Obama Team Assembling $850 Billion Stimulus

[DeepModem Mom]

Source: Washington Post, Page One

President-elect Barack Obama and congressional Democrats have entered discussions over an economic stimulus package that could grow to include $850 billion in new spending and tax cuts over the next two years, a gigantic sum that some Democrats say could prove difficult to push rapidly through Congress.

A package of that size -- which would include at least $100 billion for cash-strapped state governments and more than $350 billion for investments in infrastructure, alternative energy and other priorities -- is a significant increase over the numbers previously contemplated by Democrats. It would exceed the $700 billion bailout of the U.S. financial system, as well as the annual budget for the Pentagon.

The potential for massive new spending has touched off a frenzy among interest groups eager to claim their share of the expanding stimulus pie. The profusion of requests from governors, transportation groups, environmental activists and business organizations is spawning fears that the package could be loaded with provisions that satisfy important Democratic constituencies but fail to provide the jolt needed to pull the nation out of a deepening recession.

An Obama adviser involved in crafting the stimulus package said the transition team was keenly aware of the potential pitfalls and was focused on funding ideas that would quickly pump money into the sagging economy, fulfilling Obama's promise to create or preserve 2.5 million jobs by 2011. Because many ideas probably won't meet that standard, the adviser said, the team is developing a screen to keep them out....

While that figure is larger than any previously discussed by Democratic leaders, it is within the range of recommendations from economists. Some, such as Nobel Prize-winning economist Joseph Stiglitz, have called on the government to spend as much as $1 trillion to combat rising unemployment and spur economic activity....

***

Obama also expects to include significant new tax cuts for the middle class, probably modeled on his campaign promise to lower the tax burden on workers, students, the elderly and families. The package could also include his proposal to offer tax credits to companies that create jobs, according to sources....

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/12/18/AR2008121804204.html?nav=most_emailed

[Belial]

1. 1 Trillion PLUS

They must be giving out Nobel Prizes to morons these days.. Someone tell me one thing the Govt has done on budget before.. I am sure you will be able to add a few hundred billion more to the tally when all said and done.. but if it helps.. go for it.

[MichiganVote]

2. None of this will do any good unless there is a drastic cut back on graft, bonuses, etc.

[marketcrazy1]

7. I listened to pelosi

the other night talking about this package and thought, this will take WAY to long to get up and running! they may create jobs ( eventually ) but even these so called "shovel ready" projects will take three to six months to start and months more to bring up to full employment levels. I am looking forward to receiving a nice fat "stimulus" check next fall as it becomes clear these "jobs" programs are too slow and the economy cant wait!!

[Amonester]

20. Luxury Hotels, Resorts, etc., Employ People Too.

You Know, Dishwashers, etc. People Who Do The Dirty (Shity) Jobs...

I Don't Want To See Them In UI Lines Too: I Say Raise Their Salary Instead

[closeupready]

3. You know, I'm beginning to feel that NOBODY actually believes in a free market,

like Michael Moore said - that they believe in socialism for themselves - banks; car companies; airlines; oil companies; defense contractors; powerful connected people - and free markets are for the little people.

And if the government is handing out free money, the line will quickly be out the door and down the freaking block with every blue chip organization known to man.

WHEN DOES THE CONSUMER COME FIRST? WHEN DOES THE TAXPAYER GET A HANDOUT?!

[phantom power]

14. The infrastructure spending is for "the people" -- boosts employment.

This is good. It's demand-side stimulus. It will help a lot more than the supply-side bailouts that are going on now.

[mentalslavery]

23. High capital investment in the base

the problem with all the economic stimulus packages is that they all assume a certain level of trickle down. This money needs to be invested in the mass production of solar panels/green energy, regulated low price to the consumer, and tax breaks for installation. It needs to be used to provide low-interest, fixed rate-government direct loans so that people can install panels on their roofs and in their yards.

