Biden: Deal Near on Economic Stimulus Plan

December 23, 2008 06:00 PM
 

via a special arrangement with Informa Economics, Inc.

Obama's top economic planners meet on coming stimulus package

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


The incoming Obama administration is nearing agreement with congressional Democrats on a huge emergency spending bill intended to jolt the weak U.S. economy and create 3 million jobs over two years, Vice President-elect Joe Biden said on Tuesday.

Asked whether an agreement on the shape of the stimulus bill would be reached by Christmas, Biden said: "I think we're getting awful close to that." But he did not detail how much the measure would cost once the team of President-elect Barack Obama takes office on January 20, with Congress considering the measure as soon as Jan. 6. Conjecture about the total cost runs from $650 billion to $850 billion over two years.

Reacting to the worsening economy, which the government on Tuesday said shrank by an annual rate of 0.5 percent in the third quarter, Biden said the incoming administration has had to raise its job-creation goals to 3 million, from earlier projections of 2.5 million, over the next two years. "This has to be substantial," Biden said of the stimulus plan. "It has to create jobs immediately." He added that 85 percent of the jobs created would be in the private sector. Much of the spending will be directed to "critical investments in the nation's roads and bridges," he said.

"We're all getting very close to an overall number and we're getting close to the specific kinds of investment," Biden said, adding that the new administration and congressional leaders are very close to agreeing on the size of the stimulus package, and where the money will go. He said Obama and his advisers want to spend much of it to rebuild the nation's infrastructure. "This plan will be focused on making investments in health care, education and energy, among other areas. And it will be directed at critical investments in the nation's roads and our bridges," he said. "I know there is some talk of us investing in programs that are already in existence. But we have let our infrastructure crumble for a long, long time - from water to roads to bridges - and it makes sense to invest in them now."

Jon Corzine, Democratic Gov. of New Jersey, in an op-ed item in today's Washington Post, wrote that for every billion dollars spent on infrastructure, upwards of 20,000 people are put to work. Corzine said the stimulus should be roughly divided into five categories: infrastructure, counter-cyclical programs, housing, education block grants and middle-class tax cuts.

In one of the first internal struggles of the Obama administration, environmentalists and smart-growth advocates are trying to shift the forthcoming stimulus package away from traditional infrastructure spending to more projects that create “green-collar” jobs, the Washington Post reported.

The stimulus package will also include a "down-payment" for the tax cut "that we've promised for the strapped middle class," Biden said.

Biden met with seven advisors for an hour as Obama vacationed in Hawaii. Members of Obama's economic team attending the session at the Washington transition headquarters included Lawrence Summers, director of the National Economic Council; Carol Browner, environment and energy czar; Jason Furman, economic policy coordinator for the Obama campaign; Jeanne Lambrew, deputy director of Obama's White House Office of Health Reform; Melody Barnes, director of the Domestic Policy Council; Phil Schiliro, congressional liaison; and Jared Bernstein, Biden's economic advisor.

Biden singled out special-interest projects. "There will be -- I will say it again -- there will be no earmarks in this economic recovery plan," he said. "I know it's Christmas. I know it's the Christmas season. But President-elect Obama and I are absolutely determined that this economic recovery package will not become a Christmas tree."

Lobbying for inclusion in the coming package continues. Retailers sent a letter to Obama's team Tuesday proposing that up to $25 billion in stimulus money be set aside for sales-tax holidays stretched over 30 days in 2009. The federal government would use stimulus money to reimburse states for suspending sales taxes during these periods, under the plan laid out by the National Retail Federation.

At Tuesday's meeting, Summers said: "Without substantial policy action, we would almost certainly face the worst economic downturn since the Second World War. That's why it is imperative that we take action to maintain demand, to maintain jobs, to maintain incomes."

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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