4 Feb 2009

US Republicans push cheaper stimulus plan

5:01 pm on 4 February 2009

United States Senate Republicans on Tuesday offered their own, cheaper economic stimulus plans focused on tax cuts, pushing back against a $US900 billion Democratic plan they say encourages too much new spending.

As the Democratic-controlled Senate began thrashing out possible changes to the rescue package President Barack Obama has sought, Republicans indicated they may play hardball ahead of a vote that will require at least some Republican support.

"The American people are beginning to figure out what this package is, that it's not a stimulus package - it's a spending package," said Senator John McCain, an Arizona Republican who lost to Mr Obama in last year's presidential election.

Senators worked throughout the day to seek a bipartisan deal. Mr McCain and four other Republicans unveiled their ideas priced at $US445 billion, half the cost of Democratic version which started the day at $US885 billion.

It centered on cutting in half a 6.2% payroll tax on employees, reducing the corporate tax rate to 25% from 35% and lowering the bottom two income tax brackets to 10% and 5%, all for one year.

Mr McCain and Senators Lindsey Graham of South Carolina, John Thune of South Dakota, Richard Burr of North Carolina and Mel Martinez of Florida also proposed $US11 billion to help prevent home foreclosures and $US65 billion in state grants to build and repair bridges and roads.

Mr Obama wants legislation to jump-start the ailing economy will be on his desk for signing into law by 16 February and there appeared to be strong public support for Congress to act.