President-elect Obama to Take Immediate Action on Economic Recovery Package

By Paula Cruickshank, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, Dec. 30, 2008.

President-elect Barack Obama intends to move forward immediately on a middle-income tax cut once he takes office on January 20 but he has not decided whether to propose a repeal of the 2001 and 2003 tax cuts benefiting upper-income taxpayers or simply let them expire, according to Obama’s chief strategist David Axelrod. Continuing tax cuts for the wealthiest taxpayers is “something that we plainly can’t afford moving forward,” Axelrod advised in an interview on NBC News’ “Meet the Press” on December 28, 2008.

Axelrod noted that the upcoming economic recovery package will include a portion of the middle income tax cut and that it will be made permanent in Obama’s upcoming budget plan. The economic recovery package to be considered by Congress in early January could cost between $675 billion to $775 billion, Axelrod estimated.

The president-elect repeatedly has called for bold action on a large stimulus package. National Economic Council Director-designate Larry Summers is among Obama’s top economic advisers who maintain that a stimulus package must be large to have a positive effect on the U.S. economy and to avoid a double-digit unemployment rate. The Obama administration’s employment goal is to create 3 million jobs or save 3 million in an effort to turn around the U.S. economy, Axelrod said.