The first order of business for the incoming Obama administration is going to be a stimulus package. With Obama’s vacation over and the President-elect moving from Chicago to DC, the details of the plan are beginning to become clearer. The Wall Street Journal reports that the administration will urge Congress to make 40 per cent of the stimulus, expected to weigh in at $775 billion, tax cuts. As it notes:
This is a clever move from the ever-pragmatic Obama team. The stimulus package is, in reality, hugely risky: the more bi-partisan cover Obama has the better for him. The personal and business tax cuts Obama is proposing—unlike Brown’s 2.5 percent cut in VAT—are politically well-targeted and will be almost impossible for the Republicans to oppose. Obama might just get the 80 plus votes in the Senate that Mike Allen says he wants.“The Obama tax-cut proposals, if enacted, could pack more punch in two years than either of President George W. Bush’s tax cuts did in their first two years.”
PS Reading the WSJ piece, I was reminded of this exchange between Brown and Gaby Hinsliff in The Observer:
What differences do you expect the inauguration of President Obama to make to the international dynamic? “What people will see is an administration that is preparing a major fiscal boost, a major stimulus package both now and for the future. I think it may change people’s minds over what is happening in other countries as a result, particularly in Britain.”
To the extent that Obama will influence the British debate, Brown is probably right: the headlines will suggest that the two are doing the same thing. But when you look at the details of what Obama is proposing you see a much better thought-out and designed scheme.
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