CQ TODAY PRINT EDITION
Feb. 2, 2009 – 9:35 p.m.
Senate to Vote on Amendments to Stimulus
By Richard Rubin and Joseph J. Schatz, CQ Staff
The Senate launched a wide-ranging debate on an $884.5 billion stimulus package Monday with members of both parties vowing to make changes they say would pump money into the economy faster.
The chamber is expected to begin voting on amendments Tuesday. Majority Leader Harry Reid , D-Nev., is pushing for passage of the bill (
The first amendment scheduled for debate is a proposal from Patty Murray , D‑Wash., and Dianne Feinstein , D-Calif., that would boost the bill’s highway funding from $27 billion to $40 billion and its transit funding from $8.4 billion to $13.4 billion.
Meanwhile, Republicans are not trying to prevent the bill from passing, but rather they are “trying to reform it, reformulate it, put it in a different place,” said Minority Leader Mitch McConnell , R-Ky.
Senate Democrats moved to strike some spending that Republicans had complained about, including $400 million to prevent sexually transmitted diseases and $75 million for smoking cessation programs.
On Jan. 28, the House passed its version of the bill without a single Republican vote, but Senate Democrats will need at least one GOP vote — and possibly more — to get the legislation through their chamber.
McConnell outlined several proposals that Republicans would like to see adopted, including a reduction in income tax rates for the bottom two brackets and provisions aimed at slashing mortgage rates to the 4 percent range. But McConnell warned against simply adding new tax cuts or additional spending in a bid to lure GOP votes. Making the package bigger would make it less bipartisan, not more, he said.
The Senate version of the bill written by the Finance and Appropriations committees is already larger than its $819.5 billion House counterpart, mainly because it includes a “patch” to prevent an expansion of the alternative minimum tax in 2009.
Amendments and Alternatives
John Ensign , R-Nev., is leading an effort, backed by many business groups, to temporarily reduce the tax rate that corporations pay when they repatriate earnings from overseas. The language in his bill is expected to be similar to a 2004 temporary repatriation holiday that won the votes of 20 Democrats who are still in the Senate.
Democratic opponents, led by Carl Levin of Michigan and Byron L. Dorgan of North Dakota, say the provision would encourage companies to move abroad.
“Proponents claim that repatriation tax holidays encourage businesses to bring foreign earnings back into the United States,” Levin said in a statement. “But it may do the exact opposite by encouraging companies to move operations offshore or shift profits to tax havens in anticipation of a future tax holiday and by alleviating any worry that the funds might get stuck offshore.”
A number of lawmakers have signaled they would like to see the stimulus plan do more for the nation’s housing market.
Budget Chairman Kent Conrad , D-N.D., said he is talking with senators about an amendment that would shift about $50 billion in the bill, mostly toward programs to address the struggling housing market.
Conrad said some of that funding would likely go to the Federal Deposit Insurance Corporation to renegotiate mortgages, as well as to expanding a refundable tax credit for homebuyers. Some Republicans want to expand that credit to as much as $15,000, but Conrad said that may be too expensive.
The amendment would be paid for by eliminating other funding in the bill, Conrad said, without offering specifics. He said about nine Democratic and Republican senators met Monday to discuss the idea.
Some lawmakers want more radical surgery. Mel Martinez , R-Fla., is floating a $713 billion alternative package that focuses on tax cuts but, unlike the House Republican substitute offered last week, does include some spending. “There’s a nucleus of Republicans who realize the need for economic stimulus,” Martinez said.
His plan would temporarily cut the employees’ share of the payroll tax from 6.2 percent to 3.1 percent and cut the corporate tax rate from 35 percent to 25 percent. It would also increase a tax credit for home purchases to $15,000 for all homebuyers and reduce the top tax rate to 25 percent for small-business owners who file under the individual section of the tax code.
On the spending side, the plan would allocate $20 billion to defense and veterans’ programs, $71 billion for transportation, and $4.6 billion to accelerate projects run by the Army Corps of Engineers.
The general idea of expanding the tax credit for homebuyers appears to have fairly broad support. Johnny Isakson , R‑Ga., is pushing a similar provision in an amendment that would provide a credit of $15,000 or 10 percent of the purchase price of the home, whichever is lower. However, Isakson’s proposal would apply only to first-time homebuyers.
The credit would begin phasing out at an adjusted gross income of $150,000 for couples and $75,000 for individuals.
Such a provision could mean that many middle-income wage earners who buy homes in 2009 “won’t have to pay a penny” in income taxes, said Thomas Ochsenschlager, vice president for taxation at the American Institute of Certified Public Accountants.
Looking for Cuts
Susan Collins , R-Maine, said she was working with Ben Nelson , D-Neb., on amendments that would yield a bill of about $650 billion by deleting provisions that would not create jobs.
“We’re still in the midst of that process,” she said after several weekend discussions with Nelson. “My goal is to come up with a more targeted package. We’re not there yet. We’re still working.”
And Nelson, citing $1.5 billion for NASA as an example, said too much of the bill was not stimulative. “I can’t support the bill that’s there,” he said.
Christopher S. Bond , R-Mo., plans to offer an amendment that would transfer $5.5 billion in the bill for surface transportation competitive grants to the highway and bridge formula. The grants are meant for larger projects of national or regional significance that can be started within three years. Bond said that is not stimulative.
Senate Democratic leaders released talking points Monday defending their plan. Their efforts may be boosted by a Congressional Budget Office (CBO) projection showing that 78.5 percent of the Senate bill could be spent by the end of fiscal 2010, compared to 64.1 percent for the version passed by the House last week.
How fast the spending and tax provisions would affect the economy has been a central part of the debate, with Republicans arguing that much of the spending Democrats prefer would not act quickly enough.
The Obama administration has set a goal of having 75 percent of the bill spent by Sept. 30, 2010.
The biggest differences between the House and Senate measures when it comes to how quickly the funding can be spent appears to be the alternative minimum tax “patch” in the Senate bill, which would keep the tax from hitting millions of additional taxpayers, as well as a difference over how a pot of funding for education programs would be distributed.
As it did in its evaluation of the House bill, CBO warned that it will be difficult to get the $362.5 billion in discretionary funding in the Senate bill out the door quickly. Some of the funding would go toward new programs and require the development of spending procedures and other criteria that could take time to implement. In addition, some existing programs would receive far more than they have in the past, potentially creating spending backlogs.
The discretionary funding in the Senate bill would be spent faster than in the House bill — at a rate of 49 percent, as opposed to 40 percent, by the end of fiscal 2010.
David Clarke and Colby Itkowitz contributed to this story.
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If Harry "do-nothing" Reid is involved I have zero confidence this bill will get better. He is a political hack who needs to be throw out like Daschle was when he was majority leader and turned his back on America.
400 million for STD education? Are kidding me? Just tell people not to have lots of sex partners and wear a condom when they do.This just another attempt by the wicked witch of the West, Nancy P and her flying monkies Harry Reed and Ted Kennedy to spend as much as they can before the dumb Democracts smarten up and run their asses out of town on a rail.
400 million for STD education? Are kidding me? Just tell people not to have lots of sex partners and wear a condom when they do.This just another attempt by the wicked witch of the West, Nancy P and her flying monkies Harry Read and Ted Kennedy to spend as much as they can before the dumb Democracts smarten up and run their asses out of town on a rail.
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