Obama, Pelosi to Discuss Scope of Economic Package

By Michael D. Shear
Washington Post Staff Writer
Thursday, January 1, 2009

President-elect Barack Obama will meet with House Speaker Nancy Pelosi (D-Calif.) on Monday as Congress prepares to reconvene and debate a massive recovery plan for the nation's struggling economy, according to Democratic sources.

The face-to-face meeting between two of the nation's top Democrats will be one of the president-elect's first acts after relocating his family to a hotel in Washington over the weekend.

Sources said Obama and Pelosi will discuss the scope and timing of the economic recovery package, which Obama has said will be his first priority upon being sworn into office. Pelosi has said her goal is to have the legislation on the new president's desk and ready to be signed on Jan. 20.

But that schedule appears increasingly likely to slip, as Republicans and conservative Democrats are raising concerns about the impact on the federal deficit of spending hundreds of billions on an array of projects with little vetting by Congress. Lawmakers now expect a spending package of between $675 billion and $775 billion.

And a top congressional aide said yesterday that Democratic leaders in the House are still waiting for a detailed proposal to be delivered by Obama's economic advisers before lawmakers can begin the process of turning it into legislation.

Even so, congressional Democrats are anxious to get the process started so that a vote can take place in the House as early as the week of Jan. 12. Pelosi announced yesterday that the first hearing on the plan will take place Wednesday.

In a letter to Democratic House members, she wrote that the hearing will focus on "the need to act with deliberate speed to safeguard as many as three million jobs by making needed investments in infrastructure, alternative energy, science and other emerging sectors and providing middle-class tax cuts to help make work pay."

Among those scheduled to testify at a series of hearings involving several committees are Mark Zandi of Moodys.com, Harvard University professor and former labor secretary Robert Reich, Harvard economist Martin Feldstein, MIT professor Maria T. Zuber and others.

Even if the House votes before Obama's inauguration, passage in the Senate is likely to be more contentious and take longer than in the other chamber. With an ongoing recount in Minnesota's Senate race and the process for replacing Obama in the chamber still uncertain, Democrats can be assured of holding only 57 seats during January, three votes shy of a veto-proof majority.

Obama aides said the president-elect and his team will help make an all-out push to convince Americans that the government must spend almost $1 trillion to create jobs, provide cash for spending and shore up the finances of the state governments.

Obama aides and congressional sources have said the package under development is likely to contain three broad categories: infrastructure investment, tax breaks and direct aid to states.

Congressional aides said all the specifics of the infrastructure spending are unlikely to be spelled out in the legislation. Instead, the goal will be to provide formulas that allow states to choose projects that fit a series of broad principles laid out by the president-elect and Congress.

The tax cuts being discussed are focused on reductions in payroll taxes, a top congressional aide said. Once adopted, workers would see more money in their paychecks every week, leading -- officials hope -- to increased consumer spending.

The aid to states is likely to come in the form of payments that could help meet the growing costs of Medicaid spending.

In a Washington Post-ABC News poll last month, 65 percent of those surveyed said they support new federal spending of as much as $700 billion on construction projects and other programs to try to stimulate the economy. In the same poll, 69 percent of those who supported the plan (47 percent of all adults) said they would still back the spending even if it increased the size of the federal deficit.

Polling analyst Jennifer Agiesta contributed to this report.

© 2009 The Washington Post Company