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Fallout: The Financial Crisis

GOP wants more tax cuts in stimulus

John Dimsdale Jan 23, 2009
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Fallout: The Financial Crisis

GOP wants more tax cuts in stimulus

John Dimsdale Jan 23, 2009
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TEXT OF STORY

Kai Ryssdal: President Obama met with congressional leaders at the White House today. They gathered to mull over their differences on the best ways to kick-start the economy. Senate Democrats issued their stimulus proposals. It’s got more tax cuts and less spending than the House version that came out a week or so ago. House leaders are going to try to pass their bill sometime next week, over the objections of a large number of Republicans. Our Washington bureau chief John Dimsdale took a look at the differences.


John Dimsdale: Most of the $825 billion in the House Democrats’ stimulus package would be spent on infrastructure and job-creation projects. Tax breaks make up only 40 percent of the total. Senate Democrats today issued a $700 billion proposal, more than half in the form of tax cuts. That’s more to the liking of Republicans, who believe lower taxes would be a quicker boost to the economy. And they’d like to scale back the overall size. House minority leader John Boehner spoke to reporters after the White House meeting.

John Boehner: We believe that spending nearly a trillion dollars is really more than what we ought to be putting on the backs of our kids and their kids.

Mark Zandi: Let me say I think the package should be bigger.

Mark Zandi of Economy.com doesn’t think the question comes down to spending versus tax cuts. Since interest rates are at record lows, why can’t the government borrow enough to do both?

Zandi: I would, if I were king for the day, expand the package and I would increase the size of the tax cuts. While it doesn’t pack the same economic punch as spending, it doesn’t create as many jobs, you can get it into the economy quickly and the economy needs help here and now.

President Obama meets with Republicans on Capitol Hill next week to attract more bipartisan support for a stimulus package.

In Washington I’m John Dimsdale for Marketplace.

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