Congress Reaches Stimulus Accord
$790 Billion Bill Expected To Receive Final Approval And Go to Obama Soon
Thursday, February 12, 2009
Congressional leaders agreed yesterday on the details of a nearly $790 billion stimulus package, an unprecedented attempt by the federal government to jolt the economy, create millions of jobs and ease the financial woes facing individuals, businesses and states.
The House is expected to vote on the plan today or tomorrow, and with Senate action quickly following, the legislation is set to arrive on President Obama's desk no later than Monday -- the target Democratic leaders set last month for enacting it into law.
The final product is similar to the ideas Obama outlined when he took office on Jan. 20, but it claims many co-authors, including House liberals who saw a rare opportunity to secure new social spending, as well as the three moderate Republican senators who demanded $100 billion in cuts as the price of their support.
Three months ago, the stimulus plan was envisioned as a $300 billion rescue package that the incoming Obama team had hoped would be enacted well before Inauguration Day, which would have cleared the way for the new White House to start from scratch on an ambitious domestic agenda. Instead, it became a politically charged first test for the Obama administration and the newly expanded Democratic Congress, as well as a rallying point for congressional Republicans.
The bill is made up of four broad categories: tax breaks for individuals and businesses; investments in health care and alternative energy; funding for "shovel-ready" infrastructure projects; and aid to state and local governments, including expanded benefits for individuals who are unemployed and lack health insurance.
After a tentative agreement was struck between Democratic leaders of the two chambers yesterday afternoon, some House Democrats appeared eager to scuttle the deal, as lawmakers vented about deep reductions in education and other social programs. At one point, Democrats in a hastily called meeting jokingly chanted "We want more" before relenting. Speaker Nancy Pelosi (D-Calif.) later told reporters: "We have come to an agreement with the Senate as to how we will go forward and I think people are happy about that." There are some provisions "we wish that were still there," she said, "but the fact is that there's plenty there to create nearly 4 million jobs that the president has set as our goal."
In announcing the deal, Senate Majority Leader Harry M. Reid (D-Nev.) said: "Like any negotiation, this involved give-and-take -- and if you don't mind my saying so, that's an understatement. But the agreement we've reached stays faithful to the principles."
Obama has said that whether the legislation creates the millions of jobs he has promised will be the measure of its success or failure, and many economists remain highly skeptical about its potential for providing a significant boost to the sagging economy. But in the near term, the compromise stands as the first major achievement of the new administration.
Many details of the package remained elusive last night, but initial calculations showed that the bill includes $282 billion in tax breaks, including a temporary fix to the alternative minimum tax and a new tax credit for home buyers, although it was drastically reduced from the Senate-passed version. Spending for highways, bridges and other transportation projects is nearly $50 billion. The measure would provide an additional 20 weeks of unemployment payments and health-care subsidies for people who are out of work. Social Security recipients would receive an additional $250 payment, and the federal government's contribution to the Medicaid program would increase dramatically.
Obama called the bill "a hard-fought compromise that will save or create more than 3.5 million jobs and get our economy back on track." But despite the acknowledgment of ceding some ground, the president secured many of his biggest priorities in the legislation, including the longer-term health-care and energy investments that the administration views as a down payment on broader reforms.
To keep the pressure on, Obama will travel to Peoria, Ill., today to visit the headquarters of Caterpillar, a mainstay of his home state's economy, which recently announced that it will lay off more than 20,000 workers. Obama said Jim Owens, Caterpillar's chief executive and a recently appointed member of the White House's new Economic Recovery Advisory Board, relayed that if the stimulus bill passes, "his company would be able to rehire some of those employees."
Although a trio of GOP moderates -- Sens. Arlen Specter (Pa.), Olympia J. Snowe (Maine) and Susan Collins (Maine) -- succeeded in paring spending provisions written in the House and securing more tax relief, the changes did not make much of a dent in Republican resistance to the measure. Obama wooed House and Senate Republicans in closed-door meetings and at a bipartisan White House cocktail party, but the House bill passed earlier this month with no GOP support and the Senate version drew only the three GOP negotiators. Democratic leaders said they do not expect that to change significantly before final passage.