Tax News

CCH (cch.taxgroup.com) reports:

  President-elect Obama signaled he is flexible about the size of the forthcoming economic recovery plan and the tax-cut provisions in it. He also maintained that Congress must take urgent action on a package because of rapidly deteriorating economic conditions. The president-elect's advisors in recent days indicated that the plan could cost as much as $775 billion, an amount that has been criticized in some quarters for having either too large or too small a spending portion.

  At a news conference on January 9, Obama noted that 524,000 jobs were lost in December and nearly 2.6 million were eliminated in the past year. The Bureau of Labor Statistics on January 9 reported the unemployment rate jumped from 6.8 percent in November to 7.2 percent in December 2008.

  In meetings with congressional leaders, Obama's economic advisors have met some resistance to the president-elect's spending and tax-cut priorities. Obama made clear that he welcomes any proposals that are designed to jump start the economy. "If somebody has an idea for a tax cut that is better than a tax cut we've proposed, we will embrace it," he asserted. The new administration also will support spending projects identified by Congress if they create jobs, are good for the economy and do not hamper control of the federal deficit in the long run.

  By Paula Cruickshank, CCH News Staff