Obama to Disperse $300 Billion in Tax Cuts

Peter baker and Carl Hulse report in the New York Times that: "President-elect Barack Obama plans to include about $300 billion in tax cuts for workers and businesses in his economic recovery program, advisers said Sunday, as his team seeks to win over Congressional skeptics worried that he was too focused on government spending. The legislation Mr. Obama is developing with Congressional Democrats will devote about 40 percent of the cost to tax cuts, including his centerpiece campaign promise to provide credits up to $500 for most workers, costing roughly $150 billion. The package will also include more than $100 billion in tax incentives for businesses to create jobs and invest in equipment or factories." It has been estimated that: "The overall economic package, of $675 billion to $775 billion." Democrats believe "that the economic package would not be ready for Mr. Obama’s signature immediately after his inauguration on Jan. 20, as they once hoped." Republicans are anxious to slow down the legislative process with intense scrutiny of the plan and will also make efforts to include their own ideas in the legislative package. "The economic package under consideration by the president-elect and his Congressional allies would commit $675 billion to $775 billion over two years. If the tax cuts represent 40 percent of that, as Mr. Obama’s advisers said Sunday, that would mean about $270 billion to $310 billion. About half of that would go to workers under what Mr. Obama during his campaign called the Making Work Pay credit, worth up to $500 for individuals and $1,000 for families. The Obama campaign estimated that about 150 million Americans making less than $200,000 would qualify, including those who make too little to pay federal income taxes but would receive a check that would offset Social Security and Medicare payroll taxes." The next several weeks will witness a flurry of activity in both the Congress and the White House with numerous possible pitfalls looming that could delay and change the Obama plan before it becomes law. The future of the Obama Presidency and of the Congressional Democrats hinges on their being successful in delivering on their campaign promises made to the American people.

Expansion of Rail Links are Vital to Nation's Economic Growth

John W. Frece of the Baltimore Sun reports: "...Trains are once again moving onto the public agenda ... Jim Charlier, a transportation planner from Colorado...On behalf of a coalition of housing, environmental, public health, urban planning, transportation, real estate and business groups...has drafted an ambitious plan to link the 10 biggest "mega-regions" of the United States by high-speed rail by 2030...What supporters of these projects have in common is the belief that an expanded rail system serves multiple purposes at a time when we can no longer afford the luxury of single-purpose investments. They see rail as a way to reduce greenhouse gases, to offset high gas prices, to mitigate or at least avoid highway congestion, and to save rural resources by fostering more compact, transit-oriented city living."

A Sustainable Economic Recovery Plan is Needed for America's Future Economic Health

Andrew L. Yarrow and Michael Rose report in the Baltimore Sun: "...Instead of a simple bailout, we should be asking: How can we retool America's auto and auto-parts factories to produce goods that we need, and can sell to the world, in the 21st century? Choose your own products and industries - sustainable means of transport, including mass transit and high-speed rail; solar, hydrogen or other green-power infrastructure and consumer goods; next-generation telecommunications hardware; etc. Although continued auto production is necessary in the short and long term, we can seize this moment to rethink our manufacturing priorities. When we fail to imagine ourselves 30 to 50 years into the future, we also fail to remember our experience of 50 to 65 years ago...The auto industry shouldn't be allowed to die now." Washington "must get serious about forging farsighted industrial, energy and transportation policies that address...environmental needs and the need for a strong, new industrial base."

Governors forced to make tough decisions during current financial crisis

PAUL KRUGMAN of the New York Times comments: As Obama "tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future." Governors are "cutting back because they have to — because they’re caught in a fiscal trap...(they are forced to) cutting public services and public investment right now...shredding the social safety net at a moment when many more Americans need help isn’t just cruel. It adds to the sense of insecurity that is one important factor driving the economy down." It is being done because "state and local government revenues are plunging along with the economy — and unlike the federal government, lower-level governments can’t borrow their way through the crisis." Governor Ted Strickland of Ohio has suggested that relief must include: " funding for food stamps and Medicaid; federal funding of state- and local-level infrastructure projects; and federal aid to education." The overriding problem facing the nation, Krugman concludes; that the federal government needs to ensure "that the fiscal problems of the states don’t make the economic crisis even worse."