Washington President-elect Barack Obama plunged into rare 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 break would be retroactive to Jan. 1, and couples receiving a $1,000 tax cut would begin receiving an extra $40 in twice-monthly paychecks as the government tries to spark more consumer spending.
“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 two weeks from today, has said there can be only one president at a time — and he repeated that principle Monday “when it comes to foreign affairs.” But when it comes to the floundering economy, he clearly feels he cannot sit by until the swearing-in.
“The reason we are here today is because the people’s business cannot wait,” Obama said as he arrived on Capitol Hill.
“I expect to be able to sign a bill shortly after taking office,” he said.
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 — as well as more than $100 billion for businesses, an Obama transition official said. The total value of the tax cuts would be significantly higher than had been signaled earlier.
New federal spending, also aimed at boosting the moribund economy, could push the overall package to the range of $800 billion or so. Some $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.
Meeting with Democratic House Speaker Nancy Pelosi, Obama set a tone of urgency for dealing with a financial situation that he described as “precarious.”
He said, “The speaker and her staff have been extraordinarily helpful in working with our team so we can shape an economic recovery plan and start putting people back to work.”
But he also met with Republicans in an effort to build broad support for quick action.
“This is not a Republican problem or a Democratic problem at this stage,” he said. “It is an American problem and we’re going to all have to chip in and do what the American people expect.”
At his meeting with bipartisan leaders of Congress, Obama said he would make his stimulus proposal available on the Internet, with a Google-like search function to show each proposed project or program, by congressional district, according to three people who attended.