Democrats Criticize Obama's Proposed Tax Cuts

WASHINGTON — President-elect Barack Obama's proposed tax cuts ran into opposition Thursday from senators in his own party who said they wouldn't do much to stimulate the economy or create jobs. Senators from both parties agreed that Congress should do something to stimulate the economy. But Democratic senators emerging from a private meeting of the Senate Finance Committee criticized business and individual tax cuts in Obama's stimulus plan.

They were especially critical of a proposed $3,000 tax credit for companies that hire or retrain workers.

"If I'm a business person, it's unlikely if you give me a several-thousand-dollar credit that I'm going to hire people if I can't sell the products they're producing," said Sen. Kent Conrad, D-N.D., a member of the committee.

"That to me is just misdirected," Conrad said.

Sen John Kerry, D-Mass., said, "I'd rather spend the money on the infrastructure, on direct investment, on energy conversion, on other kinds of things that much more directly, much more rapidly and much more certainly create a real job."

The cost of the economic rescue package Obama wants is expected to swell to $800 billion or more. About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.

One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making them about $10 to $20 larger each week.

Sen. Ron Wyden, D-Ore., said he doubted that a modest tax cut would change consumers' spending habits.

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"In tough times people don't respond all that well to marginal changes, such as a small amount of money added per paycheck," Wyden said.

Democratic Sen. Max Baucus of Montana, chairman of the Finance Committee, said he hopes to schedule a committee vote on the stimulus package in about two weeks, which would coincide with the week of Obama's inauguration. Many senators still hope to approve a package by mid-February.

There is "general agreement that because of the recession we've got to move, we've got to move quickly, very quickly," Baucus said.

He added that it is too early to pass judgment on any aspect of Obama's plan.

"This is an early part of this whole process. A lot of preliminary questions are going to be asked," Baucus said.

___

Associated Press writer Andrew Taylor contributed to this report.

(This version CORRECTS to Sen. Wyden instead of Rep. Wyden.)

Comments

[hortonhearsawho2]

You had your " rather " Kerry and you lost...

[sammy cole]

As supportive as I am of Obama and his appointments so far.....I think that offering the populous a $500 tax cut or families $1,000 is a SLAP in the face, completely INSULTING after all the talk about the billions and billions handed off to wallstreet and banks...which IS debt piled on to the same individual or worker. The article suggests that through reduction in tax withholdings it could increase a paycheck by $10 or $20. I feel embarrassed that THIS is what families MAY GET. Financial institutions took this country DOWN and got BAILED out in the BILLIONS but the populous suffering from it gets POCKET CHANGE?????? I think that NEXT Trillion our Govt decides to HAND OFF ...should be in the form of REBATES to American Individuals for the purpose of helping them PAY OFF THEIR DEBT.......before they're encouraged to GO shopping to CONSUMER MORE CHINESE JUNK.

[Jazzcomedian]

No matter how popular PE Obama is, and how necessary the stimulus plan is, it is still going to have to go through the legislative process--which has often been called a "sausage factory". With 100 Senators and 535 Representative all trying to have a say in it, it was never going to be easy. We didn't elect PE Obama because we thought it would be easy to translate his promises into policy, we elected him for his perceived ability to skillfully navigate his agenda through this Congressional labyrinthe. That's where we will get a chance to see his skill or not. His hires have all been smart experienced people good at navigating through this process--Rahm, Biden, Panetta, Daschle, Clinton, Summers etc. That shows me he's focused on the smartest ways of actually getting things done.


Been reading "The Agenda" by Bob Woodward, a day to day account of Clinton's first year, and what he had to do to pass his economic recovery act. The economic parallels are striking, but the Republicans refused to work with him due to proposed tax increases, and he had to pass it with only Democratic votes. It passed in the Senate by one vote. Reading about all the dealmaking, and compromise necessary with just the Democrats gave a clear picture of the legislative process, and what PE Obama has to navigate. I think his intelligent, no-nonsense, yet collaborative bi-partisan approach is going to actually create better legislation.

[DaveC19]

Tax cuts are a dumb idea. For one thing no job means no paycheck means no taxes means you get NOTHING if you are unemployed. Contrast this to the rich and well off who will get a big windfall from more tax cuts (this is why the Repubs LOVE this tax cut plan). So we balloon the deficit to make the rich richer. If you are lucky to still have a job and are middle class you get an extra $10.00 or so a week. BFD, don't spend it all in one place. This is the opposite to what we need now.

