Middle-Class Tax Cut On Track, Obama Says

Despite Recession, President-Elect Will Keep Campaign Promise For $140 Billion In Tax Relief By 2010

(AP)  A top adviser to President-elect Barack Obama said Sunday that the country's slowing economy won't keep the new administration from fulfilling its plans for a middle-class tax cut.

"We feel it's important that middle-class people get some relief now," Obama adviser David Axelrod said.

Middle-class tax cuts will be part of the new administration's stimulus plan, Axelrod said. "This package will include a portion of that tax cut that will become part of the permanent tax cut that he'll have in his upcoming budget," Axelrod said.

The incoming administration is considering tax cuts of $1,000 for couples and $500 for individuals that will be delivered by reducing the tax withheld from paychecks. That plan has been estimated to cost about $140 billion over 2009-2010.

The lump-sum rebates issued earlier this year were used by many people to pay down debt, rather than spending the money and boosting the economy as the administration had hoped.

"People need money in their pockets to spend," Axelrod said. "That'll get our economy going again."

Congress should have a new stimulus plan ready for the new president to sign as soon as possible, Axelrod said.

He placed the cost of a planned Obama stimulus package at "$675 billion to $775 billion" but said "those numbers are not fixed."

"Obviously, the sooner the better. I don't think Americans can wait," he said. "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."

The slowing economy also means that it's more important than ever to eliminate President George W. Bush's tax cuts, Axelrod said. "It's something we plainly can't afford moving forward," he said. "Whether it expires or we repeal it a little bit early we'll determine later but it's going to go. It has to go."

Eliminating Bush's tax cuts while adding in new middle-class tax cuts doesn't mean that Obama is raising taxes, Axelrod argued.

"It'll just restore some balance," said Axelrod, saying the two moves will equal a "net tax cut for the American people."

Axelrod also said Obama wants to create as many as 3 million jobs for work-starved Americans, but wants those jobs to be in areas that will help the nation's economy in the future. Obama's staff has talked about "creating or saving" millions of jobs with his economic program.

"We want to do it in a way that leaves a lasting footprint, by investing in energy and health care projects and refurbishing the nation's classrooms and labs and libraries so our kids can compete, and rebuilding our crumbling roads and bridges and waterways," Axelrod said. "And in this way, we're not only creating work, but we're laying the foundation for the future of our economy."

Axelrod refused to talk in detail about Israel's offensive against Islamic militant Hamas in the Gaza strip, saying Obama was in contact with Secretary of State Condoleezza Rice and President George W. Bush about the crisis. Some 280 Palestinians have died in the first 24 hours of the air campaign against Gaza rocket squads and Hamas members.

But, he said, "President Bush speaks for the United States until Jan. 20 and we're going to honor that."

Axelrod acknowledged that the United States has had a "special relationship" with Israel, calling it an "important bond, an important relationship."

Obama's "going to work closely with the Israelis. They're a great ally of ours, the most important ally in the region," Axelrod said. "And that that is a fundamental principle from which he'll work. But he will do so in a way that will promote the cause of peace, and work closely with the Israelis and the Palestinians on that."

Axelrod appeared Sunday on NBC's "Meet the Press" and CBS' "Face the Nation."

[you_fools]

Honestly, will $1,000 tax refund really save any family.? Or a $500 for a single person..

I say the government could keep that $1,000 but they will just waste it on some big business.. Or toliet seats for air farce 1

[paidgopshill]

I''''m still hopeful things will get better with Barack in power - have a good day pGs :)

Posted by SamTheTVCat at

You too Sam. If things do get worse perhaps one day we will meet in person as part of anotherview2''s WPA sponsored road crew:)

[samthetvcat]

Maybe holding talks with China to explore the idea of expanding exports of services to try and develop their consumer and service industries would go a long way towards softening up GOP resistance to a stimulus package.

GOP like money - the centrists Barack has surrounded himself with don''t seem to be right of center because of a kinship of ideology, they seem more driven by the desire for approval (?) I''m not sure it would dawn on them to think of that sort of appeal (?)

[samthetvcat]

-----"Sam, yes it gets very frustrating because what needs to be done is obvious but not politically expedient"-----
Posted by paidGOPshill

I guess you''re right, it isn''t politically expedient to expect such drastic changes, is it - like the world just really doesn''t work that way, does it?

I share in your frustration!

