Obama is looking at $850 billion stimulus

WASHINGTON — Anxious to jolt the economy back to life, President-elect Barack Obama appears to be zeroing in on a stimulus package of about $850 billion, dwarfing last spring's tax rebates and rivaling drastic government actions to fight the Great Depression.

Obama has not settled on a grand total, but after consulting with outside economists of all political stripes, his advisers have begun telling Congress the stimulus should be bigger than the $600 billion initially envisioned, congressional officials said Wednesday.

In other economic news Wednesday, Chrysler LLC said it will shut all 30 of its plants, idling 46,000 workers, for at least a month starting Friday as unsold cars and trucks pile up at showrooms.

Ford Motor Co. said it will idle most of its North American assembly plants for the first week of January, while General Motors Corp. said a new factory making engines for the Chevrolet Volt electric car is being delayed to conserve cash.

GM, the biggest U.S. automaker, and No. 3 Chrysler have asked for a combined $14 billion in federal aid to survive until March 31. U.S. sales at Detroit-based GM fell 22 percent through November, while Chrysler's tumbled 28 percent, the most among major automakers.

Ford spokeswoman Angie Kozleski says the normal two-week holiday shutdown will be extended to Jan. 12 at all operating assembly plants except those in Claycomo, Mo., near Kansas City and the Dearborn, Mich., truck plant.

Members of the United Auto Workers union on temporary layoff are eligible to receive 95 percent of their usual take-home pay, from a combination of unemployment-insurance benefits and a supplement from automakers.

Regarding the economic stimulus package, Obama is promoting a recovery plan that would feature spending on roads and other infrastructure projects, energy-efficient government buildings, new and renovated schools and environmentally friendly technologies.

There would also be some form of tax relief, according to the Obama team, which is well aware of the political difficulty of pushing such a large package through Congress, even in a time of recession. Any tax cuts would be aimed at middle- and lower-income taxpayers, and aides have said there would be no tax increases for wealthy Americans.

While some economists consulted by Obama's team recommended spending of up to $1 trillion over two years, a more likely figure seems to be $850 billion. There is concern that a package that looks too large could worry financial markets, and the incoming economic team also wants to signal fiscal restraint.