Political notebook

Obama to offer middle-class tax cut

President-elect Barack Obama greeted people in a crowd after he finished his workout at Semper Fit gym on Marine Corps Base Hawaii while on vacation in Kailua yesterday. President-elect Barack Obama greeted people in a crowd after he finished his workout at Semper Fit gym on Marine Corps Base Hawaii while on vacation in Kailua yesterday. (Hugh Gentry/Reuters)
December 29, 2008
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President-elect Barack Obama's economic stimulus plan will include an immediate tax cut for middle-class families, and the incoming administration hopes to enact permanent tax cuts soon thereafter, a senior adviser to Obama said yesterday.

Faced with a worsening economy, Obama will include the tax relief in his economic stimulus package, which senior adviser David Axelrod said would be implemented soon and could cost between $675 billion and $775 billion. The massive recovery plan will seek to create or save 3 million new jobs, Axelrod said in appearances on NBC's "Meet the Press" and CBS's "Face the Nation."

"We feel it's important that middle-class people get some relief now," Axelrod said. Obama has "promised a middle-class tax cut. This package will include a portion of that tax cut that will become part of the permanent tax cut he'll have in his upcoming budget."

Giving people more spending money will "help get our economy going again," Axelrod said. He said he is hopeful the economic recovery plan is ready to be signed by Obama soon after his Jan. 20 inauguration.

"Obviously, the sooner the better," Axelrod said. "I don't think Americans can wait. People are suffering, our economy is sliding, and we need to act. And so our message to Congress is to work on it with all deliberate speed."

Obama, in his second week of a holiday vacation in Hawaii, continues to work on his economic plan, aides said. He is considering immediate tax cuts of $1,000 for couples and $500 for individuals, which would reduce the amount of taxes withheld from paychecks, a transition aide said.

Axelrod said the incoming administration plans to propose permanent tax cuts in its next budget, but officials have not determined the form of permanent cuts. They would probably be based on Obama's campaign proposal, which said that families earning less than $250,000 would see their taxes remain the same or decrease.

Asked whether Obama would raise taxes on the wealthiest Americans by reversing President Bush's tax cut plan, Axelrod said Bush's plan is "something that we plainly can't afford moving forward."

"Whether it expires or whether we repeal it a little bit early, we'll determine later, but it's going to go," he said.

Obama's plan is expected to include billions in new spending on infrastructure projects, aid to beleaguered state governments, and programs to create new jobs. Axelrod said creating three million new jobs is an essential part of the recovery plan.

Obama wants those jobs to be in areas that will help the nation's economy in the future, such as alternative energy, healthcare, education, and transportation.


Obama takes another trip to Marine base for workout
Barack Obama yesterday made another trip to a Marine Corps base near his Hawaii vacation home for an hourlong morning workout.

Obama and two friends from Chicago - Eric Whitaker and Martin Nesbitt - went to the Semper Fit gym on compound. The president-elect didn't speak to reporters but made small talk with people who gathered by the road inside the secure base.

Marines and others on the secure base gathered on a traffic island waiting for a glimpse of Obama. Obama said "aloha" and asked the visitors how they were doing.

Obama and his family are spending 12 days in Obama's native state. They are trying to keep a low profile on the trip, but Obama is receiving national security briefings. He has no public schedule through the New Year.

For most days, the forecast calls for balmy breezes, sun, occasional showers and temperatures in the mid-70s.


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