It is possible to reduce cost of living dramatically with a plan like this because individuals can convert their cars to electric. Basically, if you install enough panels, then you eliminate utility and gas expenses. The elimination of utility and gas expenses is significant because both of those cost are irregular and cause personal and family budget crisis. Additionally, if you lose your job, your panels are still providing you some basic needs, unlike a utility company who will shut your shit off.

This plan should also direct solar energy/green energy to rental properties and affordable housing/public house structures providing the advantages to the individual and the family. This is part of a long term solution that will partially free the average person from the threat of living-condition-reduction because of unemployment.

What we need is an investment in our lives, that is a long term investment. Not checks. This plan can also accompany investments in individuals who would like to develop alternative energy or start business's that service alternative energy infrastructure.

The key problem is that this country must realize that we are not a market place or an economy. We are a country and as individuals we are citizens with rights. That is the most important thing. We need to start regulating corporate profits and de-centralizing business. It benefits the least among us to have large corporations. It is not important that someone makes lots of money and is rich and powerful. It is important that my neighbor can feed themselves. We need a functional economy that is based in what the needs of the average citizen are-an economy design to serve the citizens, not the citizens designed to serve the economy. What we have is one that is purposefully dysfunctional because it allows some to take advantage of those dysfunctions.

To respond specifically to the premise of your comment. No, they never believed in free markets. De-regulation is a regulation. If your read bills that are framed as de-regulation and in the spirit of the free market-It is basically just a bill that says these people can do this but these people cant or now a company can leverage at a different rate. Either way, it is still a regulation but commonly it was a regulation that allowed corporations to do more without oversight or penalty or some other benefit. Taking away a restriction is a regulation because it provides new parameters to some type of action. The only power the government has is to regulate, that is its purpose. Every act is an attempt to design society-however, designers commonly don't want the general public to have full understanding. The population is very high, thus many will be left out of the design and if they are aware of said designs, will resist. The free market bull shit was just a nice sounding narrative that distorted the consequences of legislation. If you ever have the opportunity to talk with a politician about de-regulation tell them you would like to apply the same principles to politics. Maybe we could outsource our representation to third world countries. I bet there is a rising star somewhere out there who actually wants to serve my interest and understands what it is like to be poor. Don't you think the invisible hand of democracy is the only regulation we need? Or how about I put a flag in my yard, declare myself a country and stop paying taxes and following laws. Why should I have to live in America just because I live in America?

[nc4bo]

4. 850B or might as well say nearly 1T is an astounding amount of money

so was that 750B (3+T if you count the blackholed 2T and what ever other money was slid into God knows whose coffers.)

Will it be enough? Where will this money come from?

My head just can't stop reeling over this economic mess.

[Baby Snooks]

13. Where will the money come from?

From your children and grandchildren. But, hey, as the Emperor would probably say, you won't be here so why should you care? No doubt the Empress would say the same thing. Both of them protecting their table. Not ours. And certainly not our children's tables and our grandchildren's tables. All the money will go to protect the Emperor and the Empress. And their own. The way it works in oligarchy.

And we are being lied to. The actual cost with regard to Federal Reserve loans as well as the various "emergency stimulus" moves is rumored to be around $10 trillion. So far. And Congress will add more. After all, they won't be here when the bill comes due. So who cares?

The middle-class needs the tax cuts. The middle-class will end paying more in taxes. The way it works in oligarchy.

We've been had as they say. The dynasty continues. Along with the oligarchy.

And Bubba of Arabia aka Bill Clinton will keep on riding the camels collecting what he can along with his sidekick the Secretary of State. With a little sign on the camel that says "Special Sale. Two for one."

While at home their administration sets things up for the 2012 election. The slogan has already been etched in stone. "If you'd elected me in 2008, we wouldn't be in the mess we're in."

Only thing worse than the Bushes is the Clintons.

[Sadie5]

27. Snooky, why don't you go back to the freeper board

When Clinton was president your sorry hide made a decent salary with health insurance. The Clinton years were times of prosper, not depression as the past 8 years have been. I bet you voted twice for the idiot you wanted to have a beer with.

