WASHINGTON – Congressional Democrats are putting the final touches on an economic stimulus package that will cost almost $850 billion, hoping to have the details of the legislation ready in time for President-elect Barack Obama to promote it on a trip to Ohio on Friday in which he hopes to build public support for the recovery plan.
With the cost estimate almost tripling since shortly after Obama’s November election victory, the stimulus plan is expected to include at least $300 billion in tax cuts and close to $550 billion in domestic spending, making the pricetag of Obama’s first major legislative initiative almost equal to the annual cost of funding all federal agencies.
Democrats vowed to support the broad outlines of Obama’s initial ideas, but they continued to alter the details of the massive economic recovery plan. Support continued to slip for his tax-relief proposals for businesses – which were initially intended to appeal to Republicans – and preliminary spending plans showed more than half of the new domestic spending would go to the states to provide budget relief for health, labor and education services.
House Speaker Nancy Pelosi, D-Calif., told reporters that she hoped to unveil the plan today and have her committee chairmen take up the tax and spending packages late next week, with the goal of sending the new president a final product for his signature by mid-February.
Obama plans to tout the stimulus proposal Friday at a wind-turbine manufacturer in Bedford Heights, Ohio. The destination is steeped in symbolism both politically (Ohio provided critical support to Obama in the general election) and for its policy significance, because Obama and Pelosi have deemed renewable energy funding a hallmark of the stimulus plan.
On Tuesday Obama attended the weekly luncheon of Senate Democrats and mounted a strong defense of his plan to include $300 billion in tax cuts in the proposal. “We can’t do it all with spending. We have to have tax cuts,” he told Democrats, according to Sen. Joseph Lieberman, I-Conn., who supports the plan.
But the form of his proposed tax cuts have come under steady fire from congressional Democrats as they put their own cast on the plan. Democrats objected to a proposed $3,000 tax credit for businesses that saved or created a job, which many considered too ambiguous to implement.
In place of business credits, Democrats expect to include a “patch” for the Alternative Minimum Tax, a provision meant to prevent upper middle class wage earners from moving into a higher tax bracket.