Obama 'planning $800bn stimulus'

6 Jan 2009, 7:07 am   -   Source: AAP
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US President-elect Barack Obama is seeing Congressional leaders to discuss his stimulus plan, which reports say could total $800bn.

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US President-elect Barack Obama is seeing Congressional leaders to discuss his stimulus plan, which reports say could total $800bn.

Two weeks before the inauguration and after waving off his young daughters on their first day at a new school in Washington, Obama made a fast start on building momentum for his attempt to revive the world's largest economy.

"The reason we are here today is because the people's business can't wait," Obama told reporters at the start of talks with House of Representatives Speaker Nancy Pelosi, a day after moving to the US capital from Chicago.

"We've got an extraordinary economic challenge ahead of us, we're expecting a sobering job report (for December) at the end of the week."

First details began to emerge of the massive scope of Obama's planned stimulus package, his opening political gambit when he takes office on January 20 during the worst global economic crisis for more than 70 years.

Obama will propose tax cuts totalling $US300 billion ($A421.23 billion) over two years, or about 40 per cent of a package that could top $US775 billion ($A1.09 trillion), a transition source said on condition of anonymity.

The president-elect has already previewed a multi-billion-dollar program of public works programs, including highway and bridge repairs, renovating school classrooms and aid to cash-strapped states.

The plan is designed to create or preserve three million jobs over three years, includes tax and spending incentives for renewable energy production and provides extra healthcare benefits for needy Americans.

US citizens can expect immediate tax relief of about $US500 ($A700) for individuals and $US1,000 ($A1,400) for couples under the plan, and some businesses would be able to write off last year's losses against their tax return.

The magnitude of the tax cut may be seen as a bid to woo Republican support for the stimulus program, especially in the Senate where the opposition party has enough seats to block legislation.

But the transition source denied political motivations were at work behind the scenes, saying the makeup of the package was dictated by specific measures that would stimulate growth and create jobs.

"Sometimes good policy is just good policy," the official said.

Obama was later due to hold further meetings, including talks with the Democratic and Republican leaders of the House and Senate, and planned to convene a meeting with his team of economic advisers.

On Sunday, congressional leaders dashed hopes the stimulus plan would be ready for Obama's signature as soon as he is sworn in.

Democratic House leader Steny Hoyer said Sunday the bill could pass through his chamber by the end of the month and clear the Senate by mid-February, but would not be ready on inauguration day.

"It's going to be difficult to get the package put together that quickly to have sufficient time to be reviewed, debated and passed," Hoyer told Fox News Sunday.

Obama spokesman Robert Gibbs said Monday's meetings were designed to convey urgency about the economy and to seek bipartisan input from lawmakers.

"We've seen statistics, we've seen Christmas sales, consumer confidence and obviously upcoming job numbers which underscore that a very serious situation has only gotten worse and isn't likely to get better any time soon," Gibbs said.

But he agreed it was "very unlikely" the stimulus package would be ready by January 20.

Obama flew to Washington on Sunday, after the first bump in what has been a smooth transition when New Mexico Governor Bill Richardson withdrew his name from the Senate confirmation process for commerce secretary owing to an investigation into a financial company doing business with his state.

President George W Bush has invited Obama to a White House lunch on Wednesday, along with former presidents Bill Clinton, George HW Bush and Jimmy Carter.

Earlier on Monday, Obama saw his daughters Malia and Sasha off from the family's luxury hotel before the girls' first day at the Sidwell Friends private school in Washington.

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