NEW YORK (Reuters) - President-elect Barack Obama’s team is considering a plan to boost the recession-hit U.S. economy that could be far larger than previous estimates and might reach $1 trillion over two years, the Wall Street Journal reported on Saturday.
Obama aides, who were considering a half-trillion dollar package two weeks ago, now consider $600 billion over two years “a very low-end estimate,” the newspaper said, citing an unidentified person familiar with the matter.
The final size of the stimulus was expected to be significantly higher, possibly between $700 billion and $1 trillion over that period, it said, given the deteriorating state of the U.S. economy.
Officials with Obama’s camp have declined to comment on media reports about the size of the boost his administration might seek to give the economy through increased public spending and tax cuts.
Obama is due to take office on January 20.
Battered stock market investors around the world have taken heart from previous indications of how Obama’s administration may seek to kickstart growth in the world’s largest economy.
Obama has promised he will launch a massive public works program to help lift the U.S. economy out of recession.
The president-elect is likely to be briefed by his aides on the outline of the stimulus plan next week with a view to getting it passed by Congress by the time he is sworn in next month, the Journal said.
Economists have previously said they expect Obama to quickly sign a multi-year spending package that could be worth up to $750 billion, or almost 5 percent of U.S. gross domestic product.
The administration of President George W. Bush has been given authority by Congress to spend up to $700 billion in taxpayer money to rescue the nation’s banking system.
The money was originally set aside to buy up toxic mortgage-backed securities but is now being used to recapitalize banks and induce them to lend more freely.