|Issue of the Day: Obama Looks to $775 Billion Stimulus Bill|
Published Tuesday, January 6th, 2009
President-Elect Barack Obama has said that there will be no backing away from a promised tax cut for the middle class and a tax hike on the wealthiest. The newest stimulus package could reach $775 billion over 2 years. This includes about $300 billion in overall tax cuts for individuals and businesses, a move aimed at attracting republicans who favor the tax cuts over more spending. The other $475 billion would go toward classrooms, libraries and labs meant to help students compete in a modern global economy; repairing aging bridges, roads and public transit systems; the computerization of healthcare records; and investments in energy sources to curb U.S. dependence on foreign oil. Furthermore, the business tax package includes write-offs for huge losses, a one year tax credit for companies who make new hires and forgo layoffs—worth $40-50 billion, and a raise in small business expenditures from $175,000 to $250,000.
Both Democrats and Republicans have reigned over deficit spending, neither can be singled out. Federal spending has out stripped income more often than not since the beginning of WWII. Recently, the budget has swung from a few years of surplus — 1998-2001 — to a continuance of overspending from 2001 to the present, reaching historic highs of $3 trillion in 2008. Receipts from taxes and other income for the federal government has remained steady, however, since World War II at a rate of 15 to 20% of the country’s GDP, which amounts to an average $100-200 billion below spending.