CQ TODAY ONLINE NEWS
– ECONOMIC AFFAIRS
Corrected Feb. 11, 2009 – 5:57 p.m.
Talk Turns to Working Out Stimulus Differences
By Joseph J. Schatz, Paul M. Krawzak, Richard Rubin and David Clarke, CQ Staff
With the Senate set for a key procedural vote Monday on its version of an economic stimulus package, talk was already turning to the hard bargaining ahead with the House before a final bill can be delivered to President Obama.
Speaking on news talk shows Sunday, a top administration official indicated there were concerns about some of the cuts the Senate made to the package (
“...[W]e believe school modernization is an absolutely essential investment in the competitiveness and the future of our country,” Lawrence H. Summers, director of the White House National Economic Council, said on Fox News Sunday in response to questions about cuts the Senate made in school construction funding. “It’s an investment that can take place quickly. It’s an investment that’s labor-intensive in restoring schools and installing laboratory space that our kids need to compete.”
As for state aid, which would also be scaled back in the Senate plan, Summers said “there are huge problems facing state and local governments, and that could lead to a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs. And we’ve got to prevent that. So we’re going to have to try to come together in the conference.”
But, speaking on ABC’s “This Week,” Summers also said that Obama believes “If there are programs that aren’t going to serve important purposes they should be eliminated” and he played down the differences between the House and Senate plans.
“There are certainly good ideas in both versions, and we’ll have to draw from those ideas in creating an ultimate vehicle, but the most important thing is that people come together and create the 3 million to 4 million jobs. You know, there’s 90 percent overlap now” between the bills, Summers said.
And Rep. Chris Van Hollen of Maryland, who heads the Democratic Congressional Committee, said on Fox, “while there are differences that will be worked out, this is not the time to draw any lines in the sand. I don’t think anyone’s going to say, ‘If I don’t get my way with this provision in the House bill, I’m not going to accept the package.’”
Senate Breakthrough
With the backing of three Republican moderates — Susan Collins and Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania — Senate Democratic leaders have the 60 votes needed to overcome opposition from conservatives who remain opposed to the package.
The exact cost of the compromise remained somewhat in flux as the Senate engaged in three hours of debate Saturday and Democratic leaders put the finishing touches on legislative language. While the revised plan released Friday night carried an estimated cost of about $780 billion, amendments adopted during Senate floor debate are likely to push the total cost past $800 billion. Those additions include a provision sponsored by Johnny Isakson , R-Ga., that would create a $15,000 tax credit for homebuyers.
Majority Leader Harry Reid , D-Nev., filed a motion to limit debate on the package before the Senate adjourned for the day on Saturday, setting the stage for Monday’s pivotal vote.
Democratic leaders want to quickly conclude a House-Senate conference this week and clear the bill before the Presidents Day recess begins next weekend. But meeting that goal will require a heavy lift both procedurally and to sort out substantive differences between the House and Senate packages.
The Senate will vote at 5:30 p.m. Monday on a motion to limit debate, or invoke cloture, on an amendment containing the compromise version of the stimulus. Assuming the motion is adopted, the Senate will consider the amendment itself at noon the following day. Republicans are expected to raise a budgetary point of order against the amendment, but Democrats will have the 60 votes needed to override the objection. Then, the Senate will move to a final vote on the amendment.
At the behest of moderates, the Friday night compromise shaved about $108 billion from the original Senate proposal. Appropriators cut $83 billion in discretionary spending from the Senate plan, including funding for school construction and other programs favored by Democrats in the House and Senate. The Finance Committee pared back health care spending provisions by $7 billion, and scaled back the tax cut package by $18 billion.
Democrats appeared to be united behind the latest plan assembled by a group of moderates, despite some grumbling about the changes needed to attract a handful of GOP votes.
“It’s not a perfect bill from my perspective, and I don’t agree with everything that’s in it and everything that came out, but literally we can’t afford to wait any longer to get something passed,” Amy Klobuchar , D-Minn., said on the Senate floor Saturday.
Tough Bargaining Ahead
The tradeoffs needed to get enough votes for the plan in the Senate presaged tough bargaining with the House before a final bill is delivered to Obama, who, according to one lawmaker, signed off on the Senate deal. Top House Democrats were already complaining about the Senate moves before the agreement was formally announced.
