Congress Passes Stimulus Package

Speaker of the House Nancy Pelosi (D-Calif.) spoke Friday after a vote with no Republican support passed the $787 billion stimulus bill.Video by AP
By Shailagh Murray and Paul Kane
Washington Post Staff Writers
Saturday, February 14, 2009

With the final vote coming late in the night, Congress yesterday approved a $787 billion stimulus package that aims to spur millions of jobs through massive new investments in energy, transportation, education and health-care projects, while reviving social safety-net programs that have been shrinking for nearly three decades.

The bill passed the House 246 to 183 and, in a vote held open for several hours, the Senate 60 to 38, both largely along party lines. President Obama is expected to sign it into law early next week.

The legislation represents the start of a new ideological era that places the federal government at the center of the nation's economic recovery. It also provides a down payment on much of President Obama's domestic agenda, including his pledges to upgrade the nation's aging roads, bridges and electricity grid; overhaul health-care record-keeping and invest billions in alternative energy research to reverse climate change and wean the country from foreign oil.

The passage is an early triumph for Obama, even though he was able to attract only three Republican senators to sign on to an effort that he once hoped would pass with large majorities from both parties. Nevertheless, the White House and Democratic congressional leaders were able to move what became an 1,100-page bill from first draft to final passage in less than a month, keeping to the ambitious timetable they set.

The package combines tax cuts with new spending, and three-quarters of the money is planned to reach state capitals, businesses and individual taxpayers by the end of September 2010. Its virtues and limitations will remain uncertain until the money is paid out in the form of road projects, unemployment checks and energy-efficient building improvements, but its reach is already clear.

The New Deal of the 1930s equaled no more than 2 percent of the nation's gross domestic product. The new legislation represents over 5 percent and is probably no more than an opening bid -- Obama and his congressional allies will next turn to the foreclosure crisis, the reform of financial markets and an overhaul of federal budget practices.

"Passing this plan is a critical step," Obama said at the White House yesterday morning. "But as important as it is, it's only the beginning of what we must do to turn our economy around."

Republicans were scornful of the legislation, depicting it as pork-laden and ineffective. "This bill is supposed to be about jobs, jobs, jobs, and it's turned into nothing more than spend, spend, spend," said House Minority Leader John A. Boehner (R-Ohio).

White House officials predict the measure will create 3.5 million jobs over the next year and a half, easing the effects of the worst economic downturn in a generation.

Some private analysts said the slimmed-down measure is likely to fall well short of that goal, creating fewer than 2.5 million jobs and leaving the unemployment rate over 9 percent through 2010. They also cautioned that even if the package boosts economic activity, conditions are likely to continue to deteriorate unless the administration finds a way to thaw frozen credit markets and revive the paralyzed banking system.

"The financial crisis we're battling against is extreme, and if we can't start to get the financial crisis under control, then whatever we do on the fiscal side isn't going to help that much," said Nigel Gault, chief U.S. economist at the private consulting firm Global Insight.

Among the stimulus's chief beneficiaries are people who are unemployed or otherwise struggling through the downturn. Its hefty investments in Medicaid and education troubled even some moderate Democrats for their degree of federal intervention and helped to mobilize a group of Senate centrists to cut $100 billion from the bill.

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