Obama says won't dictate to Congress on stimulus

WASHINGTON (Reuters) - President-elect Barack Obama said in an interview broadcast on Sunday he would not try to dictate to lawmakers the details of an economic stimulus package but would work closely with them to hammer out a plan.

"We're going to have a collaborative, consultative process with Congress over the next few days," Obama said on ABC's "This Week with George Stephanopoulos," just days after his top aides visited Capitol Hill to allay lawmakers' concerns about the roughly $800 billion package.

"We're not trying to jam anything down people's throats," he said.

Obama takes over from President George W. Bush on January 20 amid a deepening economic crisis. Government figures last week showed the unemployment rate surged in December to 7.2 percent, after a year in which employers slashed 2.6 million jobs from their payrolls, the most since 1945.

Obama wants passage of a stimulus plan by mid-February, saying it is crucial to jump-starting the economy.

Although most lawmakers agree with Obama that drastic action is needed, he has faced skepticism among some members of the Democratic-led Congress about aspects of his plan, such as a proposal for tax breaks to businesses to encourage hiring.

Some Democrats have said such proposals, as well as Obama's plans for $1,000 tax cuts for middle-class families, may do less to stimulate growth than government spending on such things likes new highways, bridges and schools.

Obama said in the ABC interview the bulk of his plan would go toward spending on such public works projects and on initiatives like laying down broadband lines and making homes and government buildings more energy efficient.

Obama said such projects delivered "the most bang for the buck" because they provide jobs to people, enabling them to spend more, which has ripple effects throughout the economy.

Some economists believe tax cuts may be less effective in stimulating economic growth than direct government spending. Some contend, for example, that tax cuts may end up being saved by worried consumers rather than spent, limiting their ability to spur growth.

On the other hand, a plan too heavy on spending may be a tough sell with some Republican lawmakers, who prefer tax cuts and believe too much of the government spending would be wasted and only exacerbate soaring budget deficits.

Among the tax cuts Obama said he favored was a plan to give early tax write-offs to business for purchases of new equipment, an idea that tends to be popular with Democrats and Republicans.

Aiming to bolster the case for his stimulus proposal, Obama on Saturday released a study prepared by incoming top White House economist Christina Romer and Vice President-elect Joe Biden's chief economic adviser, Jared Bernstein.

The study said up to 4 million jobs could be saved or created by Obama's stimulus plan, an increase from the 3 million jobs Obama said previously his proposal would save.

Obama said in the interview a recovery would also require personal sacrifice from Americans and scaling back other priorities.

"I want to be realistic here, not everything that we talked about during the campaign are we going to be able to do on the pace we had hoped," he said.

"Everybody's going to have to give," Obama said.

(Reporting by Caren Bohan; Editing by Peter Cooney)