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The Honolulu Advertiser
Posted on: Monday, November 24, 2008

Obama's economic plan grows

By Jim Kuhnhenn
Associated Press

Hawaii news photo - The Honolulu Advertiser

President-elect Barack Obama

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WASHINGTON — President-elect Barack Obama signaled yesterday he will move urgently and aggressively to rescue the plunging economy, demanding swift passage by Congress of a massive two-year spending and tax-cutting recovery program.

Obama's plans, outlined by his transition team on television talk shows, could put aside his campaign pledge to repeal a Bush tax cut for the wealthy. With the downturn in the economy, those tax cuts may remain in place until they are scheduled to die in 2011, said William M. Daley, an economic adviser. "That looks more likely than not," he said.

Obama aides called on lawmakers to pass, by the Jan. 20 inauguration, legislation that meets Obama's two-year goal of saving or creating 2.5 million jobs. Democratic congressional leaders said they would get to work when Congress convenes Jan. 6.

Though Obama aides declined to discuss a total cost, it probably would far exceed the $175 billion he proposed during the campaign. Some economists and lawmakers have argued for a two-year plan as large as $700 billion, equal to the Wall Street bailout Congress approved last month.

"I don't know what the exact number is, but it's going to be a big number. It has to be," said Obama economic adviser Austan Goolsbee.

With the wounded economy worsening, the Obama team's new assertiveness was a recognition he needed to soothe financial markets with signs of leadership. It also foreshadowed a more hands-on role by Obama to influence congressional action during the transition's final weeks.

Obama will introduce his economic team today, including Timothy Geithner as Treasury secretary and Lawrence Summers as head of the National Economic Council. Obama also has settled on New Mexico Gov. Bill Richardson as his commerce secretary.

"We don't have time to waste here," Obama senior adviser David Axelrod said. "We want to hit the ground running on January 20th."

Added Goolsbee: "We're out with the dithering. We're in with a bang."

The emphasis on the economy began Saturday when Obama outlined the framework of a plan to save or create 2.5 million jobs by the end of 2010. The scope of the recovery package is far more ambitious than what Obama had spelled out during his presidential campaign, when he proposed $175 billion of spending and tax-cutting stimulus.

The new one will be significantly larger and incorporate his campaign ideas for new jobs in environmentally friendly technologies — the "green economy." It also would include his proposals for tax relief for middle- and lower-income workers.

But there were no plans to balance the tax cuts with an immediate tax increase on the wealthy. During the campaign, Obama said he would pay for increased tax relief by raising taxes on people making more than $250,000.

The plan is both an economic and a political blueprint. By not including tax increases, Obama silences one potential Republican objection. If successful, the scope of his plan would set the stage for his other legislative goals, including expanded healthcare, permanent changes in tax rates and a comprehensive overhaul of energy policy.

"This package is designed to be a down payment to get his entire agenda started," said one Obama aide, who spoke on condition of anonymity because the details of the Obama package have not been fleshed out.