WASHINGTON – House Republican leaders presented President Barack Obama on Friday with proposals to stimulate the economy that rely exclusively on tax cuts and envision none of the federal spending backed by Democrats and the administration.
The alternative includes across-the-board cuts in the two lowest income tax brackets, placing unemployment benefits off-limits to taxation and a new $7,500 break for home buyers who make a minimum down payment of 5 percent.
Another provision would also cut taxes for small businesses.
Republican Reps. John Boehner of Ohio and Eric Cantor of Virginia outlined the approach at a White House meeting with congressional leaders of both parties at which Obama urged passage of legislation by early February to revive the economy.
House Democrats plan a vote next week on an $825 billion plan that includes about $275 billion in tax cuts and $550 billion in new spending. Much of the spending would come in politically popular areas such as health care, food stamps and road construction and would include money designed to blunt the impact of state budget cuts affecting schools.
The GOP alternative reflected fault lines in the debate over the first major issue to arise since Obama and the new Democratic-controlled Congress took office.
"Rather than spending too much, too late as the congressional proposal does, our proposals let the American people keep more of what they earn to spur investment, encourage savings and create more private sector jobs," Boehner, the GOP's House leader, said in a statement.
While Republicans claimed their approach provided for more in tax relief than the Democrats' measure, they said they were still awaiting official estimates. They also said they could not estimate the number of jobs it would create.
It called for reducing the current 10 percent bracket to 5 percent, affecting a taxpayer's first $8,350 in income, and lowering the existing 15 percent bracket to 10 percent, covering income from $8,351 to $33,950.
Small business owners could take a tax deduction equal to 20 percent of their income.
Many Republicans have criticized the extent of spending advocated by Democrats.
"We understand that there will be spending in the final bill, the Democrats have made that completely clear," said Brad Dayspring, a spokesman for Cantor, the No. 2 Republican in the House.
Separately, Senate Republican leader Mitch McConnell, R-Ky., renewed his call for the federal government to provide help to the states in the form of loans rather than grants, as Democrats prefer.
In an appearance at the National Press Club, McConnell said of Obama: "I think he's open to new ideas. I've given some of mine. ...We'll see as we go along how many of them are incorporated."
http://news.yahoo.com/s/ap/20090123/ap_on_go_co/republicans_economy
Topic: House GOP sees stimulus in tax cuts, not spending (Read 417 times)