New York: President-elect Barack Obama’s team is considering an economic-stimulus program of up to $1 trillion to revive the economy, a media report says.
Quoting people familiar with the process the Wall Street Journal said, “Obama’s economic team is considering an economic-stimulus program that will be far larger than the two-year, half-trillion-dollar plan under consideration two weeks ago.”
The daily further said, “Obama aides and advisers have set USD 600 billion over two years as “a very low-end estimate,” and the final number is expected to be significantly higher, possibly between $700 billion and $1 trillion over two years.
However, transition spokeswoman Stephanie Cutter denied that any decisions have been made on the scope of the plan and the newspaper quoted her as saying “any speculation on size or scope is premature at this time.”
Christina Romer, who will lead Obama’s Council of Economic Advisers, is trying to build political consensus around a larger number before it is presented to Congress in early January, WSJ added.
As economic conditions worsen, Obama’s economists now say the package will have to be larger than expected to ensure the needed stimulus actually reaches the economy.
“The economic team would brief Obama next week, largely about the size of the package. Discussions are still under way about content,” the report said. Obama is scheduled to take office on 20 January.
On the upper bounds, liberal economists in the team have staked out $600 billion in the first year and $300 billion to $600 billion in the second, depending on economic conditions in 2010, the WSJ said.
Quoting people familiar with the discussion the WSJ said Lawrence Lindsey, President George W Bush’s first National Economic Council (NEC) director, has counseled $800 billion to $1 trillion in stimulus over two years.
Meanwhile, Harvard University economist Martin Feldstein, a Reagan White House economic adviser, has raised his initial, one-year, $300 billion figure to at least $400 billion, the report added.
Obama has said the package would include an initial tax cut and a massive infusion of funds for roads, bridges, water systems, school repair, spreading broadband access, promoting health-care information technology, improving energy efficiency in buildings, renewable-energy projects, and assisting struggling state and local governments.
Earlier, the world’s largest economy had announced $700 billion plan primarily to shore up the fortunes of the country’s battered financial institutions.