Democrats unveil $825bn in stimulus spending - Emirates24|7

Democrats unveil $825bn in stimulus spending

People walk past a vendor displaying T-shirts featuring pictures of US President Barack Obama in Washington, DC. Obama warned on Friday, the economic crisis may be unprecedented, and must be dealt with rapidly, as he nudged Congress to meet a mid-February deadline to pass a huge stimulus bill. (AFP)  

US Senate Democrats on Friday unveiled their version of a massive economic stimulus proposal that, like its counterpart in the House of Representatives, would provide new emergency spending and tax cuts totaling $825 billion (Dh3.04 trillion).

The Senate Appropriations Committee outlined $365 billion in spending under its jurisdiction to try to pull the US economy out of its more than yearlong recession. That figure is just slightly more than the $358 billion approved this week by the House Appropriations panel.

"These investments will not only create jobs now, but will also address neglected priorities here at home and lay the foundation for economic growth in the long term, said Sen Daniel Inouye, chairman of the committee.

Congress is rushing to meet a mid-February deadline that President Barack Obama has set for passage of a stimulus measure. Both sides said on Friday they expected to have a package ready for Obama to sign by that deadline.

But they continued to disagree on details. Republicans complain the Democrats' measures contain too much spending. They are calling for more tax cuts, which they said would better spur job growth and help revive the economy.

Earlier on Friday, Senate Finance Committee Democrats put forward $275 billion in tax cuts, an amount identical to the tax cuts being sought in the House. Other committees will oversee details of the bill that would bring its total to $825 billion.

Next week, the Senate Appropriations Committee is expected to debate the huge spending bill and the full House hopes to pass its version.

Amid Republican complaints it would take years to spend a large portion of the funding, the Obama administration released a letter that said it wanted at least 75 per cent of the money spent by September 30, 2010.

"Everybody believes that government's action is necessary," Senate Minority Leader Mitch McConnell said in a speech to the National Press Club. "It will happen and I think it will happen before the anticipated week off in February."

He questioned whether Republican ideas would be adopted in the Democratic-controlled Senate and House, but said he believed Obama was open to them. "We will see, as we go along, how many of them are incorporated."

Republicans handed their alternatives to Obama at a bipartisan White House meeting and planned to press their ideas when the package comes to a House vote on Wednesday. Obama will visit Capitol Hill again next week to push for the package.

 

TAX BREAKS

The Democratic tax cut plan would direct benefits more toward lower-income workers, even those who do not pay income taxes, while the House Republicans would help all taxpayers.

The Republicans do not yet know the cost of their plan.

The House Republican proposals include cutting the lowest two income tax brackets, to 10 per cent from 15 per cent and to 5 per cent from 10 per cent, while offering small businesses a tax deduction equal to 20 per cent of their income.

Democrats have proposed a tax cut of $500 for individuals earning up to $75,000 and $1,000 for families earning up to $150,000. Republicans said their plan would give families an average of $1,700 in savings.

The Republicans also proposed helping those who have lost their jobs by eliminating taxes on unemployment benefits. They also urged that the legislation bar higher taxes to pay for the anticipated increased spending.

Senate Finance Committee Chairman Max Baucus unveiled the Democrats' draft of their tax stimulus bill to be considered next week. Totaling $275 billion in tax breaks and incentives, it had many similar elements to the House package and included $30 billion in tax cuts and incentives for the energy sector.

The top Republican on the panel, Sen Chuck Grassley, said he would try to include a fix to the Alternative Minimum Tax, which was designed to ensure wealthy people did not take advantage of so many tax breaks that they paid no taxes. But more middle-income families are being hit by it.   

 

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