The single biggest spending cut to the original Senate plan comes out of a $79 billion state fiscal stabilization allocation that would help states avoid tax increases and cutbacks in education and other high priority services. The compromise trims that funding to $39 billion and sets up a conflict with the House-passed bill that allocates $79 billion.
Another major difference between the House and Senate bills involves school construction. The House allocated $14 billion to renovate, repair and build public schools. The Senate zeroed out the $16 billion its original bill set aside for that purpose.
The compromise also eliminates $3.5 billion for higher education facility modernization and purchase of instructional equipment. The House voted to provide $6 billion for higher education.
The compromise would cut additional funding for Head Start and Early Head Start, programs to prepare children to succeed in school, from $2.1 billion to 1.05 billion. That’s half of the $2.1 billion in the House bill.
The Senate substitute eliminates $5.8 billion in the original measure that would have been spent on grants and contracts to prevent illness through health screenings, education, immunization, nutrition counseling, media campaigns and other activities. The House has set aside $3 billion for prevention and wellness.
Funds to expand the use of electronic record keeping in health care are cut from $5 billion to $3 billion in the substitute, still more than the $2 billion in the House plan. Under the new Senate plan, a national coordinator would distribute the money to pay for technology, planning and training.
The compromise eliminates funding for pandemic flu preparedness, a prominent target of critics who said figuring out how to increase the supply of vaccine would not create jobs. The House bill includes $420 million for flu, and the original Senate proposal had $870 million.
The Senate substitute zeroes out $2.25 billion in funding for a neighborhood stabilization program, which would have provided funds to states, local units of government and organizations to purchase and rehabilitate abandoned and foreclosed upon homes. The House allocated $4.19 billion for the program.
In the compromise, funding to increase broadband access in rural areas and other underserved parts of the country is reduced by $2 billion, from $9 billion to $7 billion. That’s still more than twice as much as the $3.175 billion in the House bill.
The Senate proposal also trims additions to the Byrne justice assistance grant program, which provides formula funding to state and local police. The compromise would cut $450 million from the Byrne grants, reducing funding from $1.5 billion to $1.05 billion, according to information provided by Ben Nelson , D-Neb., an author of the compromise. The House allocated $3 billion for Byrne grants.
Other differences that will have to be resolved in conference include the additional funding for a federal program that provides home weatherization services to increase energy efficiency for low-income families. The Senate allocates $2.9 billion for the program, while the House bill has $6.2 billion.
The Senate bill includes $2 billion for FutureGen, a near-zero emissions, coal-fired plant that backers want to build in Mattoon, Ill. The project has been a priority for Senate Majority Whip Richard J. Durbin , D-Ill., and for Obama when he was an Illinois senator. The House bill does not include the project.
Unlike the House bill, the Senate version does not include additional funds for the Low Income Home Energy Assistance Program, which helps low-income families pay utility bills. The House bill has another $1 billion for the program.
Kathleen Hunter, Lydia Gensheimer, Bart Jansen, Catharine Richert and Edward Epstein contributed to this story.
First posted Feb. 8, 2009 12:01 p.m.
Comments
The whole stimulus effort is a disaster for America. There are very few economists (unless in the pay of government) who think it will work. And, the costs are unbelievable. It will cause inflation, a nose dive in the value of the dollar, and our children and grandchildren will have to pay for this. Saul Alinsky, Obama's inspiration in this, said it will take a crisis to change the system of government. Here it is. I never in my wildest dreams thought we would become a communist country -- but I was wrong. That was Alinsky's motivation, and regretably, it seems to be Obama's as well.
Well done Arthur LEMAY
According to the CBO, the stimulus bill will actually hurt the economy in the long run. However, there is the possibility it will stimulate illegal immigration. In addition to providing up to 300 thousand construction jobs for illegal aliens, the bill will bail out irresponsible states like California. This will allow them to avoid dealing with one of the primary reasons they have a budget deficit. That reason is the extensive and expensive social net they have extended to illegal immigrants. Obama's stimulus will stimulate illegal immigration
Republicans FAILED America miserably. Now tell us again just 'how it is' ditto heads. lol - pathetic and shameless.
