Monday, February 2, 2009

Democrats Indicate Areas of Compromise on Stimulus

The broad outlines of how the Obama administration’s near-trillion dollar stimulus package may change in the Senate began to become visible on Sunday, with Democratic senators indicating that they would be open to considering Republican amendments to the bill, particularly in the areas of housing and infrastructure spending.

Senator Charles E. Schumer, Democrat of New York, said that Senate Democrats were interested in considering Republican proposals to do more to help the sputtering housing market, including instituting a $15,000 tax credit for all home buyers.

“One of the Republican proposals is to raise the $7,500 tax credit we give to new home buyers, raise it to up $15,000 and do it for all home buyers,” Senator Schumer said on CBS’s “Face the Nation.” “That’s something that we look favorably upon.”

Mr. Schumer, who is a member of the Finance Committee, also said he was also interested in passing legislation aimed at getting mortgage rates down to 4.5 percent, although he said he thought that might go in the next part of the bailout measure approved by Congress last year, not the stimulus package.

He added, “I think we will get real agreement on the housing part.”

Senators of both parties also said on Sunday that they expected a significant amount of additional money — about $20 billion to $30 billion — to go toward infrastructure spending on such things as roads and bridges. Senator Schumer also said he supported an additional $5 billion for mass transit spending.

But there was significant disagreement along party lines over whether the additional spending should add to the bottom line dollar figure of the bill. With interest, the $819-billion version of the bill that passed the House last week could actually cost up to $1.2 trillion, the director of the Congressional Budget Office, Douglas Elmendorf, told the House Budget Committee on Tuesday.

Senator John Kerry, Democrat of Massachusetts, speaking on NBC’s “Meet the Press,” said that he would be willing to “raise the total price tag” of the bill to include get the additional spending sought by the Republicans.

But Senator Mitch McConnell of Kentucky, the Republican leader in the Senate, said, “There’s going to have to be a lot taken out of this bill for Republicans to support it.”

The Senate version of the bill is already substantially different from the House package, including a provision to protect millions of middle-class Americans from having to pay the alternative minimum tax in 2009 that brings the total cost of the Senate bill to nearly $890 billion. Reconciling the two versions will require further negotiations with House leaders after the Senate acts. Floor debate is expected to last through next week.

President Obama will meet with House and Senate Democratic leaders on Monday afternoon, the White House said on Sunday, at which the stimulus package is likely to be the chief topic of discussion.

Indicating the types of cuts the Republicans would like to see to the bill, Senator Jon Kyl, Republican of Arizona, said on “Fox News Sunday” that he took issue with the Obama administration’s signature $500 tax credit to working families — which some economists have said will not result in sufficient additional spending — as well as with the creation of dozens of new government programs and the transfer of billions of dollars to the states.

Senator Kay Bailey Hutchinson, Republican of Texas, said on NBC’s “Meet the Press” that she wanted cuts to “social spending provisions” that total about $200 billion in the bill. Additional tax cuts, Ms. Hutchinson and other Republicans said, would be more effective than large-scale government spending programs.

“The whole idea is to stimulate the economy immediately,” she said. “I think we can do it more effectively with less money. Let’s do something timely, temporary and targeted, and do it on an overwhelmingly bipartisan basis. It still can be done.”

Senators from both parties also disagreed over how much of an overhaul the bill needs. Democrats continued to defend the measure in its broad outlines, with Senator Schumer indicating that four Republican senators have already indicated they will support the bill. Democrats, who control 58 seats in the Senate, need to pass the filibuster-proof majority vote of 60 to get the legislation approved.

“The overall bill is the right bill,” Senator Schumer said. While there are certain spending programs that will come out of the current bill, “the changes will be small,” he said. But Senator Kyl, the Republican whip, warned his party would withhold support for the bill unless there were “major structural changes to it.”

“I see support for this legislation eroding,” he said. “I think the more people around the country see of it, the angrier they get, because it’s very wasteful. It spends way too much money.”

The Obama administration and Democrats have already cut two provisions in the bill passed by the House of Representatives last Wednesday without a single Republican vote. Dropped from the bill was $200 million to fix up the National Mall and millions for family planning that Republicans said would finance contraceptives.

As Mr. Schumer put it on "Face the Nation," "This will pass with Republican votes, because it’s a good package, and because we will make some changes around the edges."

Source: The New York Times

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