Locals OK with stimulus but drivers wary of car-tax incentive

LYNN – Steve Bruce likes the idea of giving drivers tax breaks if they’ll buy new cars; the problem is, he bought a new car last year and is not in the market for another.Bruce is among a legion of American consumers who want to do their share to get the staggering economy back on track but are not quite ready to bite at the ideas Congress and federal money experts have thought up.”There is still a lot of mistrust out there,” said Guy Tully, who thinks time is a major factor in getting the various economic revival plans to work.Business and consumer confidence, in Tully’s view, are major factors in the success or failure of stimulus ideas.Congress has certainly cooked up plenty of ideas for buoying the floundering economy. The car-buying proposal involves allowing purchasers to deduct interest on car loans and sales taxes similar to mortgage interest income tax deductions. The timing of the proposal’s introduction comes in the month when car dealers traditionally seek to lure consumers into sales.Another so-called Buy American provision requires projects financed by the measure to be built with domestically produced iron and steel. A new tax break for homebuyers is intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers. Local real estate professional Christopher Bibby said the biggest problem facing homeowners is adjustments in their mortgages that threaten their ability to make monthly payments.”The biggest thing they can do is work on a plan to adjust rates people are paying,” he said, cautioning that such a plan would require federal backing or partial support for the financial firms that secure mortgages.President Barack Obama warned Thursday that failure to act on an economic recovery package could plunge the nation into a long-lasting recession that might prove irreversible, a fresh call to a recalcitrant Congress to move quickly.In an op-ed in The Washington Post, the president argued that each day without his stimulus package, now exceeding $900 billion in the Senate, Americans lose more jobs, savings and homes. He painted a bleak picture if lawmakers do nothing.”This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse,” Obama wrote in the op-ed titled, “The Action Americans Need.”Senate Democratic leaders hope for passage of the legislation by today at the latest, although prospects appear to hinge on crafting a series of spending reductions that would make the bill more palatable to centrists in both parties.Obama rejected the argument that more tax cuts are needed in the plan and that piecemeal measures would be sufficient, arguing that Americans made their intentions clear in the election.”I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change,” he wrote.Senate moderates worked to cut billions of dollars from economic stimulus legislation Thursday in hopes of clearing the way for passage as the government spit out grim new jobless figures .Obama said he would “love to see additional improvements” in the bill, a gesture to the moderates from both parties who were at work trying to trim the $920 billion price tag.Increasingly, the events that mattered most were not the long roll calls on the Senate floor, but the private conversations in which the White House and Democratic leaders sought – either with the support of a large group of centrist lawmakers or without them – to clear the bill.”As I have explained to people in that group, they cannot hold the president of the United States hostage,” said Majority Leader Harry