We need to create jobs to help the middle/working class and the economy. The money would be better spent there.

[DontJustFollow]

Maybe if you are unemployed what you need to do is go out and get a job. I guess I missed the memo that says it is now the government's responsibility to give you a job.

Obama did not get into office so he could give you a job. People with jobs are not "lucky", they are employed. If a person is layed off his first responsibility should be to get another job not look to the government.

I think the republicans like the tax cut because they understand that letting people (right or left) keep more of the money they earn is always better - Remember, the money we earn belongs to us, not the government.

Obama is starting to see the light I think.

[flossophy]

Obama has a choice... behave like FDR or Rea-gan?

FDR 1932 = 8 years De-pression, over 14% unem-ployment throughout, indoct-rination of generations of schoolchildren in New Deal prop-aganda, and cementing a dependent class (voting bloc) that lasts to this day.

Rea-gan 1980 = 2 years recession, 20 million new jobs, across the board tax cuts of 25% (lowering the highest rate from 70% to 28%), and an economic ex-pansion that lasted 25 years (highest sustained growth in the history of human-beans).

I know it's a tough choice... considering how difficult it is to go against one's core beliefs. But we all get to sit here and watch ideas / ide-ology be put into action...

brace yourselves.

[Jazzcomedian]

False prospertiy based on mindless consumption with borrowed money with stagnant income growth resulting in mass national insolvency. That's the result of 28 years of Reaganism, which ushered in the absurd economic philosophy of borrowing and spending with no savings. No financial adviser wouldn't advise a person to live like that, so why should a government?

[flossophy]

"false prosperity" is a new one... interesting. As opposed to "true prosperity" under the New Deal?

The deficits were eliminated toward the end of the 90's... they can be eliminated again with economic expansion. But i guess that would be a "false economic expansion" to you.

Jazzcomedian... count yourself as one of those indoc-trinated schoolchildren. You cannot escape the historical record and wash away rea-gan-ism.

I agree with you on profligate borrowing... but keep in mind that it was government policy and Fannie & Freddie which enabled such activity (in real estate). Had they not intervened - we would not be in this crisis today. The record will also show that Bush tried to regulate FM&FM several times - and the Democrats vigorously blocked him.

[deneufeldt]

What is the matter with the Dems?

First Diane Feinstein gets her nose out of joint re: Leon Panetta, then Harry Reid says he does not work for Obama and today John Kerry gets out in front of cameras to say he does not like Obama's financial package and Nancy Pelosi tells the press she is going to discontinue Bush's tax cuts by year end. Hello??? Who voted for them to be President?

If all these people keep mouthing off before Obama takes office, I can't wait to see what they say after he is sworn in. Give the guy a break. He has offered them the opportunity to give their ideas and input. Instead they run to the press and make themselves into a story. Thank god we have an adult for a President. Aren't they listening him? We need voices of reason not of ego.

[ILibertine]

Amidst hundreds of billions mysteriously doled out to financial firms that cannot add and subtract, billions being tendered to auto makers that can't plan strategically; and every imaginable entity with their hand out to Uncle Sam; the plan would evidently get a $500 stimulus and/or $10-20 additional take home per week to the harried individual. A windfall!

Home values depressed, investments tanked, credit card rates, grocery prices, health care, insurance and medication costs out of control (oil will be); I don't see how a few hundred lump and chump change is going to make a difference anymore than the summer's "stimulus". There'd better be some powerful economic Viagra in other parts of the plan to make a difference. I think the policy-makers are so far lost in the Washington bubble that they haven't a clue about the depth of the problem, save for the corporate paupers at their oak doors.

I don't know where enough funds to "make a difference" can come from without significant damage to the value of our buck; although consumers must have some liquidity and incentive to save - that is a long way off. Sadly, it seems Iraq has been a parallel disaster to that of the carnage of our economy - the result of a negligent government and too-easily deceived and appeased voters. I suggest the majority of future expenditures needs to get into individual hands - trickle-up on a grand scale rather than this frivolous trickle-down.

