President-elect Barack Obama and his team of economic advisers have been busy at work devising a blueprint for the stimulus package they hope to pass next month. If all goes according to plan, Democratic Congressional staff members will have an outline to draft legislation from by the the end of the year. On Saturday, the New York Times reported on those items likely to be included in the Obama administration’s initial proposal:

About a fifth of the Obama package could go toward health care, Democrats say. The biggest piece would be up to $100 billion to subsidize the states’ growing Medicaid caseloads of the poor. [...]

Besides the health care financing, it would propose billions of dollars for energy-saving programs, public works projects, school construction and renovation, and expanded jobless aid and food stamps for “the most vulnerable,” as well as tax cuts.

Financing Medicare and expanding unemployment insurance and food stamp benefits is a pretty straightforward endeavor. But officials will have to decide exactly what public works projects are worth pursuing if, and when, a stimulus is passed. One sound choice would be an expansion of HUD’s recently-created Neighborhood Stabilization Program.

Authorized earlier this year, the program offers emergency assistance to state and local governments to acquire and redevelop foreclosed vacant properties. While the program was initially funded for $3.92 billion, demand is still very high. A jolt of $5 billion could go a long way, argues the Center for American Progress (CAP):

Banks put up for auction or took possession of more than 165,000 homes during November of this year alone, many of which will continue to sit vacant and attract blight. An additional $5 billion toward neighborhood stabilization would allow the federal government to provide grants to states and cities for local nonprofits to purchase these properties in bulk, then rehabilitate them and offer them for sale or rent at affordable prices. The rehabilitation process will return these properties to productive use, as well as create construction jobs in an otherwise moribund sector of the economy.

How many construction jobs would be generated in Illinois with a $5 billion increase to the fund? CAP pins the number at 4,429, leading to 4,587 restored properties and $15.8 million in additional tax revenue from the rehabbed homes. Read the rest of their estimates here.