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Stimulus Plan Meets More GOP Resistance
Obama to Reiterate Appeal for Bipartisanship

By Paul Kane
Washington Post Staff Writer
Friday, January 23, 2009

Just days after taking office vowing to end the political era of "petty grievances," President Obama ran into mounting GOP opposition yesterday to an economic stimulus plan that he had hoped would receive broad bipartisan support.

Republicans accused Democrats of abandoning the new president's pledge, ignoring his call for bipartisan comity and shutting them out of the process by writing the $850 billion legislation. The first drafts of the plan would result in more spending on favored Democratic agenda items, such as federal funding of the arts, they said, but would do little to stimulate the ailing economy.

The GOP's shrunken numbers, particularly in the Senate, will make it difficult for Republicans to stop the stimulus bill, but the growing GOP doubts mean that Obama's first major initiative could be passed on a largely party-line vote -- little different from the past 16 years of partisan sniping in the Clinton and Bush eras.

"Yes, we wrote the bill. Yes, we won the election," House Speaker Nancy Pelosi (D-Calif.) told reporters yesterday, saying Republicans were not being realistic in their expectations.

Hoping to recapture the bipartisan spirit, Obama will host nine congressional leaders at the White House today for talks about the economic recovery package, which he has asked to be on his desk by Feb. 16, Presidents' Day. He also agreed to talk with House Minority Whip Eric Cantor (Va.) and other GOP lawmakers next week about their proposals for more tax cuts.

Republicans have a long list of grievances.

Sen. Arlen Specter (Pa.), who gave Vice President Biden a 17-page list of spending requests, said he opposes the proposed increase in funding for Pell Grants for college students because it would do little to spur short-term economic growth. House Minority Leader John A. Boehner (Ohio) said the plan lacks enough "fast-acting tax relief," such as a temporary halt to payroll taxes and more relief for businesses. Sen. John Thune (S.D.) said the nearly $1 trillion price tag would add too much to a federal deficit that is already predicted to top $1.2 trillion for 2009.

"The Republican concerns about what's moving in the House are growing by the day," Thune said. He dismissed as "very, very ambitious" Obama's hope of securing a bipartisan majority of 80 votes for the stimulus plan in the Senate, which could consider its version of the legislation next weekend.

The House plan would devote $303 billion to tax cuts, with two-thirds of that going to individuals, and $550 billion to new federal spending, including more than $300 billion in aid to states and local governments for health-care programs and education.

The House bill also would reverse a controversial change in tax regulations that the Treasury Department made last year at an estimated cost of $140 billion in lost revenue. The change, intended to encourage bank mergers, allows banks to shelter their own profits from taxes based on losses at companies they acquire. Treasury made the switch without public notice or congressional approval.

The proposed language would preserve the benefit for companies that already have announced mergers but eliminate it for new deals, and it also says that Treasury lacked the authority to make the change.

As House panels considered the $850 billion legislation this week, no Republicans from the Appropriations or Ways and Means committees supported it. Pelosi said she would bring the bill to the full House by Wednesday, regardless of whether the Cantor group has met with Obama by then.

Some senators remain hopeful that they can find a more bipartisan approach than the House, particularly in the traditionally accommodating Finance Committee, which will consider its tax package Tuesday.

Sen. Charles E. Grassley (Iowa), the ranking Republican on the finance panel, said he could "buy into 90 percent" of the emerging plan but opposes the nearly $90 billion in aid to states for Medicaid because some governors would use the money to mask poor decisions in other portions of their budgets.

"Right now, that's kind of an impediment to bipartisanship on the whole package," Grassley said.

Republicans hold 41 Senate seats, requiring total unity to block the stimulus plan by a filibuster. Democrats and Republicans have said that at least a few GOP senators will probably back the economic recovery plan because the financial crisis has become so grave.

But some key Democrats are pushing to add pieces that would result in fewer Republican votes. Pelosi and Sen. Richard J. Durbin (Ill.), the No. 2 Democratic leader in the Senate, support including changes to bankruptcy laws that would allow judges to modify loans on primary residences, which they say would help alleviate the housing crisis.

Republicans and the banking industry have vehemently opposed this because it might cause mortgage interest rates to rise.

Meanwhile, Senate Republicans accused Democrats of leaving them out of the process of crafting the spending side of the plan, prompting the Senate Appropriations Committee to delay taking it up.

Republicans said they believe Obama's commitment to changing the tone in Washington but question whether he can control congressional Democrats. "I don't know how much he's driving it," said Sen. Christopher S. Bond (R-Mo.).

Obama would not be the first president to promise a bipartisan tone and find a much different attitude on Capitol Hill. Democrats chafed under the iron-fist rule of Republicans for most of 1995 to 2007, during which the toughest tactics were deployed after George W. Bush took office promising to be a "uniter, not a divider."

Some Democrats said the goal should be passing legislation that deals with the largest financial crisis in 70 years, with or without much Republican support.

"If it's passed with 63 votes or 73 votes, history won't remember it," Durbin said.

Staff writers Binyamin Appelbaum and Lori Montgomery contributed to this report.

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