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Clinton to unveil $70-billion economic boost
Amid growing signs of trouble in the U.S. economy, Democratic presidential candidate Hillary Rodham Clinton will propose a $70-billion package today to stimulate the economy and will urge Congress to stand ready to offer a $40-billion rebate to taxpayers if the slump continues.
The New York senator's economic package, to be announced in a speech in Los Angeles, includes temporary measures to quickly inject money into the economy and help middle-class families, including housing aid, to stem foreclosures; energy assistance; and liberalized unemployment insurance.
The initiative, larger than an economic stimulus proposed last month by former Sen. John Edwards of North Carolina, one of her rivals for the nomination, comes as Clinton is trying to build on her victory in the New Hampshire primary. The package dovetails with her efforts to appeal to middle- and lower-income workers, an important part of the coalition that has backed her in early voting.
"I believe we have a lot of families who are really hurting," Clinton said Thursday in a telephone interview. "I think we're sliding toward a recession."
Bipartisan concern about a possible recession, the housing slump and rising energy prices has been growing. Federal Reserve Chairman Ben Bernanke said Thursday that the central bank may be ready to make "substantive" interest rate cuts to avoid recession. And the White House also is considering an economic stimulus plan.
The economy -- an issue that had been eclipsed on the campaign trail by the Iraq war -- is a matter of increasing attention for the candidates. Stumping in economically battered Michigan, which holds its primary Tuesday, Republican contenders have been talking more about the issue but not called for a stimulus.
Among Democrats, Edwards has proposed a $25-billion jobs plan and urged Congress to be ready to pass $75 billion more upon evidence ofa recession.
Like Edwards' plan, Clinton's approach differs from the last time Congress -- then controlled by Republicans -- enacted an economic stimulus plan. That 2003 law provided aid to states and tax breaks for businesses and individuals.
Clinton's plan packages new proposals with ideas she has championed in the past. A memo describing the plan says it meets her three principles for economic stimulus: fast-starting, temporary and progressive. The plan is designed to be immediate and to last only through 2008.
Key elements include a $30-billion fund to help states and cities stem foreclosures in the subprime mortgage crisis, and a 90-day moratorium on subprime foreclosures.
She will also propose $25 billion in emergency home-heating assistance and $10 billion to expand unemployment insurance.
If economic conditions worsen, Clinton plans to say, Congress should provide $40 billion in direct tax rebates to middle-class families.
Clinton began talking about the possible need to stimulate the economy last month in a speech on Wall Street. But Gene Sperling, one of her senior economic advisors, said Clinton moved cautiously before drawing up a plan because of concerns about adding to the federal deficit with a cash infusion to the economy.
Most of her campaign promises have included plans to offset new spending, but her stimulus plan does not.
Sperling said Clinton's decision to offer a plan now came after recent reports of continuing contraction in the manufacturing sector and last week's Labor Department report that the unemployment rate had jumped to a two-year high of 5%.
Some economists are skeptical that anything other than Fed interest-rate cuts can effectively avert a recession. They say Congress often does not manage to pass stimulus measures until it is too late.