[plwood01]

That is what Obama ran on and he said a "redistribution of wealth is needed," trickle down does not work, so why not try trickle up for a change, that is obviously a true interpretation of what would work, at least better than the other way around! What can any American do with 10 or 20 dollars to give them incentive to do anything but save it! How does that stimulate our economy? The trouble is we have too many wealthy people in there who are looking out for their own bank account than they are worrying about yours and mine. The only answer is for more main street, main stream people need to get involved and run for these offices themselves. The representation at all levels until now did not reflect the country nor the citizens issues. We need to remove career politicians, limit terms and lower the cost of the running so that regular people can run for office and win! It seems that our government is a pawn for those who seek to maintain the status quo against the people's wishes. All of these people there now, won't be there in two years, so they really need to get over themselves.

[lioness99]

The proposed stimulus plan calling for investment in human capital via infrastructure tied to energy, education, and transporation is great. But a counter-intuitive approach is needed to deal with tax cut issues. Obama should asks citizens and businesses alike to endure curent tax levels until 2010, since experts claim that a tax increase would be disastrous; returning to trickle-down Reagonomic, now, that's disastrous. Let the Bush tax cuts expire. The call for sacrifice should begin with a new approach to tax policy. If asked to make sacrifices to invest for future generations, I'm sure most Americans would.

[plwood01]

The tax laws need to be rewritten based on the current economy and situation of Americans rather than using codes from the 1980's or 1990's. They know that is needed and said that it was. Raising taxes now will not happen and Obama has said that too. He is trying to relieve the tax responsibility for the middle class, people who at this time cannot afford to pay more taxes. In fact, Obama plans on reducing tax liabilty for 95% of the population, everyone making under $250.000 or $200,000 respectively. He will not revert back to trickle down he wants to redistribute the wealth in this country, rich people will resist and Congress is full of the rich so they are protesting to protect themselves. Once Obama sits them down and tells them either lead, follow or get out the way, you will see some retirements and firings! Senators who feel that their job is for a lifetime, we cannot do without them and we are stupid enough to allow them to pull the plug on America and the American people while they ride off into the sunset to retire in the South of France or Bora Bora won't get away! Not happening this time folks!

[IntelligentDesign]

Just govern baby, just govern.

[loria]

Palin is complaining about the SNL debate spoof where Tina said marriage should be an institution between two unwilling teens. It's SNL for God's sake, they make fun of everything. Why did she decide to go on SNL if she was so offended? She went on AFTER the debate skit. Fine time to assert your outrage.

[abby4ever]

to joeblow69:

You won't last long here, joe, perhaps an another hour at best. I know your type, you will be in meltdown before you know it. And your meltdown post is what will get you ban.ned.

So enjoy yourself while you can.

[Reaganwater]

No, do not ban Joenoblow or outofAmmoBobbo . They are typical of the curent GOP and serve as a reminder of how far we have come .these and others like them are the kind of dittoheadhannitizer much afraid that Obama will succeed and thereby reduce there squalid political party from a regional laughing stock to a collection of subMasonDixon Trailer-parks.

[TDotO]

EVEN the dems know that obamas plan is terrible......and will only lead to further the destruction of the dollar

[vote-obama]

and you know this because you were part of the 'successful' bush, pelosi reid, paulson and TDotO bailout plan right...gimme a break. we tried it you way and it was a massive failure now sit back and watch how a bailout is supposed to be handled when done correctly.

[TheImpaler]

Can you elaborate?

[Reaganwater]

I am not a A Dem , nonetheless I know just the opposite , along with the fact that you have no facts . Evidence: the dollar started down LONG AGO . Not that you would bother to check before posting. Is google or wiki that far beyond your intellectual capacity !

[plwood01]

As soon as the European Union got their own currency, the dollar has been falling. It has been weak against the Yen and other currencies, even Canada's was worth 1.50 compared to our 1.00 dollar. It is easy to track that when checking conversion rates daily.

[Reaganwater]

in a previous response to me you posted : "...laughable...those arent policies re tard"
regarding the following :
Tax cuts . Ending the Iraq war.Infrastructure rebuilding.Appointments based on competence , not patronage .Stem cell research . Close Guantanamo.

sad little Tro//.

[plwood01]

I wish people would stop the naysaying and offer some ideas, what are yours for how we can make this work?

