WASHINGTON, December 21 – US President-elect Barack Obama and Democrats in Congress hope to have an economic stimulus package as big as 850 billion dollars ready when the White House changes hands January 20, putting the economy at the top of the agenda.
The stimulus plan will be "the top priority in the first 100 days of the next Congress," which convenes in early January, House of Representatives Majority leader Steny Hoyer told a press conference last week.
Still tanking despite a 700-billion-dollar Wall Street rescue plan signed last month by President George W. Bush, the US economy has been the foremost concern of Americans before and after the November 4 presidential election.
"What we\’ve seen, in terms of the evaluation of economists from across the political spectrum, is that we\’re going to have to be bold when it comes to our economic recovery package," Obama told reporters on Friday.
Otherwise, he added, "you could see the economy continuing to decline at a pretty rapid clip…. That is not acceptable to me. I don\’t think it is acceptable to the American people."
He refused to provide a dollar figure for the recovery package but said he would ignore the growing budget deficit until the economy is out of the hole and working again. Only then, he added, would he turn his attention to balancing the budget.
According to US media, Obama\’s team is looking to craft a package worth between 675 and 775 billion dollars over two years, but it could build substantially to 850 billion as it moves through the legislative process. Some think it could reach one trillion dollars.
He also will seek to create or save three million jobs over the next two years instead of the 2.5 million jobs he promised to create last month, newspapers reported Sunday, citing unnamed Obama advisers.
The adjustment of the goal followed economic forecasts that 2009 job losses could be double the total this year and could push the nation’s unemployment rate past nine percent if nothing is done, the reports pointed out.
"I think we need a big stimulus to get the economy back on track, or at least to mitigate the damages" of the ongoing recession, Brookings Institution think tank economist Alice Rivlin, a former budget manager for president Bill Clinton, told AFP.
"This is going to be a very serious recession and I think, in the near term, the most we can hope for is to make it less bad," she said, adding that even with a big injection of government cash it will take time for the economy to heal.
Once the stimulus package is launched, Congress plans to finish the 2009 budget, confirm the middle-class tax cuts Obama promised during his election campaign and tackle health care.
Senators and representatives of the new Congress, however, will not deal with these issues before taking care of the economy.
They hope to have a stimulus plan drawn up and ready when Obama is sworn in as president on January 20. But the staggering amount under consideration is likely to dampen their eagerness.
"Fiscally conservative Democrats, and I am one, would be more likely to negotiate a smaller amount," said Rivlin.
She would prefer the plan be broken down in two or even three parts, the first of which would promote job creation, for example, by boosting state coffers to help improve existing infrastructures such as roads and bridges.
Creating new infrastructure, the economist said, would take longer.
At the beginning of the year, Bush proposed a 168-billion-dollar tax incentive to boost the economy, which took some arm twisting to get through Congress.
After the financial crisis broke in September, lawmakers called for a second stimulus plan to help the economy but faced stiff resistance in the White House before it was finally approved.