January 8th, 2009
02:22 PM ET
5 years ago

Key Senate Democrats blast Obama tax proposals

President-elect Obama gave a speech Thursday about rescuing the struggling economy.
President-elect Obama gave a speech Thursday about rescuing the struggling economy.

WASHINGTON (CNN) - Even as President-elect Barack Obama was giving a major address on his economic stimulus plan, it was running into trouble with key members of his own party on Capitol Hill.

Several Senate Democrats emerged from a closed-door meeting of the Senate Finance Committee saying they oppose central tax provisions of the proposal.

In particular, members said they did not think the idea of giving employers a $3,000 tax credit for each employee they hire would work.

“I’m not that excited about that,” Sen. John Kerry told CNN. “Having a tax credit for hiring is not going to change that dynamic - creating a direct job will. So I’d rather spend the money on the infrastructure, on direct investment, on energy conversion and other kinds of things, much more directly and much more rapidly and much more certainly create a real job.”

Sen. Kent Conrad agreed. “I think it’s unlikely to be effective,” the North Dakota senator told CNN. “If you think about it, business people are not going to hire people to produce products that are not selling. Who is going to hire in the auto industry if you give them a $3,000 credit to make cars that people are not buying?”

A second Obama tax proposal several Democrats said they were down on is payroll tax credits - amounting to about $20 per paycheck, and totaling $500 per person and $1,000 for couple earning less that $200,000 a year.

Sen. Ron Wyden said he doubted that proposal to would do much to stimulate the economy.

“We have an example from the first stimulus that indicates just giving people $500 to $600 – while certainly welcome when there’s this much economic hurt – may not be the best use of stimulus,” Wyden said.

Instead, Wyden said pumping more money into infrastructure spending would be more effective in creating jobs.

Conrad agreed with Wyden.

“Twenty dollars a week? I don’t think that will be effective either. That is in terms of economic impact. We have got to focus on what is actually going to lift the economy,” Conrad said.

None of the senators CNN spoke with after the meeting said they thought the opposition to these provisions would derail the bill but suggested many meetings would be needed with the Obama team to hammer out an agreement.

First votes in the Finance Committee - which must approve the tax components of the stimulus plan - could come in the next two weeks, senators and aides said.


Filed under: Candidate Barack Obama
soundoff (181 Responses)
  1. $20 a week?

    The concerns of the dissenting democratic senators are reasonable and valid. I don't see the logic in giving a tax break that equates to just $20 a week in our paychecks. This is ALL the brightest minds in finance could come up with? What can you buy with $20 a week that will rapidly stimulate the economy? A new pair of shoes, pants, or a shirt can cost more than that. Milk, eggs, and bread are all over $4 in some places. Need I mention the cost of meat and poultry? And in case no one's noticed, gas prices are quickly rising again. $20 doesn't even get me a half tank.

    As far as I'm concerned, that amount is just a slap in the face when these corporate executives are still living high on the hog. If the president-elect's administration found that giving people a lump sum of money didn't really stimulate the economy with Bush's stimulus (probably because most of us used it to pay a bill or saved it), maybe it's time to think of something else. If the whole purpose is to get us out spending the money at retailers and such, why not create vouchers or send out debit cards that can only be used to purchase consumer products like groceries, clothing, and gasoline? It benefits taxpayers because for a little while those needs are being met elsewhere, and it benefits retailers because they are selling their merchandise. I mean let's start thinking outside the box for once.

    I think we can all agree that $20 a week won't make much difference in each of our personal financial situations, let alone begin to fix what's happening to the US economy. I will be writing my state's representatives tonight to say as much.

    January 8, 2009 05:20 pm at 5:20 pm |
  2. EBC

    Well...well...well....."Key Democrats" huh?

    What a joke. These so-called "Key" folks aren't so key if they can't get their own BIG EGO heads out of their tight butts, I'm sure President Elect Obama will show them how to get a colon cleansing REAL quick.

    January 8, 2009 05:23 pm at 5:23 pm |
  3. clifford

    I said that the Democratic party was imploding BUT all I got was wise as.s comments!!

    January 8, 2009 05:24 pm at 5:24 pm |
  4. james

    Idiot speaks to other idiot democrats and the socialist Obama pretends to be president! CNN is the proponent socialist network and benefactor of Obama drama!

    January 8, 2009 05:26 pm at 5:26 pm |
  5. TX_C

    Infrasture projects are not going to help people in the Technology and other private sector industries. We are losing our jobs in large numbers.

    We need leaders that understand the over all "JOB" problem in this country. People in these fields/white-collar jobs pay the most taxes and when our jobs go there goes the taxes….

    Senators need to work with PE to come up with a resolution. Our country is in a mess….

    January 8, 2009 05:26 pm at 5:26 pm |
  6. TRYING TO B OBJECTIVE

    In the past some employers lied to get the tax credit, turned in false ss# and other false inf. to get tax credit. We need checks and balances TO KEEP THE GREADY ONES FORM USING THE SYSTEM. I believe in order to come up with solutions to so many problems all sides HAVE to be heard. If Kerry is expressing his opinion, it should be ok. He did offer another solution. At least he didn't criticize, keep his mouth shut. All of you sideline quarterbacks take some time, write to your representives make some suggestions, form a group, have discussions, put your ideals on paper send them to the people in WASH>DC who serve YOU. Take an active part you are the government. We elect our officials then sit back and complain.

    I do believe most of the very, very, rich could care less about the American people. They want more money, power, and FREE LABOR. This is our fault, get involved this is what our new pres. wants

    January 8, 2009 05:28 pm at 5:28 pm |
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