- The Washington Times - Monday, December 29, 2008

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.

“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,” Mr. Axelrod said.

The adviser appeared Sunday on NBC’s “Meet the Press” and CBS’s “Face the Nation.”

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 be worth about $140 billion in 2009 and 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,” Mr. 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, said Mr. Axelrod, who 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 Bush’s tax cuts, Mr. 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 Mr. Bush’s tax cuts while adding in new middle-class tax cuts doesn’t mean Mr. Obama is raising taxes, Mr. Axelrod argued, saying the two moves would “just restore some balance” and equal a “net tax cut for the American people.”

Mr. Axelrod also said Mr. Obama wants to create as many as 3 million jobs, but wants them to come in areas that will help the nation’s economy in the future. Mr. 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,” Mr. Axelrod said. “And in this way, we’re not only creating work, but we’re laying the foundation for the future of our economy.”

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