CQ TODAY PRINT EDITION
Jan. 15, 2009 – 9:23 p.m.
Stimulus Draft Sparks Rush on Hill
By David Clarke, CQ Staff
In unveiling an $825 billion spending and tax-cut package, House Democrats fired the starting gun Thursday on a monthlong legislative sprint to blunt the effect of the economic downturn that will dominate the early part of the new Obama administration.
The draft stimulus proposal — which includes spending on infrastructure, health care and education and wide-ranging tax cuts — drew immediate criticism from Republicans. Some Democrats also grumbled, but Democratic leaders remain hopeful they can get the package through Congress by the middle of February. The Senate will soon move its own bill (
Still, House Appropriations Chairman David R. Obey , D-Wis., who assembled the $550 billion spending part of the bill, said that the package may not be enough.
“I think you have to look at this bill not as a salvation for the economy by any means,” he said. It is “simply the largest effort by any legislative body on the planet to try to take government action to prevent economic catastrophe, and even that may be insufficient standing alone and we may need to do even more at a later date.”
The $275 billion tax portion of the package includes President-elect Barack Obama ’s “Making Work Pay” tax credits and an expensive net operating loss carry-back provision for businesses. It does not include any “patch” for the alternative minimum tax, although that is among items that may be added later. (Story, p. 8)
Obama hopes the final legislation will create as many as 3 million to 4 million jobs.
To allay concerns about the cost, Democratic leaders have emphasized that the spending and tax provisions are meant to be temporary.
But Congress has a history of making temporary spending permanent, and the bill contains some provisions that will be difficult not to continue, such as funding for health research, physical infrastructure projects, and state and local law enforcement programs that Democrats have long argued are underfunded.
Balancing Act
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The creation of the package has presented significant policy and political challenges to the incoming president and the newly enlarged Democratic majority, as was evident Thursday. While Obama wants bipartisan support for the bill, House Republican reaction was anything but supportive.
“Oh. My. God,” said House Minority Leader John A. Boehner , R-Ohio.
He added, “I just can’t tell you how shocked I am at what we’re seeing.”
Republicans complained the package contains too much spending and questioned whether some of it would do anything to turn around the economy, pointing out such items as $50 million for the National Endowment for the Arts.
But given voters’ concerns over the faltering economy, many GOP members will be hard-pressed to vote against the bill.
The package was generally well-received by Democrats as they combed through it, but some questioned whether too much was being dedicated to tax cuts at the expense of spending initiatives.
“I didn’t expect that to cut into the stimulus,” Rep. Lynn Woolsey , D-Calif., said of the tax section of the bill.
While saying they recognize the need for a stimulus package, moderate and conservative Democrats who make up the 51-member House Blue Dog Coalition have warned that some in their ranks may not vote for a bill that will exacerbate a fiscal 2009 deficit projected to hit $1.2 trillion — unless they get assurances from Obama that he will take steps to address the government’s rising debt and long-term fiscal challenges.
Blue Dog leaders huddled with Peter R. Orszag, Obama’s choice for White House budget director, in an office just steps from the House floor to discuss the issue Thursday. Obama told Washington Post reporters and editors earlier in the day that he will hold a “fiscal responsibility summit” in February with members of Congress to hear and discuss ideas.
Charlie Melancon , D-La., a Blue Dog leader, said the group wants Obama to make some sort of commitment about the budget before the summit. It plans to send the new administration some ideas and hopes to have Obama commit to something by the end of the month.
On the policy side, Democrats have been challenged to identify what spending will lead to jobs quickly, while trying to keep to their pledge that the spending is intended to be used over two years and not become a permanent part of the budget.
Obey said he believes most of the funding in the bill can be spent in that time frame.
“People understand that this is meant to be temporary money that gets you over the hump, and so you hope the recession is over and you don’t need to renew this down the line,” he said.
But the chairman also said the package is intended to begin helping lower- and middle-class Americans whom he argued have not made many economic gains over the past 25 to 30 years.
“If all we do is look at this program as a two-year fix to a short-term problem, then we would have missed the point,” he said.
Obey touted some of the oversight and transparency provisions in the bill, including a Recovery Act Accountability and Transparency Board to oversee spending.
Lifeline to States
The spending side of the bill focuses heavily on preventing states from cutting programs or raising taxes to deal with the budget shortfalls many are experiencing. Obey estimated that states, local governments and the nonprofits that assist them would receive $318 billion under the bill.
Most of that funding would be directed toward health and education programs. For instance, the bill includes $87 billion for Medicaid programs. Several education initiatives are in the bill, including $41 billion for local school districts that would flow through a few different programs.
The bill also focuses heavily on programs aimed at helping the poor and unemployed. The food stamp program would receive $20 billion, while $36 billion is included for extending and expanding unemployment benefits.
The bill includes hefty funding for infrastructure projects, such as $30 billion for highway construction, $10 billion for mass transit and rail, and $19 billion for wastewater, flood control, and environmental restoration projects.
Democrats emphasized that the bill focuses on projects that they believe will provide the basis for a more efficient and productive economy in the future, such as $20 billion for health care information technology projects such as electronic medical records.
There also is a heavy emphasis on renewable energy and efficiency programs, such as modernizing the electrical grid, as well as scientific research, including $2 billion for biomedical programs at the National Institutes of Health.
Tight Time Frame
Obey provided an outline for finishing both the stimulus package and the remaining spending bills for fiscal 2009 by Feb. 13.
He said he plans to mark up the spending part of the stimulus package on Jan. 21. The bill would come to the floor the following week.
Obey said the House would consider the fiscal 2009 omnibus spending bill, which contains the nine remaining spending bills, the week of Feb. 2, while the full Senate considers its version of the economic recovery package.
Senate Appropriations Chairman Daniel K. Inouye , D-Hawaii, said his panel will hold a markup of the stimulus bill on Jan. 22 and that he hopes to have a draft ready by Friday for review.
Democratic leaders have said if the stimulus bill is not completed by Feb. 13, Congress will stay in town rather than leaving for a planned one-week recess.
Paul M. Krawzak and Richard Rubin contributed to this story.




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