Obama unveils $120 billion economic stimulus plan

LAS VEGAS - Democratic presidential hopeful Barack Obama on Sunday unveiled an economic stimulus package costing up to $120 billion that his campaign said would put an immediate $250 in the hands of workers and seniors, stem the foreclosure crisis and cover state budget shortfalls.

Obama, a senator from Illinois, called on the government to make available a $250 tax credit to 150 million workers to offset the payroll tax paid on the first $8,100 of earnings. He urged a further $250 tax credit per worker if employment declines three months in a row.

He also would bump up Social Security payments to seniors who would not benefit from the credit based on income with a one-time $250 payment, with another $250 if employment declines three months straight.

Obama also pledged $10 billion to increase pre-foreclosure counseling and help "responsible homeowners" refinance their mortgages or sell their homes.

The plan also calls for $10 billion for states and local governments that have seen revenue shortfalls as a result of the housing crisis, caused by falling property values and sales tax declines.

In addition, Obama called for $10 billion to lengthen the period of eligibility for those receiving unemployment insurance, while loosening the criteria to become eligible to include many part-time and nontraditional workers.

The total package would cost $75 billion, plus another $45 billion if the economy weakened.

The plan, which expands on his campaign platform and would be financed through debt, outlines tax relief well ahead of a decision on who will secure the Democratic nomination or which candidate will win the general election in November.

The plan would need approval from the current Congress and President Bush to go forward, but the campaign put forth the plan as something Obama would pursue if he were president now.

Austan Goolsbee, a senior economic policy adviser for the Obama campaign, said Obama's plan was slightly larger than the $110 billion package advocated by his chief rival, Sen. Hillary Rodham Clinton, on Friday.

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