FACTBOX: German plans for economic stimulus package

(Reuters) - German government leaders met on Monday to discuss a second package of stimulus measures to help Europe's biggest economy weather a deep recession.

Chancellor Angela Merkel's coalition -- a partnership of her Christian Democrats (CDU), their Christian Social Union (CSU) allies and the center-left Social Democrats (SPD) -- agreed a first package in November worth an estimated 31 billion euros over two years, but it has been criticized as too modest.

Below are highlights of what is known about the contents and timing of the second package:

SIZE

The CDU/CSU have said their proposals are worth about 50 billion euros ($69.63 billion) over the next two years, while the SPD plan wants a package totaling 40 billion euros over the 2009-2010 period.

TIMING

The outlines of the package may be agreed at the meeting on Monday, but details are not expected to be finalized until a meeting due on January 12 or, failing that, in the second half of the month.

CDU/CSU PROPOSAL

The CDU/CSU agreed at a meeting on Sunday that the new stimulus should include billions of euros in new spending on infrastructure. They also want to cut health insurance fees and raise the tax-free salary allowance to 8,000 euros from 7,664.

Their plans foresee steps to eliminate so-called "cold progression," a process in which taxpayers are bumped up into higher tax brackets even when their real incomes have not grown. This occurs in Germany because tax brackets are not adjusted automatically for inflation.

SPD PROPOSAL

The SPD is against tax cuts, arguing that German consumers are likely to save rather than spend additional income they receive from such measures. The party agreed on Sunday to proposals that include 10 billion euros in new spending on infrastructure, cuts in health insurance fees, higher child benefits and incentives for people to trade in their old polluting cars for climate-friendly autos. To help pay for its plan, the SPD wants to raise the top income tax rate to 47.5 from 45 percent and apply it to those making 125,000 euros per year, down from 250,000 now.

LIKELY DEAL

The ruling parties appear to have narrowed their differences and are coalescing around a new stimulus package that would include double-digit billions of euros in new spending on infrastructure, modest tax relief and cuts in health insurance fees. Support for the car industry, via consumer incentives, is also likely. The SPD idea of raising taxes on top earners is unlikely to see the light of day due to firm CDU/CSU opposition.

(Compiled by Noah Barkin)