(Reuters) - President-elect Barack Obama, hoping to boost a struggling economy, has proposed a stimulus package that some experts estimate could cost as much as $190 billion.
At the same time, the United States is facing record budget deficits of at least $500 billion. Some analysts say the deficit could go as high as $1 trillion next year.
Obama has said he would:
—Enact a windfall profits tax on oil companies to give taxpayers an energy rebate.
—Give businesses a $3,000 refundable tax credit for each new full-time employee hired in the United States over the next two years.
—Allow small business to immediately write off up to $250,000 in spending for new equipment and property through the end of 2009. The stimulus package enacted earlier this year provided for the $250,000 investment expensing limit only through the end of this year.
—Eliminate capital gains taxes on investments in small businesses.
—Make $25 billion immediately available for the construction and repair of roads, bridges, schools and other infrastructure.
—Provide $25 billion to states to help them cope with the economic downturn without having to raise property taxes or cut vital services.
—Make $50 billion in loan guarantees available and keep other options open to help U.S. automobile manufacturers retool and develop a new generation of fuel-efficient cars. Congress has made $25 billion available.
—Implement a 90-day foreclosure moratorium for homeowners making good faith efforts to pay their mortgage debt.
—Extend unemployment insurance for long-term jobless workers who have exhausted their benefits, and temporarily suspend taxes on those benefits.
—Temporarily allow penalty-free withdrawals of 15 percent from tax-preferred retirement accounts up to $10,000.
—Suspend rules requiring retirees to begin withdrawing from retirement accounts six months after they reach the age of 70.
—Increase home heating cost aid.
—Instruct the secretaries of the Treasury and Housing and Urban Development to use their existing authority to more aggressively modify the terms of mortgages.
—Reform the bankruptcy code to assist homeowners and remove legal impediments to encouraging more mortgage restructuring.
—In the longer term, Obama would roll back some of Bush’s tax cuts for the wealthy. He proposed a permanent tax cut of $500 for most individual workers and $1,000 for families. He also would eliminate taxes for seniors making up to $50,000.
—To help jump-start the economy, the tax cuts would be expedited through refunds based on 2007 tax returns. He would also provide a 10 percent refundable tax credit for mortgage interest to taxpayers who do not itemize their returns.
—On trade, Obama has promised to review the North American Free Trade Agreement and use trade agreements to advance good labor and environmental standards around the world. He has also promised to end tax breaks that encourage companies to shift U.S. jobs overseas.
Reporting by Donna Smith; Editing by David Alexander and Eric Walsh