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.