[harriscrl3]

Imo democrats are punishing Obama and using Obama as their scapegoat because they FAILED to stand up to Bush and you know what will happen WE WILL ALL LOSE. We dont know if this is going to work Obama has said that if they make a mistake they will try something new. What he has done is put together a diverse economic recovery plan that address several areas investing in infrastructure, green techonology, job creating, incentives for buisness to hire and tax cuts for middle class families, education, repairing the electricity grid, money for research in alternative sources of energy. He is trying a comprehensive solution to the problem and here are democrats cherry picking. Oh this wont work this coming form a FAILED congress. They roll over for a President with 20% approval rating rushed to war in Iraq when they could have taken their time and try other avenues and now that they need to hurry because one day that goes by is more jobs lost. They have the nerve to be quibbling about what they dont like in the plan. Part of projecting confidence is projecting to American people that they are ready to seriously work together and what do they do they come out BICKERING.

Carol

[plwood01]

Agreed! They seemingly do not even want to try anything and just sit around while the country collapses like Russia. Because of that, I think that they feel they have the time to waste because even if our country collapses, it will come back like Russia did and it does not matter all that much that some Americans will not survive and many others will be again left behind. They want to be in control of the resources, the money, and the ability to do what they want, nothing, and blame Obama for it. I think that these people are too old to still be in Congress and too dumb to realize that they must change even though they do not want to. Either lead, follow, or get out of the way! We are watching everyone who is trying to derail Obama before he is sworn in and the day of reckoning will come to you sooner rather than later.

[Ammobob]

The ever reliable CBO has weighed in on economic data forecasts for NObama's first term. These projected numbers are conservative, as stated by NObama himself. 8.3% Deficit to GDP not including the new 'stick-it-to-us' package. 9% unemployment come end of 2009. Reduced revenues up to 10%, increased spending 19% ++. Not good. These are low ball numbers. But, Congress will get their payraise, now I FEEEEEEEELLLLL better........

[Grammy3]

I know you have a message in there, but I saw "NObama" in the first line. We can't hear you/read you when you do that. It's a clue that you're too foolish to be posting here.

[plwood01]

Wow, now we are making judgments about who can post a comment here. Unmitigated gall and nerve. I do not know why Obama even wants to be our President when people make comments like those who are so negative here about something that has not even happened yet. Why can't we give the man a chance like everyone else?

[shockmagog]

All a legacy of 8 years of the worst president in United States history.

[Reaganwater]

Plenty of carping and negativity on these pages lately by some. Now the country and the people's welfare need to be the focus -- not your petty political desires . People -- in your neighborhood and maybe your family -- are losing their friends , homes , schools and healthcare .The life they knew is being left behind and some of you want to nitpick and quibble about every Obama decision in the face of this. If any of this comes to your front door , I'll bet you will sing a different tune !
You don't prefer tax cuts , retrain or retain or refrain or reclaim , you don't like Gupta or Gates ? Oh please ,PLEASE go ahead , ask me if I give a dammm about your petty political preferences -- under these kind of circumstances ? And spare me the 'this is democracy in action' horsedump. There is a time for deciding and a time putting aside personal wants and helping.
Have some faith in th President Elect . The fact that he keeps his word , reaches out to forge a new politics should not be held against him -- especially since HE RAN ON THIS !
Have faith in your own judgement of and decision to vote for Barack Obama . Maintain a realistic level of expectations about the economy ,policy and appointments .This man will try and in most cases probably succeed in keeping his word . Be prepared for the shock

[TDotO]

What policies did you vote for when you voted for obama....?
i bet you have no idea do you? you just blindly voted for the charismatic young black guy..

Tell me what did he say that you agreed with...

[Grammy3]

He said his name was Barack Obama, not John McCain. He said he was a Democrat, not a Republican. After that, I didn't need more convincing.

[loria]

TDotO,
Who did you support and why?

[vote-obama]

he said and i quote "TDotO is an idiot" and that i totally agreed with and then i cast my ballot.

[Reaganwater]

Rejecting the endless nonsense and current bitter partisanship that you seem to favor.
Post racial politics .
Tax cuts . Ending the Iraq war.Infrastructure rebuilding.
Appointments based on competence , not patronage .
Stem cell research . Close Guantanamo.
Need more you poor fool ?