It doesn''t show, but I DO have more faith in Barack than the GOP - that''s why I voted for him. Maybe I just have to give him more time to do things when the timing''s right :)

I''m still hopeful things will get better with Barack in power - have a good day pGs :)

[paidgopshill]

Posted by SamTheTVCat a

Sam, yes it gets very frustrating because what needs to be done is obvious but not politically expedient especially to the moneyed class of our society. If you want to know how we arrived here look up the decisions of Skull and Bones member justice Morrison Waite and consider that both parties had one of these members running in 2004.

[samthetvcat]

---"Milton Friedman, Ronald Reagan and paidGOPshill (three great Americans), have declared that deficits don''''t matter. With that as the cornerstone of sound economic monetary policy, the rest of your economic concerns are immaterial."---
Posted by paidGOPshill

I much prefer you complimenting yourself over insulting me pGs :)

I''m good with complex ideas, but am ironically too simplistic for sarcasm - it sounds like you WANT to believe there can be a different way, but since the people in power don''t think otherwise you don''t want to set yourself up for disappointment (?)

If that''s the case then yeah, I know what you''re saying because after 8 years of Bush with so many of our concerns going unmet you sort of get into a state - I don''t know what else to say (?)

[nothappyatall]

FYI:
Not only are we squandering and borrowing $10 billion/mo for a stupid occupation of Iraq, but;

In Fiscal Year 2008, the U. S. Government spent $412 BILLION of your money on interest payments to the holders of the National Debt- mostly CHINA.

Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion.

The National Debt is $10.6 Trillion! it was half that when Clinton was in office. So the debt has doubled in just 7 years. Updated 23 December 2008.

[nothappyatall]

Obamas plan is not a tax cut."

The Bush regimes "tax cut" cut was TEMPORARY, and if you want all the dam services you use you gotta, or SOMEONE''s gotta pay for it all, there''s NO free lunch, you want new schools and busing, roads, bridges, infrastructure, health care, medicare, SS to cover you etc etc that money has to come from SOMEONE. The repugs BORROWED that money from communist China at interest and DOUBLED the debt to 11 trillion. The Dems dont want to borrow from CHINA plus interest forever. Sooner or later we wont be able to pay that interest- China OWNS us now because the Repugs have us so deep in debt to them we can NEVER pay that off- NEVER.

"And what has happened to 700 billion that was to allow banks to ease credit and get money moving in the markets again.
Posted by anotherview2"

Squandered by AIG to buy another failed bank, exec bonus'' and more, it''s basically GONE- another bush failure- billions for his FRIENDS b4 he leaves.
Credit doesnt do a dam thing if you dont have a JOB!
Unemployed dont need and cant get credit they need JOBS


"The Bush tax cut program reduced my income taxes about 2000 bucks. So, Pres elect BO wants to repeal that tax cut, which raises my taxes 2000 bucks, and give me a 1000 buck tax cut."

See above about the temporary cut AND the services you use.

[paidgopshill]

Are you capable of talking about economic sustainability, trade deficits and exports, savings rates, debt loads, growing demand, etc?

Or is (ROTFLMAO) ''''silly woman'''' all you bring to the table?

Posted by SamTheTVCat a

Milton Friedman, Ronald Reagan and paidGOPshill (three great Americans), have declared that deficits don''t matter. With that as the cornerstone of sound economic monetary policy, the rest of your economic concerns are immaterial.

[samthetvcat]

---"Much better to have a "service" economy where the vast majority of Americans serve the Ruling Clique.
And we can hardly sell Burgers to people living in Asia, now can we?"---
Posted by jbrown88881

The fatalism and despair masked by the sarcasm and hostility are depressing.

How do you know what the Chinese want and need that we have the ability to provide unless we actually ask them? The only person in the last 8 years that Bush has sent over there to ask is Paulson - does he strike you as a listener in tune with the peeps? He''s not even like that with us, how could he possibly be more connected with the Chinese?

Maybe there''s demand for sales consultants, marketers, advertisers . . . I''m sure others could come up with other ideas if they tried . . .

[paidgopshill]

Obama''''s plan is not a tax cut. It is a welfare handout to " re-distrubute the wealth" as Obama puts it. If 40% don''''t pay any tax at all, what justifies sending them a check which essentially for you and I who do. And what has happened to 700 billion that was to allow banks to ease credit and get money moving in the markets again.

And the "jobs program" is simply expanding an already huge federal government. There is nothing said about small business who is the biggest jobs creator in the country. We will soon have the privelege of watching huge road crews standing around doing nothing while two guys do all the work.

