CQ TODAY PRINT EDITION
– TAXES
Jan. 9, 2009 – 5:44 p.m.
Democrats, Citing Overall Support, Seek to Temper Grousing Over Stimulus
By Richard Rubin, CQ Staff
Even as they grapple over the details of an economic stimulus bill, Democrats are emphasizing just how much they share President-elect Barack Obama ’s broad goals and accept his general outline for the legislation.
The chorus of agreement comes after days of growing — and, for Democrats, uncomfortably public — intraparty skirmishing about the mix of taxes and spending in the incoming administration’s proposal, and it signals that Democrats will try to close ranks and settle on a plan as they head toward committee markups the week of Jan. 19.
“It’s certainly true that we in Congress will have input,” Sen. Charles E. Schumer , D-N.Y., said in a Jan. 9 conference call. But, he added, “The urgency of this economic crisis . . . is going to limit any haggling over competing approaches.” Schumer predicted that Congress would complete its work by a self-imposed Feb. 13 deadline and would enact a package greater than the $775 billion suggested by the Obama administration but still less than $1 trillion.
“The centerpiece of the Obama tax relief package is the middle class tax relief, and we have broad agreement on that,” said Rep. Chris Van Hollen , D-Md., a member of the Ways and Means Committee and the House leadership.
The largest tax piece of the stimulus bill is expected to be a new refundable income tax credit that would effectively lower payroll taxes by $500 per worker. The money would be distributed through changes to paycheck withholding, meaning that there will not be another round of rebate checks, as there were last year (PL 110-185).
But the idea of handing money to consumers isn’t universally popular, particularly in the Senate. And significant disagreements remain as the administration tries to craft a proposal that can satisfy Republicans who want tax cuts and Democrats who want more spending on infrastructure and renewable energy.
Obama acknowledged that lawmakers and administration officials will continue to “hone and refine” the proposal, even as they press for quick action. “There are going to be a whole host of good ideas out there, and we welcome all of them,” he said Jan. 9. “And we’re going to sift through all of them, and we are going to work in a collaborative fashion with Congress.”
Talks Continue
Obama’s economic advisers, including former Treasury Secretary Lawrence H. Summers, met with Ways and Means Democrats on Jan. 9 to try to work through any disputes on the tax package. “He made a presentation, indicated some flexibility. We raised some questions, indicated some flexibility. And that’s kind of where it was,” said Richard E. Neal , D-Mass., a Ways and Means member. They will resume those discussions Tuesday afternoon.
In particular, an Obama proposal to offer a $3,000-per-job tax credit for businesses that hire new workers has come under attack from Democrats, who argue that it would be difficult to measure job creation and wonder if it would actually encourage businesses to change their behavior. Neal said the idea is “not getting traction.”
But Obama has promoted it, and the provision does have supporters in Congress. Reps. Henry Cuellar , D-Texas, and Pat Tiberi , R-Ohio, both said they thought the credit would be particularly attractive to small businesses.
Ways and Means Chairman Charles B. Rangel , D-N.Y., signaled that if the incoming administration insists on some of the less popular proposals, it would have to provide more justification for them.
“We did make it clear that where [Summers] thought that the part of the proposals made a lot of economic sense, he was going to have to help us in some kind of way to think of ways to interpret this for political reasons, because we are the salespeople for the president and this package,” Rangel said.
He also said that someone would have to explain how it could be fair that companies that received money from the Troubled Asset Relief Program (PL 110-343) could also be eligible for the business tax cuts in the stimulus bill.
Rangel added that he feels “a little uneasy” that lawmakers will have to make decisions so quickly on such a big bill that will need to satisfy senators, who usually insist on more deliberation. “We have broad latitude to negotiate,” he said. “Our problem is that time is not our friend, that this damn thing is moving so fast and they have so many different pieces to put together.”
Ideas Keep Coming
Meanwhile, more details continued to emerge about various pieces of the proposal. Ways and Means members are discussing whether to include a “patch” that would prevent the alternative minimum tax from hitting more families in 2009.
The bill is also expected to include money for communities to buy foreclosed homes, said Financial Services Chairman Barney Frank , D-Mass. Democrats made similar efforts last year, but dropped those proposals from broader housing legislation before enactment (PL 110-289).
The stimulus package seems likely to remain in flux throughout the next week as negotiations continue. Veteran lawmaker John M. Spratt Jr. , D-S.C., shrugged off the early struggles, calling them part of the normal process.
“You just don’t bring a bill of this kind cold to the caucus or to the Congress and to the floor,” said Spratt, chairman of the House Budget Committee. “There will be a lot of shopping of different provisions. They test-marketed an idea; they’ll go back downtown and say: ‘This works, this doesn’t.’ We did it all the time in 1997.”
Joseph J. Schatz, David Clarke and Phil Mattingly contributed to this article.




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