[Drunken Irishman]

5. Who cares? I want to talk more about Rick Warren!

[bluestateguy]

6. We don't have time for Capitol Hill bullshit

I'm talking about hearings, markup sessions, conference committees, motions to recommit, press conferences, more hearings, meetings, amendments, etc.

This nation is in an economic emergency. And we don't have to waste on parliamentary procedural bullshit.

That bill should be waiting on President Obama's desk for him to sign right after the Inaugural parade.

[WriteDown]

8. United States Population is 303,824,640

That's 2797.67 per citizen. Please just STOP THIS MADNESS!!!!!!!!!!!!!!!!

[doc03]

9. I would think the drop in gas prices

would be enough stimulus.

[Donnachaidh]

10. where EXACTLY is the money coming from?

Jesus H. Kee-Rist on a cracker! I would dearly love a tax break, but he's already said he has no plans to go directly to upping the taxes on the wealthy -- so where is the MONEY coming from?

The economy is in the crapper, tax figures are down -- are they planning on borrowing MORE from other countries to do this?

I certainly want TRANSPARENCY before any of this goes anywhere.

[closeupready]

11. If it leads to inflation (if this is about simply printing money), then this is a back door flat tax

which will hurt those least able to afford it. Not exactly something one would expect of someone who fashions himself as a champion of the poor.

[dkofos]

12. He will need to do this for at least the next 4 years for the middle class

in this country to recover.

Thanks Regan, this is your legacy.

[customerserviceguy]

15. I don't know if anybody close to Obama reads this

but I understand that a major part of any stimulus package is making sure that the money gets spent on the economy right away, rather than being used to either pay down debt or get salted away in a savings account.

My humble suggestion is to eliminate the taxes on unemployment compensation. Thirty years ago, unemployment benefits enjoyed the same tax status as workman's comp and AFDC still enjoy today. Under the Carter Administration, high income earners ($20K for singles, $25K for married couples, and that was a lot of money in those days) started getting taxed, then under Ronnie Raygun, the limits dropped to $12K and $18K, respectively. Some years ago, they just started taxing it all.

Since consciencious people have the government withhold ten percent from their benefits to offset the effects of this taxability, eliminating the tax on this income (or going back to modified sensible levels before it is taxed) would give a very nice boost to those who were able to stop the withholding, without costing strapped state unemployment funds a single dime. No doubt these funds would be spent promptly in the hands of those suffering from job loss at this critical time.

[MasonJar]

16. Then do not give Paulson any more money, Congress. Show some mettle.

[Capt. America]

17. Why doesnt anybody ever talk about spending cuts to offset new spending?

What happened to pay as you go? How can the Dems seriously think that adding another trillion dollars to the already trillion dollars we spent over the last three months be considered a good thing when that was one of the 125,789 things I hated Shrub for; his outrageous spending and lack of a balanced budget. Look, I don't care if we have guns or butter, we can have a national discussion about whether we want empire or health care, but at least PAY FOR whichever one you choose. These guys have no regard for our money or the money of our grandchildren.

If we had saved a rainy day fund when times were good (i.e. surplus like we used to have)I would say spend it for a kick-start. Unfortunately, the "stimulus" that this spending will bring will not be offset by future taxes; thus, we will continue to roll the debt higher and higher.

[Johnyawl]

18. Cut what?

The ONLY budget item big enough to absorb cuts large enough to make a difference is defense, and cutting that is political suicide.

And we can't balance the budget if we're not allowed to tax wealth. period. And Obama has already been scared away from his promise of rescinding the bush tax cuts, forget actually raising taxes on wealth to pay for two wars and an economic stimulus.

[razors edge]

21. Defense cuts are only a problem if

they don't bring this situation under control in time for the next election.

If they do however relieve the pressure on this cooker and realign the economy, then it is a whole new ball game.

I would take that gamble in a heartbeat since there is no other viable option.

Putting all your eggs in one basket is dangerous, but it does make it easier to focus on the baskets in play.

If we don't cut the defense money the basket we will be most concerned with will be the one we are riding in and it's hot, southerly destination.

