Obama adviser: Slowing economy won't halt tax cuts

By JESSE J. HOLLAND
Associated Press Writer

WASHINGTON (AP) -- A top adviser to President-elect Barack Obama said Sunday that the country's slowing economy won't keep the new administration from fulfilling its plans for a middle-class tax cut.

"We feel it's important that middle-class people get some relief now," Obama adviser David Axelrod said.

Middle-class tax cuts will be part of the new administration's stimulus plan, Axelrod said. "This package will include a portion of that tax cut that will become part of the permanent tax cut that he'll have in his upcoming budget," Axelrod said.

The incoming administration is considering tax cuts of $1,000 for couples and $500 for individuals that will be delivered by reducing the tax withheld from paychecks. That plan has been estimated to cost about $140 billion over 2009-2010.

The lump-sum rebates issued earlier this year were used by many people to pay down debt, rather than spending the money and boosting the economy as the administration had hoped.

"People need money in their pockets to spend," Axelrod said. "That'll get our economy going again."

Congress should have a new stimulus plan ready for the new president to sign as soon as possible, Axelrod said.

He placed the cost of a planned Obama stimulus package at "$675 billion to $775 billion" but said "those numbers are not fixed."

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