Discussion is swirling in the Obama camp and among pundits of the possibility of a second stimulus package. Laura Tyson, an adviser on the president’s Economic Recovery Advisory Board, said in a speech in Singapore yesterday that the $787 billion stimulus package was too small and that the White House underestimated the economic downturn:

“The economy is worse than we forecast on which the stimulus program was based,” Tyson, who is a member of Obama’s Economic Recovery Advisory board, told the Nomura Equity Forum. “We probably have already 2.5 million more job losses than anticipated.”

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The United States’ next major spending package is nearly fully formulated, expected to total somewhere in the range of $700 billion – $1 trillion. In what has been deemed the “American Recovery and Reinvestment Plan,” the latest stimulus package has been designed around infrastructure repairs, unemployment relief, state budget recovery, and most recently a large tax-cut initiative designed to garner Republican support. According to the Wall Street Journal, a $300 billion tax-cut program will be aimed at both individuals and businesses:

Republicans and business leaders hadn’t seen specifics of the proposals Sunday night, but welcomed the idea of basing a bigger proportion of the stimulus plan on tax cuts. Their response suggests the legislation could attract relatively broad support, and it highlighted the Obama team’s determination to win backing from varied interests.

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