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House Offers $825 Billion Stimulus

By Shailagh Murray and Paul Kane
Washington Post Staff Writers
Friday, January 16, 2009

House Democrats yesterday presented an $825 billion stimulus package that includes more government spending and less tax relief than President-elect Barack Obama had proposed, potentially weakening support among Republicans for a plan that congressional leaders hope to pass by mid-February.

The aim of the legislation is to bolster the nation's sagging economy by providing incentives for companies to create jobs and money for individuals and state governments struggling to cope with the downturn.

The bulk of the package -- about $550 billion -- would be used to build new schools and highways, invest in energy and health-care projects and provide unemployment and health benefits for out-of-work Americans. The rest would provide tax relief for businesses and individuals. If approved, most workers would get about a $500 tax cut in their paychecks.

The House measure is far larger than lawmakers envisioned when the stimulus idea surfaced last fall and, as the recession shows signs of worsening, Democrats predict the price tag could grow to nearly $1 trillion before the bill reaches Obama's desk.

"This plan is a significant down payment on our most urgent challenges," Obama said of the House effort. He will press for action on the stimulus during an appearance today at a wind-turbine manufacturer in Bedford Heights, Ohio.

But the bill was not warmly received by Republicans, who had been encouraged by Obama's commitment to designating a larger portion of the stimulus to tax cuts. A plan outlined by the president-elect last week would have provided $300 billion in tax cuts as part of a $775 package, with tax cuts representing about 40 percent of the overall total.

GOP lawmakers also balked at the thousands of individual projects designated for funding in the House plan. "Oh, my God," House Minority Leader John A. Boehner (R-Ohio) said to reporters. "My notes here say that I'm disappointed. I just can't tell you how shocked I am at what I'm seeing."

House Speaker Nancy Pelosi (D-Calif.) described the legislation as a "first step along the way" in what is expected to be an intense, four-week negotiating period with the Senate. Pelosi and Senate Majority Leader Harry M. Reid (D-Nev.) have pledged to deliver the legislation to Obama before Congress departs for a President's Day recess. Until then, Pelosi predicted "practically no sleep on anyone's part."

Rep. David R. Obey (D-Wis.), chairman of the Appropriations Committee, called the bill "the largest effort by any legislative body on the planet" -- and he warned it could be followed by another emergency funding measure if the economy worsens. Obey told reporters at a briefing, "This product may undershoot the mark."

His panel expects to approve the plan on Thursday, the same day the Ways and Means Committee takes up the tax portion of the package. The tentative schedule calls for the full House to vote Jan. 28 on the entire $825 billion package, with the Senate considering the bill during the first week of February.

Acknowledging concerns about potential government waste, Congress is creating a Web site -- http://www.recovery.gov -- to allow the public to track stimulus spending and file complaints. Obey said about 60 percent of the spending portion would assist states, local governments and local nonprofit organizations in providing social services, and that most of the money would be spent based on funding formulas.

"No earmarks," the chairman asserted.

Some provisions drew fire as unlikely to lead to job creation. The bill proposed a $650 million account for providing coupons to television viewers to enable them to make the conversion to digital television. The bill also includes $200 million to refurbish the National Mall, particularly the Tidal Basin walls around the Jefferson Memorial, and another $150 million for a backlog of repairs at the Smithsonian Institution.

The plan calls for an overwhelming majority of the spending to take place within the next two years, although Obey said a "much smaller amount" would be spent in 2011. Contracts for highway construction -- totaling $30 million -- must be signed in 120 days, part of Obama's pledge to find "shovel-ready" projects.

The largest chunk of spending goes toward education, including $41 billion for special education, school construction and other elementary and high school programs. Pell grants for higher education will increase by $500, to more than $5,000 a year.

Senate Democrats have predicted their stimulus wish list could rise to $850 billion, including many provisions not included in the House bill. If a $70 billion fix to the alternative minimum tax is included in the final legislation, as expected, the final version could top $900 billion.

House tax writers dropped a $3,000 tax credit for every new worker hired by U.S. companies, an idea Obama had proposed but that lawmakers dismissed as ineffective and ripe for abuse. They did include an Obama proposal to provide a $500 payroll tax credit for individuals earning below $75,000 per year. Couples making below $150,000 per year would receive a $1,000 credit.

The package includes significant sums to promote renewable energy and energy efficiency and to create uniformity in health-care record keeping, two sectors widely viewed as ripe for job growth. The energy money comes in the form of tax credits, along with $32 billion of direct spending and loan guarantees for new electricity transmission and grid improvements that can help link wind, solar and other renewable energy sources to consumers.

The package also includes $16 billion to repair public housing and retrofit them for energy efficiency and another $6 billion to weatherize modest income homes. Advocates of these programs say they can lead to jobs for people with only moderate skills.

Unemployment checks would increase by $25 per week, and federal welfare funding to needy families also would increase temporarily. Low-income elderly and disabled Social Security recipients would receive a one-time additional monthly payment. Workers who have lost their jobs would be eligible for temporary health-care subsidies and extended COBRA coverage from their former employers.

Staff writer Steven Mufson contributed to this report.

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