Obama, Paulson May Ask for a Combined $1.2 Trillion from Skeptical Congress
By Mike Caggeso
Associate Editor
Money Morning
A price tag has emerged for President-elect Barack Obama’s infrastructure stimulus, $850 billion, according to one of his advisers.
His team calculates the figure is necessary to create 2.5 million jobs, improve an array of infrastructure projects, and bolster unemployment, health-care, and renewable energy programs, lawmakers told Bloomberg.
In the shorter term, U.S. Treasury Secretary Henry Paulson may ask for the other half of October’s $700 billion Troubled Asset Relief Program (TARP), money originally earmarked for bank rescue but now possibly a source for a highly anticipated auto bailout, Bloomberg also reported.
But for Obama to begin his spending spree, and for Paulson to continue his, each will genuflect before Congress to get the money. The combined total is about $1.2 trillion, but some analysts believe that figure could be higher.
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Paulson says the money he’s requesting is urgent, and would be asking a Congress that officially isn’t in session until the New Year. As a compromise, Paulson has indicated that he could use the extra money to also help troubled automakers General Motors Corp. (GM) and Chrysler LLC.
So far, banks on the receiving end of Paulson’s spending spree haven’t been shoring up their shoddy mortgage holdings, but rather going on their own spending sprees – increasing stakes in foreign holdings and buying up weakened banks that didn’t receive federal aid.
Safe to say, he’s losing fans.
“Please don’t come here and ask for another penny, because if you do, I’m going to work 24 hours a day with the same people that I worked with to support you to make sure that they do not support giving you another dime,” Rep. Maxine Waters, D-Calif., said at a Dec. 10 House hearing.
That’s not to say it will be easy for Obama, either. Even though he’ll be speaking to a Congress with some of the very Democrats that surfed into congress on his wave of support, the idea of writing out yet another taxpayer check – this time for $850 billion – could struggle to find support.
House Speaker Nancy Pelosi doesn’t said Monday that the pending stimulus package should cost about $600 billion, with $400 billion for investments and other government aid and $200 billion in tax cuts, Reuters reported.
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Pingback by Obama Stimulus and January Effect Will be the Week's Top Stories on 5 January 2009:
[...] Briefings for top congressional Democrats were to start either over the weekend or today (Monday), a senior transition-team official told The Associated Press late last week. President-elect Obama is slated to meet today with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., in a Democratic strategy session that is likely to focus on the economic recovery package. [...]
Pingback by Jutia Group - Market Jitters & Political Critters on 5 January 2009:
[...] Briefings for top congressional Democrats were to start either over the weekend or today (Monday), a senior transition-team official told The Associated Press late last week. President-elect Obama is slated to meet today with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., in a Democratic strategy session that is likely to focus on the economic recovery package. [...]