[Capt. America]

22. Three tiers for saving money...

1) Peace dividend: consolidate forces, stop the Iraq occupation, cut the nuclear arsenal in half, go through line by line of spending.
2) Rescind Bush's tax cuts on wealthiest Americans; its time for them to pay their share, they have been winners under Bush for years, they should have socked some of their earnings away, if not, too bad for them.
3) Entitlements: get a commission together to figure out savings in SSA, medicare, VA, etc., and have one up or down vote, like SSA reform in the 1980's.

[juajen]

25. Please do not call SS an entitlement. We have paid and paid and paid

for SS for many years, and now our children, five of them are paying SS taxes for us. Social Security is a brilliant system. We just need to make them stop stealing the funds we pay in. SS is fine. It needs to be left alone; but because the amount paid in is so large, the politicians can't resist playing with it, and using it for things it was not supposed to be used for. You have no idea how hard it is to live on SS. My husband was disabled at age 43, and needed my care for years and still does. SS is our lifeline so, i say again, LEAVE IT THE HELL ALONE. We have not received adequate cola increases for the past eight years, so we are behind in what we should be earning. Our increase for 2009 is larger than usual so Bush looks better. Bah on him, may his name go down in infamy.

I'm well aware of the need for trimming the sales of the SS administration, and also medicare, especially the drug benefit. We pay plenty of money into medicare, which should pay more than it does. Streamline this would be a great idea also, not to mention bargaining with drug companies for lower drug costs.

In spite of many people complaining and trying to obtain new legislation, the pentagon spends way too much money, and, IMHO, this is where cuts need to be made, not to the weakest and neediest among us.

[Capt. America]

26. agreed

In spite of many people complaining and trying to obtain new legislation, the pentagon spends way too much money, and, IMHO, this is where cuts need to be made, not to the weakest and neediest among us.

I agree wholeheartedly. There is sooo much waste hidden in the defense budget and with the wasteful monies spent in Iraq with government contractors. However, I believe there is waste in all government agencies that needs to be cut. I am not inherently anti-government spending, I know it is necessary sometimes. Rather, I am against wasteful government spending. I work with the DOL in a compensation program and believe me, there are LOTS of people getting money that don't deserve a dime of it. I truly hope Obama's OMB guy really does "take a scalpel" to the budget. As a taxpayer, I expect nothing less.

[Johnyawl]

28. 3) Entitlements:

"get a commission together to figure out savings in SSA, medicare, VA, etc., and have one up or down vote, like SSA reform in the 1980's"

As the poster who replied to you about SS stated, there is more than enough money coming into SS, we just need to keep the politicians from spending it. We should be investing the surplus SS is generating in AAA infastructure bonds. 20-30 year bonds to build highways, bridges, mass transportaion and goverment buildings. It would keep the SS surplus out of the general fund, stimulate the economy, earn interest, and be repaid over 20-30 years, when we're really going to need it.

medicare, medicaid, VA, etc, etc. All of these programs could be eliminated by going to single payer national health insurance. And single payer national health insurance could be paid for the same way SS is, by a seperate, designated payroll tax that everybody pays based on their income.

And I agree with you that solving the economic crises and laying the ground work for a secure and stable US economy would offset the political damage done by cutting defense spending, if we could see dramatic results before the next election cycle. I just don't think that the current Democratic leadership - including PE Obama - has the cojones for that kind of gamble.

[nsd]

24. If you offset the new spending with spending cuts, then you're not stimulating the economy.

You're just treading water in that case. The whole point of the new spending is to pump cash into the economy quickly, to minimize the severity of the recession and speed the recovery. Unfortunately, that does require increasing the deficit. It creates problems down the line, but the immediate problems we face necessitate this.

[madrchsod]

19. a trillion would be nice but 850 is a start

there has to be a made in the usa content provision to create jobs..

[Jack_DeLeon]

29. Cool, are we going to be getting another $600 check? How about bump it up to an even $1K.

lol. :)