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Obama plans huge tax cut

WASHINGTON: U.S. President-elect Barack Obama plans to include about $300 billion in tax cuts for workers and businesses in his economic recovery programme as he seeks to win over Congressional sceptics worried that he is too focused on government spending, according to his advisers.

The legislation Mr. Obama’s team is developing with Congressional Democrats will devote about 40 per cent of the cost to tax cuts, including his centrepiece campaign promise to provide credits up to $500 for most workers, costing roughly $150 billion. The package will also include more than $100 billion in tax incentives for businesses to create jobs and invest in equipment or factories.

The overall package of $675 billion to $775 billion is taking shape as Mr. Obama begins building support in Congress and among the broader public for his approach to stimulating the economy. Mr. Obama, who flew to the capital on Sunday to join his family in a hotel suite while awaiting his inauguration, plans to meet Congressional leaders on Monday and deliver a speech on Thursday laying the ground for his emerging economic programme.

Though some tax cuts were always expected to be included in Mr. Obama’s economic package, his team disclosed the scope and some details of the plans Sunday; at a time when Republicans have begun voicing criticism of what they describe as an open-cheque book approach to spending. By focusing more attention on the tax cuts in the plan, Mr. Obama’s aides hope to frame it as a balanced, pragmatic approach.

Mr. Obama will use his public events this week to promise what one adviser called “radical reforms” to impose more control over the regular federal budget down the road. Among other areas, the President-elect will focus on changing contracting by Pentagon and aid to corporate America, according to the advisers. He will also designate a chief performance officer and a chief technology officer on Wednesday to help make government more efficient.

Still, Democratic leaders in Congress acknowledged that the economic package would not be ready for Mr. Obama’s signature immediately after his inauguration January 20 as they once hoped.

“It’s going to be very difficult to get the package put together that early so that it can have sufficient time to be reviewed, and then sufficient time to be debated and passed, said Steny H. Hoyer of Maryland, the House majority leader. — New York Times News Service

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