Obama OKs changes in tax proposal

? Pushed by fellow Democrats, President-elect Barack Obama agreed to modest changes in his proposed tax cuts on Friday after inviting lawmakers to “just show me” ideas for fixing an economy shedding jobs at an alarming rate.

Democratic congressional officials said that Obama aides came under pressure in closed-door talks to jettison or significantly alter a proposed tax credit for creating jobs. Further, Democrats sought inclusion of relief for upper middle-class families hit by the alternative minimum tax. The so-called AMT was originally designed to make sure the very wealthy did not escape taxes, but it now hits many more people because of inflation, despite measures by Congress every year to prevent it from reaching tens of millions of middle-income families.

Congressional officials said aides to the president-elect had agreed to increase the $10 billion originally ticketed for energy tax breaks, although the final total remained unclear. Two officials said at least $20 billion would be reserved, but others indicated it could go higher.

Details were not available, but Obama has spoken in the past about increasing tax breaks for production of alternative energy sources such as wind power. The energy tax provisions make up a small part of a massive economic stimulus bill — expected to reach over $800 billion over two years — that congressional leaders hope to pass before mid-February.

With more than 11 million Americans out of work, Obama pressed Congress for action and said the U.S. is undergoing “a devastating economic crisis that will become more difficult to contain.” His warning was underscored by a government report showing that unemployment hit a 16-year high of 7.2 percent in December.

But congressional Democrats are making it clear they want to put their own stamp on the revival plan, despite the inevitable delays. Some Obama ideas, like a $3,000 job creation tax credit, might get scrapped.