Obama allies to reveal $850 billion stimulus bill
Barack Obama's allies in the House are poised to reveal his $850 billion economic recovery bill on Thursday, though it'll hardly be the final word on how the debate turns out.business Updated: Jan 15, 2009 11:39 IST
President-elect Barack Obama's allies in the House are poised to reveal his $850 billion economic recovery bill on Thursday, though it'll hardly be the final word on how the debate turns out.
Originally pegged at $725 billion to $775 billion, Obama's plan has grown after negotiations with Capitol Hill Democrats and will face pressure to grow further still as it moves through the spending-friendly Senate. The introduction of the massive measure is but the first official step in a long debate that will last into mid-February or beyond.
A debate over whether to use the economic recovery package to shepherd into law a tax cut for middle- to upper-income taxpayers is among the major differences between the House and Senate. Rep Charles Rangel, chairman of the tax-writing House Ways and Means Committee, said lawmakers in both the House and Senate want to use Obama's stimulus package to make the annual fix to the alternative minimum tax to prevent more than 20 million additional tax filers from having to pay it.
But making that fix for one year alone would have cost about $70 billion, taking a healthy chunk out of the approximately $300 billion that Obama has set aside for tax cuts. Now, Democratic aides briefed on the details but demanding anonymity to speak frankly, say the soon-to-emerge $850 billion stimulus plan is unlikely to address the minimum tax, at least in the House version likely to be revealed on Thursday.
A $3,000 job-creation tax credit proposed by Obama, which drew strong objections as unworkable, still appears likely to be jettisoned from the Obama plan, Rep Charles Rangel said. But a pro-business provision that would allow companies posting losses last year to get refunds for taxes paid as far back as five years earlier now sounds more likely to win inclusion in the relief package after talks on Wednesday.
The alternative minimum tax was designed in 1969 to make sure wealthy taxpayers pay at least some tax. But it never was indexed for inflation and therefore threatens to trap millions of people for whom it was never designed.
The largest components of Obama's plan include $85 billion to $90 billion for cash-strapped states to help pay for the Medicaid health care program for the poor and disabled. Another $80 billion or so would go into a block grant to states for education, which Sen Charles Schumer, said would prevent cutbacks in school programs, layoffs and property tax increases.
There's also about $25 billion to pay for subsidies to help laid-off workers hold onto their health insurance, $35 billion to extend unemployment benefits and a 15 per cent increase in food stamp benefits costing $20 billion.
Infrastructure spending, especially popular with rank-and-file lawmakers, is set for a big increase. Rep John Olver, who chairs the panel funding transportation projects and public housing, said he had at least $55 billion on such projects. But other ideas, such as improving the nation's electrical grid, also are getting funded. The recovery bill has set off a feeding frenzy in Washington as lawmakers across the spectrum press for add-ons. Sen Arlen Specter, wants new health research funds, while Rep Anthony Weiner, claimed credit for $1 billion worth of police hiring grants, which he hopes would create 13,000 jobs.