulus money be set aside for sales tax holidays stretched over 30 days in 2009. The federal government would use stimulus money to reimburse states for suspending sales taxes during these periods, under the plan laid out by the National Retail Federation.
“At this point it appears the economy is going to remain weak well into 2009,” said Rachelle Bernstein, a federation official. “So doing this can provide that additional boost that may be needed.”
At Tuesday’s meeting, Lawrence Summers, whom Obama has named director of the National Economic Council, said: “Without substantial policy action, we would almost certainly face the worst economic downturn since the Second World War. That’s why it is imperative that we take action to maintain demand, to maintain jobs, to maintain incomes.”
Biden reiterated that the incoming administration has revised its early goal of creating or saving 2.5 million jobs over the next two years. With economists projecting a grim year ahead, Obama recently insisted the number be raised to 3 million.
“Economists rarely agree, but on this score, there is overwhelming agreement that we need a robust and sustained economic recovery package,” Biden said. “There’s virtually no disagreement on that point with economists from left to right. The greater threat to the economy lies with doing too little.”