Democrats: Stimulus Plan Could Total $700 Billion

Sunday, 23 Nov 2008 05:40 PM

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One of Barack Obama’s closest aides suggested Sunday that the president-elect may renege on his promise to roll back George Bush’s tax cuts while Congressional Democrats said the new administration may unveil a stimulus plan that will cost taxpayers $700 billion.

That would be four times the size of the $175 billion stimulus president-elect Obama often touted during his campaign.

Sen. Charles Schumer (D-N.Y.) on Sunday said an economic recovery plan would have to cost $500 to $700 billion in order to be effective.

Appearing on ABC’s “This Week with George Stephanopoulos,” Schumer said that the economy is in “serious, serious trouble.” To fix it, a recovery plan would need to be “pretty big.”

“We’re on the edge of deflation. Once you get into deflation, you almost never get out. That’s what the Great Depression taught us. That’s what Japan taught us,” Schumer said. “So a strong shot in the arm, just the way Barack Obama has conceived it, infrastructure, green jobs, is what is needed.”

Schumer said his vision of the economic stimulus is “a little like having a new New Deal, but you do it before a depression occurs, not after.” Congress would be able to pass such a plan before President-elect Obama takes office to have it “on his desk by Inauguration Day,” Schumer added.

Speaking to CBS News on Sunday, House Speaker Nancy Pelosi said any stimulus package should be aimed at creating jobs immediately, and could contain a tax cut.

"Something of several hundred billion would have to be some investment into the future, plus creating jobs immediately, and a tax cut," she said.

Republicans on Sunday did not rush to reject either the cost or the scale of what was being envisioned. Sen. Richard Shelby (Ala.), the ranking Republican on the Banking Committee, only asked for details.

“Well, I would like to see the details of any stimulus package: what it would do, how it would work, who would benefit from it,” said Shelby, who also appeared on the ABC program. “What we need is to really get the economy going. I think it’s fair to say that we Republicans will look at the details and see if we can support it. I want to support things that are meaningful for the economy, and I believe Senator Schumer does, too.”

Appearing on the same show, incoming White House senior adviser David Axelrod suggested Obama would push for a much larger package than the $175 billion stimulus he put forth on the campaign trail.

"He wants a plan big enough to deal with the large challenges we face. And I think there's a growing consensus across the spectrum among economists that we're going to have to do something big," Axelrod said

"We need to start digging our way out of this hole here or climbing our way out of this hole and stop digging, and that is our objective and that is what we are going to do," said Axelrod. But Axelrod, perhaps Obama’s closest adviser, declined to comment on the cost. "I'm not going to throw a figure out here," he said.

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