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The Honolulu Advertiser
Posted on: Friday, December 19, 2008

Obama's stimulus could be hard sell

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By Lori Montgomery
Washington Post

Hawaii news photo - The Honolulu Advertiser

Sen. Daniel K. Inouye

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WASHINGTON — President-elect Barack Obama and congressional Democrats have entered discussions over an economic stimulus package that could grow to include $850 billion in new spending and tax cuts over the next two years, a gigantic sum that some Democrats say could prove difficult to push rapidly through Congress.

A package of that size — which would include at least $100 billion for cash-strapped state governments and more than $350 billion for investments in infrastructure, alternative energy and other priorities — is a significant increase over the numbers previously contemplated by Democrats. It would exceed the $700 billion bailout of the U.S. financial system, as well as the annual budget for the Pentagon.

Sen. Daniel K. Inouye, D-Hawai'i, the incoming chairman of the Senate Appropriations Committee, said yesterday that there was no agreement on the size of the package, adding that he is skeptical of reports that it could approach $1 trillion.

"We're a country that's used to saying 'a million' or 'billion.' 'Trillion' is something that's very seldomly used," Inouye said.

The potential for massive new spending has touched off a frenzy among interest groups eager to claim their share of the expanding stimulus pie. The profusion of requests from governors, transportation groups, environmental activists and business organizations is spawning fears that the package could be loaded with provisions that satisfy important Democratic constituencies but fail to provide the jolt needed to pull the nation out of a deepening recession.

An Obama adviser involved in crafting the stimulus package said the transition team was keenly aware of the potential pitfalls and was focused on funding ideas that would quickly pump money into the sagging economy, fulfilling Obama's promise to create or preserve 2.5 million jobs by 2011.

Yesterday, Obama economic adviser Jason Furman and congressional liaison Phil Schiliro met with key congressional staff to lay out the plan Obama expects to present to lawmakers.

According to notes taken by a participant and shared by a senior congressional aide on the condition of anonymity, the pair said Obama is putting together a package of $670 billion to $770 billion but that he expects additions by Congress to jack up the total to about $850 billion, or 6 percent of the nation's economy.

Obama also expects to include significant new tax cuts for the middle class. The package could also include tax credits to companies that create jobs, according to sources.