January 12, 2008 in Nation/World

Clinton rolls out proposal for stimulating economy

Associated Press The Spokesman-Review
 

Key points

WASHINGTON – Here’s a closer look at Sen. Hillary Clinton’s stimulus proposal:

Deficit reduction. Clinton pledges fiscal discipline, but the $70 billion stimulus would be a one-shot deal with no budget cuts to pay for it. It would add to a federal deficit that closed the 2007 fiscal year on Sept. 30 at $163 billion. Because much of the additional spending would need congressional approval, it’s doubtful it would have an immediate impact.

Subprime adjustable-rate home loans. Clinton calls for a freeze to prevent variable rates from rising for five years or more. President Bush already has a volunteer freeze agreement in place with mortgage lenders. Clinton aides said that plan encourages a case-by-case approach while she wants the industry to adopt a blanket approach. This may be problematic, however, because investors who hold mortgage bonds aren’t of one voice in reworking troubled home loans.

Green tax credits. Clinton proposes a “crash weatherization program” to cut home energy costs and to expand tax credits for purchases of hybrid vehicles.

Home-heating assistance. Clinton proposes $25 billion in emergency aid to help citizens regain lost purchasing power for home heating. She notes that the buying power of energy grants fell in recent years amid rising oil and natural gas prices. She seeks to return purchasing power to its 2003 level.

Extending unemployment benefits. This is the one stimulus item that both parties already agree on. It would help the unemployed while they look for work and spur consumer spending. Clinton wouldn’t wait for a recession to be confirmed and would have this $10 billion in funding for the unemployed kick in immediately.

Tax rebates. Clinton proposes preparing $40 billion in tax rebates in case the economy falls into recession. President Bush and Congress already are weighing similar numbers, but Clinton’s rebate would reach all citizens instead of just some through lower tax rates.

– McClatchy

CITY OF COMMERCE, Calif. – Hillary Rodham Clinton on Friday called for Congress to pass an economic stimulus package that could cost as much as $110 billion to help low-income families keep their homes, to subsidize heating costs this winter and perhaps refund some taxes.

The Democratic presidential hopeful, on a two-day swing through this key Feb. 5 primary state, called on Congress to work with the White House to pass a $70 billion “immediate jump-start” to help people spend more money in the market and perhaps follow with another $40 billion in tax refunds.

“This economy may be working for some people, but it sure isn’t working for everybody,” said Clinton, standing in an International Brotherhood of Electrical Workers hall.

The New York senator has said she fears a recession, although she and aides do not label the current conditions that.

“The economists can argue about it – you can see them on TV,” she said. “The statistics are one thing. The stories are something altogether different.”

Clinton economic adviser Gene Sperling said the stimulus package would help lower-income families, who traditionally save less than those with higher incomes.


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