Posted by anotherview2

On the plus side you seem to have way too much time available to air your philosophical and ideological ruminations here on the CBS comments board. Perhaps later this year you will end up as one of those road crews propping up a WPA shovel.

[samthetvcat]

PS paidGOPshill - how much time are you going to need to think up more insults . . . a day and a half? I''ll check back later . . .

[samthetvcat]

---"Silly woman, we are a service economy based on consumer spending. What would you recommend to boost our well managed and vibrant economy besides more money to consume?"---
Posted by paidGOPshill

There really is no defense of the plan except for insults, is there? Are you capable of talking about economic sustainability, trade deficits and exports, savings rates, debt loads, growing demand, etc?

Or is (ROTFLMAO) ''silly woman'' all you bring to the table?

[paidgopshill]

OMG, somebody from team Obama finally admitted it - the plan isn''''t to focus on how best to maximize the output of all the individuals who want to work to maximize demand for our goods and services, the plan is to get us to spend! Borrow and spend, right?

Maybe it''''ll work, but I don''''t know if it''''s an ideal plan :(

Posted by SamTheTVCat at


Silly woman, we are a service economy based on consumer spending. What would you recommend to boost our well managed and vibrant economy besides more money to consume?

[paidgopshill]

Let''''s see, The Bush tax cut program reduced my income taxes about 2000 bucks. So, Pres elect BO wants to repeal that tax cut, which raises my taxes 2000 bucks, and give me a 1000 buck tax cut. What kind of math do they teach in Chicago schools?????? The definition of a tax cut for dimocrats is quite a bit different from my understanding what "CUT" means....

Posted by coppertales


You are so right. If Obama should be handing anything out it should be cheap, Chinese manufactured bootstraps that the great unwashed in our society could use to pull themselves up.

[paidgopshill]

Look I can see putting $700 billion dollars in the pockets of the Wall street investment bankers because they have no idea what being poor is like and it could be a real hardship on them. If they had to start taking a subway to work instead of a chauffeured driven limousine, it could seriously hurt their self image and besides, it is only a matter of time before that small economic boost we provided them trickles down to the rest of us.

The $140 Billion into the general publics pocket however is a humongous waste of capital. Most of you already know what it''s like not to have gobs of money so it isn''t like you would be missing it or suffering anymore than you do now. Secondly, most of you are on the lower rungs of the economic ladder and couldn''t effectively trickle anything that came your way down.

[marinecwo2]

Let''''s see, The Bush tax cut program reduced my income taxes about 2000 bucks. So, Pres elect BO wants to repeal that tax cut, which raises my taxes 2000 bucks, and give me a 1000 buck tax cut. What kind of math do they teach in Chicago schools?????? The definition of a tax cut for dimocrats is quite a bit different from my understanding what "CUT" means....


--------------------------------------------------------------------------------

Posted by coppertales at 09:55 AM : Dec 29, 2008


You must make more than $150,000 a year then. The tax breaks are going for households that make make less than $150,000.

[coppertales]

Let''s see, The Bush tax cut program reduced my income taxes about 2000 bucks. So, Pres elect BO wants to repeal that tax cut, which raises my taxes 2000 bucks, and give me a 1000 buck tax cut. What kind of math do they teach in Chicago schools?????? The definition of a tax cut for dimocrats is quite a bit different from my understanding what "CUT" means....

[samthetvcat]

---"People need money in their pockets to spend," Axelrod said. "That''ll get our economy going again."---

OMG, somebody from team Obama finally admitted it - the plan isn''t to focus on how best to maximize the output of all the individuals who want to work to maximize demand for our goods and services, the plan is to get us to spend! Borrow and spend, right?

Maybe it''ll work, but I don''t know if it''s an ideal plan :(

[samthetvcat]

---"There is nothing said about small business who is the biggest jobs creator in the country."---
Posted by anotherview2

That''s a really great point - one qualification I''d make though is that small businesses apparently for the most part need big businesses to thrive for them to be able to thrive as well, so is there any data to show that small businesses alone in the collective can actually shore up the economy if big businesses are stagnant?

Also, has it always been the case that small businesses disproportionately create the majority of jobs or is this just a recent trend because big businesses invest more in capital or do things like off-shore more easily? I think it''s always been true that small businesses create more jobs, but haven''t been able to find confirmation - if it hasn''t always been true, then maybe efforts would be better directed at like trade or whatnot (?)