CQ TODAY PRINT EDITION
Feb. 12, 2009 – 10:07 p.m.
Finish in Sight for Stimulus Effort
By David Clarke, Joseph J. Schatz and Paul M. Krawzak, CQ Staff
Congress is set to clear as early as Friday an enormous spending and tax cut measure aimed at stemming a deep recession that promises to dominate the agenda in Washington for the foreseeable future.
Democrats hit potholes along the way while rapidly negotiating the $789 billion measure (
Lawmakers who back the plan have high expectations for its historic size and scope.
“The legislation that will come to the floor tomorrow, the recovery package, is transformational in what it will do,” said House Speaker Nancy Pelosi , D-Calif. “Transformational in that it will create millions of jobs, and do so in a way that will bring stability to the economy.”
But the glow Democrats enjoy from getting the bill enacted may not last long. The size of the bill alone will have voters expecting it to deliver results perhaps more quickly than is realistic with an economy that still appears far from a turnaround.
Some Democrats have been careful to stress that the measure is not a cure-all — and that given the size of the economic problems it might not be big enough.
“We hope the package will have the effect most economists believe it will have,” said House Majority Leader Steny H. Hoyer , D-Md. But he added, “Several economists have said that this may not be enough. And they might be right, but this is what we could get.”
Appearing at a Caterpillar machinery plant in Illinois Thursday, Obama said, “Our recovery will likely be measured in terms of years and not months.” Republican opponents of the plan have been more blunt, predicting it will fail.
The House is scheduled to vote on the conference agreement sometime Friday, and Senate leaders are hoping to clear the package later that evening.
The timing in the Senate has been complicated by death, serious illness, religious considerations and a partisan split in the chamber that leaves no votes to spare for backers of the stimulus package, who need 60 votes to pass it.
Sherrod Brown , D-Ohio, will be in his home state Friday for viewing hours for his mother, and then again Saturday for her funeral. Majority Leader Harry Reid , D-Nev., said the roll call would be held open for Brown on Friday night so he can return briefly to cast his “yes” vote after the viewing.
Edward M. Kennedy , D-Mass., is currently in Florida being treated for a malignant brain tumor, although he voted earlier this week when the Senate took up its version of the stimulus. Reid indicated Kennedy would not be present Friday.
“It would be to his health advantage not to have to come back tomorrow,” he said.
Joseph I. Lieberman , I-Conn., is a devout Jew who may not be available to vote between sundown Friday and sundown Saturday because of the Sabbath.
Republicans in both chambers have railed against the measure for weeks, arguing it is a bloated spending program made up of Democratic priorities that inflate a deficit already heading north of $1 trillion while doing little to turn around the economy. The final measure includes language that would increase the statutory ceiling on the national debt by $789 billion, to $12.104 trillion.
Republicans have pushed for a package focused on tax cuts, but — save for three Senate GOP moderates who have endorsed the deal — took themselves out of the negotiating process by opposing the measure at each step.
“This bill was meant to be a stimulus that was timely, targeted and temporary,” said Senate Minority Leader Mitch McConnell , R-Ky. “Unfortunately, it appears to be none of the above.”
60-Vote Threshold
The final bill shows the limitation Democrats face in advancing their agenda because they lack the 60 votes to shut off filibusters in the Senate. Democrats hold a 58-41 majority, with one seat vacant.
In the end, a final deal was possible only after three moderate Republican senators — Olympia J. Snowe and Susan Collins of Maine and Arlen Specter of Pennsylvania — agreed to support the bill after its size was scaled back to under $800 billion.
The final figure “was not a scientific number, but a political one,” Hoyer said Thursday at a National Press Club forum. “Three Republicans set that as the limit of what they would vote for.”
Negotiations over the tax section of the package held up completion of the conference report for a while Thursday, with concerns focusing on details of a provision allowing companies to recover some of the losses suffered in the current downturn by claiming refunds for taxes they paid on profits in previous years.
Dramatic Intervention
The wide-ranging stimulus measure — called by many the most dramatic fiscal intervention by the federal government since World War II — includes hundreds of billions of dollars in both tax breaks and spending, ranging from $87 billion in Medicaid funding assistance for states to tax incentives for small businesses.