Without the extraordinary measure of sandbagging for the financial system, which is wanting the second rescue step promptly, the economic Catrina might have happened. Now is the time to launch new robust embankment that necessitates a great deal of financing, therefore the size of this stimulus package may not be a product by hype in contrast to oil advocate's assertion. If the U.S. keep resting on the already failed oil-based policy guided by special interests, it can be defined as a reckless gambling as we can see the reeling motor producers representing gasoline-based industry. Americans have opted for change,energy liberty, if folks with fuel urge are affected by the oil companies and the party guided by them again, if divided, the effect will be the last thing people want to expect, I think. Thanks.
President Barack Obama recently asked Congress "to act without delay" to pass legislation to double alternative energy production in the next three years and build a new electricity "smart grid." This smart grid would be an updated digital version of the electric wires strung across our country in the past century. What makes it "smart" is that the lines would be buried and more efficient and would give homeowners feedback on how efficiently they were using the power inside their homes. This new smart grid would cost about $400 billion over 10 years but would save between $46 billion and $117 billion over the next 20 years by reducing inefficiencies and power failures, according to the U.S. Department of Energy. It also would help to make us less dependent on imported energy and to reduce climate change. For example, if the smart grid were even 5 percent more efficient, it would keep as many carbon emissions from the atmosphere as eliminating 53 million cars. A smart grid allows power from residential solar panels, small wind turbines, and plug-in electric vehicles to be fed into the grid. This would encourage the green energy industry by allowing small players, such as individual homes and small businesses, to sell power to their neighbors or back to the grid. It would provide another source of income for larger commercial businesses that have renewable or backup power systems that can provide clean energy for a price during peak demand, such as midday in July when the air conditioning is cranked. Another brilliant feature of the proposed grid is the potential to use cars to store electricity and then feed it back into the grid during times of peak demand. "Vehicle to grid," or V2G, technology helps balance energy loads by "valley filling" (charging at night, when demand is low) and "peak shaving" (sending power back to the grid when demand is high). This would help utility companies keep voltage and regulation stabler. It would be especially useful when more of our power came from intermittent power sources, such as solar panels, which only produce power during the day. Power outages are less problematic for a smart grid because it quickly can isolate the problemand create energy pathways around it. This makes a smart grid "self-healing" by reducing power outages and saving money. Buried power lines also would reduce outages caused by harsh winter storms, when tree branches are likely to down power lines. In my community, residents are concerned about proposed power lines that would stretch through the centers of many small downtowns and across lovely vistas. If these same lines were buried, there would be fewer objections from the community. The smart grid could help consumers use that energy more wisely and save money, as well. A sensor in your home can tell you the price of electricity when the demand is highest. This allows you to set priorities so that you use more energy when the price is lower and less during peak demand. You also can find out which appliances are energy hogs and identify energy vampires that you may not have known about. Austin, Texas, has been working on a smart grid since 2003, when its utility company first replaced a third of its manual meters with wireless smart meters. Austin currently manages 200,000 smart meters, smart thermostats and sensors across its service area and expects to be supporting 500,000 devices this year. Boulder, Colo., started a smart grid project in August 2008. The smart grid extends into homes through home automation network devices. These devices automatically set thermostats, reduce energy loads during peak times, and shut off lights in rooms when no one is in them. By investing in our infrastructure, we also would stimulate economic growth and increase green jobs. Thousands of peoplewould be put to work across the country designing, building and installing smart grid technology. Having the grid in place wouldmake electric carsmore feasible and affordable. Renewable energy would become more viable, and demand would increase as more electric carswere added to the grid. It also would bring the price of homeand business-scaled renewable power systems down because the payback periods would decrease. Businesses may make tidy profits by selling excess power back to the grid. Want to learn more about the smart grid? The U.S. Department of Energy has an easy-tounderstand publication you can download online called "The Smart Grid: An Introduction." The DOE is conducting a series of smart grid e-forums to discuss issues surrounding the smart grid, including costs, benefits, implementation and deployment. Thank you !
Basically the mere way to compete with the cheap labor costs can be a advanced education/science, then the one who is capable of solving its problems is most likely to resolve any of them, I suppose. A person with common sense may notice by now why the republicans struggle to discard education budget.
If you were to spend one $million each and every day from the time of Christ (2000 years ago), until today, you would have to continue spending one $million every day for the next 700 years to spend One $Trillion. I cannot wrap my arms or my mind around those figures let alone having Congress spend tax payers money to that amount with the stroke of a pen. This "Stumulus is a "Pork Wrap!"
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