Obama unveils $1,000 tax cuts for middle-class families

US President-elect Barack Obama said yesterday he would offer working families a $1,000 tax cut and improve energy efficiency in millions of American homes in order to create jobs and stimulate the economy.

"To get people spending again, 95 per cent of working families will receive a $1,000 tax cut - the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget," he said in a speech outside Washington.

He said his economic recovery plan would extend jobless aid and healthcare coverage for the unemployed and include proposals to double production of alternative energy in the next three years and improve energy efficiency for millions of homes.

President-elect Barack Obama sought to rally support yesterday for a massive fiscal stimulus package by warning that the United States could remain mired in recession for years without bold action.

Mr Obama, who will take office on January 20, promised to set a new course for the economy and move quickly to toughen the financial regulatory system.

Mr Obama said the cost of the package of tax cuts and spending measures he is proposing would be "considerable" but that it was needed to keep the economy from sinking into a vicious cycle of weak consumer spending, job losses and a further tightening of credit markets.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," Mr Obama said in a speech on the economy at George Mason University.

He asked the US Congress to work "day and night" to swiftly pass a plan for tax cuts and public works spending that could total nearly $800 billion.

Mr Obama and his advisers have been talking with lawmakers in the Democratic-led Congress to craft the two-year stimulus plan and is seeking bipartisan support for the plan.

The package will include tax cuts for families and business and money for the building of new roads, bridges and schools. It would also pay for renewable energy projects, aid to cash-strapped state governments and enhanced unemployment benefits.