Conference negotiators restored some of the funding the Senate cut from its bill. The Senate-passed measure included $289.8 billion in discretionary funding, which is under jurisdiction of the Appropriations committees, while the House-passed measure included $361 billion.
The conference agreement would provide $311 billion in discretionary funding, including:
• $120 billion for infrastructure and science, of which $27.5 billion is for highways, $9.3 billion for rail transportation, $8.4 billion for public transportation, $7.2 billion to improve broadband access, $6 billion for environmental cleanup at former weapons production sites and $6 billion for local clean-water infrastructure.
• $14.2 billion for health investments, including $10 billion for National Institutes of Health biomedical research and facilities improvements. The NIH funding was a priority for Specter.
• $105.9 billion for education and training, including $53.6 billion for a state fiscal stabilization fund, $13 billion for Title I programs helping disadvantaged students and $12.2 billion for special-education programs.
• $37.5 billion for energy programs.
• $24.7 billion to subsidize COBRA health insurance premiums — at a level of 65 percent, for nine months — for workers who have lost their jobs.
• $4 billion for local law enforcement programs.
The final bill would continue through December an extended unemployment benefits program, which was scheduled to phase out at the end of March. The program provides up to 33 weeks of extended benefits to workers who exhaust their regular 26 weeks of benefits. It will help an estimated 3.5 million unemployed.
The plan also would increase unemployment benefits for 20 million people by $25 per week, and would allocate an additional $19.9 billion for food stamps, only slightly less than the $20.7 billion in the House bill. The Senate substitute had $8.2 billion for food stamps.
The deal provides a one-time payment of $250 to recipients of Social Security and Supplemental Security Income, and to veterans receiving disability compensation and pension benefits.
The final version bolsters support for several housing programs, providing $2 billion for a Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties. That’s up from nothing in the Senate bill but only about half the $4.2 billion in the House bill.
The plan would extend Trade Adjustment Assistance benefits for at least 160,000 new workers over the next two years, a provision that was in the Senate but not the House bill.
The conference report also includes language that would prohibit the payment of bonuses and retention incentives to the top executives at companies receiving federal bailout funding, though it does not limit their salaries, as proposed by some senators.
To reduce the cost of the measure — the House version totaled $819 billion and the Senate version cost $838 billion — and make it more palatable to Senate moderates, negotiators scaled back several popular tax break proposals.
Obama’s signature “Making Work Pay” tax credit to offset payroll taxes was trimmed from $500 per person and $1,000 per married couple to $400 and $800, respectively.
Negotiators slightly increased, to $8,000, an existing $7,500 tax credit for first-time homebuyers, extended it through Dec. 31 and dropped a repayment requirement. They also agreed to allow a new tax deduction for state and local sales taxes on new car purchases. But both provisions are less generous than the Senate’s bill, which would have offered a $15,000 tax credit to all homebuyers and allowed deduction of interest payments on car loans, in additional to sales taxes.
Much of the $53.6 billion state stabilization fund in the final agreement is expected to go to education programs. The House bill would have provided $79 billion for the fund, while the Senate bill included $39 billion. The House measure, however, also included a separate pot of $14 billion for school construction programs. The Senate GOP moderates balked at this sum, arguing the federal government should not be funding school construction.
As part of the compromise, within the state stabilization fund there is a pot of $39.5 billion for education programs; some of that could be dedicated to school modernization and repair projects. At least $8.8 billion marked for various state needs can go toward “modernization, renovation and repairs of public school facilities,” according to a release from the House and Senate Appropriations committees.
Many Democrats were unhappy with the compromise on school projects.
Asked about differences between the House and Senate over the issue, Pelosi said school construction “was one of our top priorities on the House side in terms of investments that will be made. It creates jobs immediately and improves education of our children.”
Bennett Roth, Bart Jansen, Catharine Richert and Edward Epstein contributed to this story.




POST A COMMENT
Oops! The following errors must be addressed: