Obama met with lawmakers from both parties including House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., as well as Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John Boehner, R-Ohio.
Obama is also planning to deliver a major speech on the economy on Thursday, a senior Democratic official told CNN.
The president-elect will propose roughly $300 billion in tax cuts for individuals and businesses. He has not publicly put a price tag on his overall stimulus plan, though his advisers have said they expect it to fall between $675 billion and $775 billion, 40% of which would be in tax cuts.
According to an Obama spokesman, several tax breaks are under serious consideration.
Middle-class tax cut: Obama would offer a tax cut equal to $500 a year for individuals and $1,000 for couples. The credit would work essentially as a payroll tax credit, meaning the money could be delivered fairly quickly. Companies could simply reduce the tax they withhold from employees' paychecks.
The tax credit is likely to be offered only to those below a certain income level, but the Obama team hasn't specified where the cut-off point would be. The credit also would be refundable, meaning that even tax filers without any tax liability -- typically very low-income workers -- would receive one.
The credit is similar to one Baa proposed during the campaign.
"What's required for the economy right now [is] to put more money into the pockets of ordinary Americans who are more insecure about their jobs, who are continuing to see rising costs in an area like health care, who are struggling to make ends meet," he said Monday.
Business break for losses: Obama is considering a tax break for businesses that book losses in 2008 and 2009.
The stimulus plan may extend what's called the net-operating loss carryback to five years, up from two years currently. The provision lets companies apply their losses to past and future tax bills so that they can get money back on taxes they've already paid or would otherwise have to pay.
Job creation: Obama would establish a new credit for businesses that either create jobs in the United States or avoid layoffs.
Small business write-off: Obama would increase the amount of expenses small businesses can write off to $250,000 in 2009 and 2010, up from $125,000 currently.
While political observers believe the now-added emphasis on business tax cuts as a major part of a stimulus package is one way the Obama team hopes to attract Republican support, that's not how the Obama camp sees it.
"We're working with Congress to develop a tax-cut package based on a simple principle - what will have the biggest and most immediate impact on creating private sector jobs and strengthening the middle class. We're guided by what works, not by any ideology or special interests," an Obama spokesperson told CNNMoney.com in an e-mail.
Obama on Monday said it's "very important to have a balanced recovery and reinvestment package."
In his weekly radio and video address on Saturday, Obama offered a broad stroke sketch his proposal, which he called the American Recovery and Reinvestment Plan. In addition to a tax cut for workers, he said he would propose to:
- double renewable energy production and make public buildings more energy efficient;
- rebuild crumbling roads, bridges and schools;
- computerize the health care system;
- and modernize classrooms, labs and libraries.
"Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn," Obama said. "That's why we need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term."
The main goal of his plan: to create 3 million new jobs. Most would come from the private sector, he said.
Learn more, go to http://money.cnn.com/2009/01/05/news/economy/obama_stimulus/index.htm?postversion=2009010505?cnn=yes