President Barack Obama said the Treasury Department will begin ordering employers today to cut taxes taken from workers' paychecks as part of his effort to boost a worsening U.S. economy, Bloomberg reported.
Obama, speaking in his weekly address, said a "typical" family will start getting at least an extra $65 a month by April 1 as a result of the $787 billion stimulus package he signed into law earlier this week. He said the measure is only a "first step."
The president has pledged $275 billion to help struggling homeowners avoid foreclosure and plans to announce measures to stabilize banks. Companies from General Motors Corp. to Alcoa Inc. are slashing jobs and cutting production as the recession threatens to become the worst slump in the postwar era.
"None of this will be easy," Obama said, repeating what's become a frequent comment by the president. "The road ahead will be long and full of hazards."
Obama also talked about the importance of reining in the ballooning federal deficit. He will hold a so-called fiscal- responsibility summit at the White House on Feb. 23, with about 130 people invited to attend, including about 50 members of the House and Senate from both parties, according to Kenneth Baer, spokesman for the White House budget office.
Republicans are concerned about the borrowing and spending under the Democratic leaders' bill, which was "written in a backroom and rushed through Congress," Representative Dave Camp, a Republican from Michigan, said today. The budget outline that Obama will release next week will show how serious the president is about dealing with the tough issues and getting spending under control, he said.
"Congressional Democratic leaders' track record on spending taxpayers' money wisely this year is already lousy," Camp, the ranking Republican on the House Ways & Means Committee, said in his party's weekly radio address. "Next week, we have a chance to hit 'reset' and try again to work in a transparent and bipartisan way to address our nations' problems."
The guest list for the Feb. 23 summit includes representatives from labor unions and groups such as the Business Roundtable and the American Medical Association.
They will "discuss how we can cut the trillion-dollar deficit that we've inherited," Obama said today.
Obama also said the budget he will unveil next week is "sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline."
The Treasury department today said it began directing employers to cut taxes withheld from paychecks. The department and the Internal Revenue Service developed withholding tables to include the 'Making Work Pay' credit and guide employers. The tables were released on the IRS website.
General Motors and Chrysler LLC, propped up with federal aid, on Feb. 17 submitted their latest requests for as much as $21.6 billion in new loans, saying they need more cash to survive while they shed jobs and factories to trim expenses.
Obama's automotive task force, entrusted with the fates of the two automakers, convened for the first time yesterday and confronted the requests for the new loans. The panel has the power to force the automakers into bankruptcy or a merger.
Alcoa, the largest U.S. aluminum producer, also is cutting production, firing workers and selling units. The New York-based company, which in January reported its first quarterly net loss in six years, said it may make deeper cuts if demand keeps falling.