What's In Obama's Stimulus Plan?
MADELEINE BRAND, host:
From the studios of NPR West, this is Day to Day. I'm Madeleine Brand.
ALEX COHEN, host:
And I'm Alex Cohen. Coming up, troops returning from war enter a new kind of battlefield: the struggling job market.
BRAND: But first today, President Obama is on Capitol Hill to discuss his economic stimulus package with congressional Republicans. It costs more than $800 billion, which is making a lot of Republicans wince. NPR's Andrea Seabrook is here now to explain what's in this bill, the fine print. Hi, Andrea.
ANDREA SEABROOK: Hi.
BRAND: So this is costing, what? $825 billion?
SEABROOK: Yes. It's about 825. That's about - a third of it is in tax cuts, and about two-thirds of it is in direct spending for things like road projects, waters, levies, you know, all kinds of infrastructure projects, but also all kinds of programs across the board. You've got school lunch programs and all kinds of direct government programs that haven't been funded, at least, for years, that they think the money will get out into the society as quickly as possible. But Madeleine, don't get attached to that number, that $825 billion number, because remember, the Senate still has to tinker with this and may change that number. It could go up. In fact, it could get closer to a trillion.
BRAND: Wow. So as you say, a lot of it is in tax cuts, and that ought to please Republicans, right?
SEABROOK: Well, you'd think so, but they're saying that the tax cuts - that there are some good tax cuts in this bill, and there are some that are not targeted correctly. They would like to see more tax cuts for businesses, especially for businesses to invest in equipment and be able to write that off on their taxes, to hire new employees, this sort of thing. There are tax incentives in this bill for that, but a lot of the money goes to an individual income-tax reduction. In other words, for people who make - couples who make $175,000 or less a year, they'll see a tax cut of about a thousand dollars - 500 for individuals making 75 or less.
So, you know, there's a lot of individual income tax there that Republicans say would be better spent on business tax cuts. Also, Republicans really object to how much spending there is here. Over $500 billion of it is for actual, direct government spending, as we were saying, and they say that there's some wacky stuff - money to seed the National Mall with grass. Until just now, there was a provision that would fund poor people's contraceptives. It looks as if this provision maybe pulled out of the bill, that Nancy Pelosi, the Speaker of the House, is wavering at this point on that. And apparently, President Obama has asked for that to be pulled from the bill directly.
So the point is there are a lot of things Republicans object to that being funded, as well, in the spending portion of the bill.
BRAND: Mm Hmm. Well, it seems also to get down to basic philosophical differences between the two parties. One is on the Democrats' side; that you should spend to spur the economy. And on the Republican side, cut taxes as a way of spurring economic growth. What do economists say is the best way?
SEABROOK: Well, you know, that's very interesting. The economists themselves often are cut into two ideological camps exactly along the lines that you laid out. What is interesting here is the - some of the politics are kind of messy. For example, this is likely to be the biggest tax cut Republicans are going to even - going to get a chance to vote for in the next couple of years.
I mean, this is a huge tax cut, $350 billion worth. It rivals the size of President Bush's tax cuts in '01 and '03. So for the most part, it seems, the non-ideological economists, if you can call them that, say that probably this kind of package that does both things is the kind of thing that will work, at least some.
BRAND: (Laughter) At least some.
(Soundbite of laughter)
BRAND: I like how you're hedging your bet there.
SEABROOK: Voodoo, Madeleine. (Laughing) Economy is voodoo.
BRAND: NPR's Andrea Seabrook. Thanks Andrea.
SEABROOK: You're welcome.
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