Obama Begins Selling Americans the Stimulus Plan

President-elect Barack Obama rocketed to national prominence and won the battle for the nation's highest office in large part thanks to his extraordinary communication skills. Now, just 12 days before he takes office, he's turning to those skills to convince Americans that his ambitious $775 billion stimulus plan will go a long way to helping pull the U.S. economy out of its deep funk.

Elements of the plan highlighted by Obama include: a $1,000 income-tax cut, which he said would reach 95% of American families; spending on alternative energy initiatives; investing in infrastructure improvements including the electric grid and broadband lines; modernizing classrooms; and computerizing health records. "The overwhelming majority of the jobs created will be in the private sector," he said, "while our plan will save the public-sector jobs of teachers, police officers, firefighters and others who provide vital services." That prospect is starting to bring out criticism that too much money is going to be thrown too quickly at ineffective projects and programs, running up the deficit for little long-term benefit. "It's incredibly difficult to identify things that are valuable in the long run, can be financed in the short run, and get the money out the door quickly," former Congressional Budget Office Director Douglas Holtz-Eakin, an adviser to Senator John McCain (R-Ariz.) in the Presidential campaign, told the Associated Press. "It would be preferable to take any stimulus you feel is necessary and target it on a few things—don't spread it as seed money for a thousand programs that'll never stop growing." Critics also have begun to target Obama's support for an industry-backed proposal that would allow money-losing companies that had been profitable to write off their current losses against profits going back five years, rather than two years as the law currently allows. That would lead to big tax refunds for homebuilders, banks, and others that made bundles of money during the housing boom but are drowning in red ink now. Congress already rejected the proposal—seen by many as a big bailout for the companies that caused the financial and housing mess in the first place—when it passed an initial stimulus bill last February.

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