WASHINGTON - President-elect Barack Obama signaled yesterday that he will quickly seek a sweeping economic recovery plan likely to exceed the price tag of the $175 billion plan that he unveiled during the campaign.
A "crisis of historic proportions" is gripping the nation, Obama said, and it calls for "a plan big enough to meet the challenges we face." Obama has asked his economic team to craft a plan to create 2.5 million jobs over the next two years, including some in the field of alternative energy - a two-year stimulus reaching further than his original one-year-plan. With hope of signing it soon after taking office, he plans to seek quick congressional approval.
"These aren't just steps to pull ourselves out of this immediate crisis," Obama said in his weekly radio address. "These are the long-term investments in our economic future that have been ignored for far too long." The announcement of a more robust stimulus plan comes amid worsening economic news over the past several weeks, with financial markets in turmoil and new home purchases hitting their lowest point in 50 years last month. In his address, Obama noted the risk of a deflationary spiral and its potential to increase the nation's debt.
In light of the recession, Obama is also said to be reconsidering one key campaign pledge - his proposal to repeal the Bush tax cuts for the wealthiest Americans. According to several people familiar with the discussions, he instead might let those tax cuts expire as scheduled in 2011, effectively delaying any tax increase while he gives his stimulus plan a chance to work.
Just over a month ago, Obama unveiled a proposal to help employers, automakers, homeowners and state and local government weather the economic storm, with advisers placing a $175 billion price on the plan.
At a campaign event in Toledo, Ohio, Obama proposed a $3,000 tax credit for employers for each new person they hire. He said he would eliminate income taxes on unemployment benefits, double the government's loan guarantee for automakers and allow people to borrow from retirement savings without a tax penalty, regardless of their age.
But in yesterday's address, Obama said he believes the economy has deteriorated to a point of crisis and introduced new ideas that he hadn't mentioned before. Aides to the president-elect acknowledged that Obama was widening the scope of his plan and that it would probably cost more than the $175 billion discussed before the election.
