Pelosi Favors Two-Step Stimulus, Seeks Permanent Tax Cut in 2009

For all of you who think Obama/congress are going to go crazy and raise taxes across the board... --------------------------------------------------------------------- WASHINGTON -- House Speaker Nancy Pelosi told the Wall Street Journal that she is considering a two-staged effort to boost the shaky U.S. economy, arguing for action now on a stimulus package of $60 billion to $100 billion, followed... [more]

For all of you who think Obama/congress are going to go crazy and raise taxes across the board... --------------------------------------------------------------------- WASHINGTON -- House Speaker Nancy Pelosi told the Wall Street Journal that she is considering a two-staged effort to boost the shaky U.S. economy, arguing for action now on a stimulus package of $60 billion to $100 billion, followed early next year by a companion measure that would include a "permanent tax cut." In an interview Thursday morning, the California Democrat pointed to weakness in the nation's jobs market, and urged the White House, long skeptical of Democratic-led stimulus efforts, to work with Congress in the waning days of President Bush's term. "Let's see if we can't do something, working together now, that gives us a two month jump," she said. She said any measure enacted in a lame-duck session of Congress this month would effectively be a downpayment on additional measures enacted later. "We'll take the longer view as soon as we take over in January." Ms. Pelosi said she doesn't favor a capital gains tax cut, as pushed by congressional Republicans. But she did say the "second piece" of the Democratic stimulus agenda should include a tax cut. The speaker said she prefers a direct tax cut over tax rebate like the one pushed by President George W. Bush a year ago. The speaker said a direct tax cut can have a more immediate impact on the economy, especially if the government adjusts tax withholding tables to speed dollars into worker paychecks. "The impact is faster than a rebate, which takes a few months to get into people's hands," she said in the interview. Details of the tax cut are yet to be determined. Aides separately said a later the tax relief could apply payroll as well as income taxes. Speaking a few hours before a scheduled meeting with top executives of U.S. automakers, Ms. Pelosi said she's inclined to provided additional assistance to the industry. She said Democratic leaders are examining a range of suggestions forwarded by members of Congress. They include tax credits to encourage the purchase of new autos and additional taxpayer-backed financing, beyond the $25 billion in loans already approved to help the industry retool to meet raised fuel-economy standards. Whatever ultimately happens, Ms. Pelosi suggested the government assistance should be tied to continued efforts to improve competitiveness. "I don't think you'll see much interest" in helping the industry, if aid goes toward "doing things the old way," she said. The speaker voiced support for efforts to help the industry "compete in the marketplace, in a green way." She added "there would be great interest among our members" in improving the industry's technology, "so that they're viable, that they're talking about investing in technologies that make them competitive, and that we're putting money into something that's going to thrive." More broadly, the speaker suggested she understands what is at stake. "We have an industry -- forget the companies -- an industry in our country that is at risk," she said, portraying the industry as a key part of the nation's industrial base. "Whatever we may think about the poor choices made by the companies, the industry is important to our country. The fate of the workers, their jobs, their health, their pensions, are important to them and to our economy." [less]