The Los Angeles Times
Thursday 10 January 2008
Fearing a recession, she'll seek funds to stem foreclosures, help pay heating bills, expand unemployment insurance and - in case of a prolonged slump - offer tax rebates.
Washington - 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.
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GOP Presidential Candidates Spar Over Economy, Iran
By Steven Thomma
McClatchy Newspapers
Thursday 10 January 2008
Myrtle Beach, SC - The presidential campaign turned South on Thursday, as Republicans vied over who could offer the toughest language on Iran and traded barbs over who's the true conservative heir to Ronald Reagan.
The candidates also took turns offering proposals to shore up an economy that's showing signs of trouble and grabbing increased attention from voters. All insisted that a recession could be averted, but only with Republican policies on energy, spending and taxes.
"This is a rough patch, but I think America's greatness lies ahead of us," said Arizona Sen. John McCain in a refrain echoed across the stage.
The 90-minute debate televised on the Fox News Channel marked the turn of the Republican campaign to two almost simultaneous contests - with voting next in Michigan on Jan. 15 and in South Carolina on Jan. 19.
Candidates looked for punchy one-liners to grab attention, backed up by serious proposals on economic and foreign policy issues, all aimed at different groups of voters.
In one moment that could resonate with Christian conservatives who could dominate South Carolina voting, former Arkansas Gov. Mike Huckabee forcefully defended an earlier statement backing the biblical admonition that wives should submit to their husbands.
"I'm not the least bit ashamed of my faith or the doctrines of it. I don't try to impose that as a governor, and I wouldn't impose it as a president," he said as the audience at the Myrtle Beach Convention Center erupted in applause.
"But I certainly am going to practice it unashamedly, whether I'm a president or whether I'm not a president."
He went on to explain that the Bible also commands husbands to submit to their wives and that marriage requires each spouse to give 100 percent to the other.
While all the candidates appealed for support, the debate at times looked like two smaller debates - one between Huckabee and former Tennessee Sen. Fred Thompson - and one between McCain and former Massachusetts Gov. Mitt Romney.
One of the most animated exchanges came when the candidates were asked whether they backed the U.S. Navy's cautious response when Iranian boats harassed U.S. military vessels in the Persian Gulf recently.
The candidates backed the U.S. naval commanders.
But Huckabee said that anyone who challenges the Navy again should be prepared to go to the "gates of hell." Thompson jumped in, saying anyone testing the U.S. Navy might soon meet the "virgins" that Islamic terrorists expect to meet in heaven.
Rep. Ron Paul of Texas called the bellicose language frightening and reminiscent of the reaction to an alleged naval exchange in 1965 that led to the Vietnam War. "I would certainly urge a lot more caution than I'm hearing here tonight," Paul said.
Romney cracked that Paul should stop reading Iranian propaganda, drawing what sounded like some boos from the audience and a steely glare from Paul.
Thompson took on Huckabee at another point, calling him a liberal and saying that Huckabee's criticism of President Bush's foreign policy amounted to a "blame America first" philosophy.
"That's not the model of the Reagan coalition, that's the model of the Democratic Party," Thompson said to applause. Candidates invoked Reagan's name more than 30 times, for themselves or against their rivals.
"The Air Force has a saying that says that if you're not catching flak, you're not over the target," Huckabee responded. "I'm catching the flak - I must be over the target."
Romney and McCain, locked in a close battle for next Tuesday's Michigan primary, traded jabs over the loss of jobs in the auto and manufacturing industries.
Romney criticized McCain for telling Michigan voters that some U.S. jobs have disappeared and won't come back. "I'm going to fight for every single job, Michigan and South Carolina," he said.
"Sometimes you have to tell people things they don't want to hear," McCain responded. "There are some jobs that aren't coming back to Michigan. There are some jobs that aren't coming back to South Carolina."
He said, however, that he would help those who lost their jobs.
The emphasis on the economy underscored the shifting politics of the campaign, as the stock market starts the new year with sharp losses and the race turns to Michigan and South Carolina, where the economy has risen as an issue in the eyes of voters.
All the candidates said they'd take several steps to boost the economy, including energy policies to curb gas prices and an end to the subprime mortgage crisis.
Former New York Mayor Rudy Giuliani said he'd push through the "biggest tax cut in history." Huckabee said he'd cut income tax rates and control education and health care costs. McCain said he'd make the Bush tax cuts permanent and control federal spending. Romney said he'd cut middle-class taxes.
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