GOP Gives Obama Their Own Tax Cut Plans

AP

Republicans in the U.S. House told President Barack Obama Friday the best way to boost the economy would be to cut income taxes, rather than the Democratic plan which puts more focus on government spending.

Republicans complain that $550 billion of the Democrats' $825 billion stimulus package was government spending, with only $275 billion in tax cuts which they say would better spur job growth and pull the economy out of a year-long recession.

Both sides said Friday they expected to get a stimulus package for Obama to sign by his mid-February deadline.

But they continued to disagree on details, with Republicans saying they have been shut out of the discussion. Republicans handed their alternatives to Obama at a bipartisan White House meeting and planned to press their ideas when the package comes to a House vote Wednesday.

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"We expressed our concerns about some of the spending that's being proposed in the House bill and the fact that it doesn't spend out very quickly," Rep. John Boehner, the top House Republican, told reporters after the meeting.

House Republicans were to meet with Obama privately next week but Boehner said "we felt that as fast as this package is moving, we needed to share those ideas with him today." Despite the differences, Senate Minority Leader Mitch McConnell predicted the bill would pass by mid-February.

"I do think we'll be able to make the president's deadline," he said. House Speaker Nancy Pelosi said she felt Obama helped allay some Republican concerns.

"I have a good feeling coming out of the meeting that we'll be able to reach more bipartisanship as we go forward," she said.

Tax Breaks

The Democratic tax cut plan would direct benefits more toward lower-income workers, even those who do not pay income taxes, while the Republicans would help all income taxpayers.

The Republicans do not know yet the cost of their plan. Republicans have so far failed to significantly change the legislation despite offering amendments to boost tax cuts and slash government spending.

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The Republican proposals include cutting the lowest two income tax brackets, from 15 percent to 10 percent and from 10 percent to 5 percent, while also offering small businesses a tax deduction equal to 20 percent of their income.

AP

Democrats have proposed a tax cut of $500 for individuals earning up to $75,000 and $1,000 for families earning up to $150,000. Republicans said their plan would give families an average of $1,700 in savings.

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The Republicans also proposed helping those who have lost their jobs by eliminating taxes on unemployment benefits. They also urged that the legislation bar higher taxes to pay for the anticipated increased spending.

Senate Finance Committee Chairman Max Baucus unveiled the Democrats' first draft of the stimulus legislation in the Senate to be considered next week.

Totaling $275 billion in tax breaks and incentives, it had many similar elements to the House package. It included $30 billion in tax cuts and breaks aimed at the energy sector.

With $1 trillion deficits expected for the next several years, the measure would also increase the federal government's borrowing authority to $12.14 trillion from $11.315 trillion, according to a summary issued by Baucus' office.

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