House Dems Edge Up Size of Econ Recovery Plan
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 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…
…[House Appropriations Cmte] 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.
WSJ notes a tweak in the business tax breaks: “The proposal also allows companies that have losses this year to get refunds for taxes paid as far back as 2003; current tax rules allow losses to be carried back only two years. But companies receiving money from the financial-system bailout program are ineligible for the tax provision, a blow for some of the nation’s big banks and troubled auto makers…”
The Hill indicates Dems are debating between “more later” or “more now:” “[Rep. David] Obey, speaking to reporters Thursday, seemed to indicate that more needs to be done, likely in the form of another bill. However, in a closed door-meeting Thursday, Democratic members demanded that more be done now. They wanted more transportation dollars, fewer tax cuts and a change in the bankruptcy law to help homeowners facing foreclosure.”
Tell Congress: Pass Economic Recovery NOW!
Greenies MAD! … Or Not.
WSJ plays up conflict with enviros: “Environmental groups criticized the proposed spending for mass-transit systems and intercity rail projects, which was about $7 billion less than Mr. Oberstar had recommended. They have argued that expansion of mass-transit systems could help ease problems posed by climate change, congestion and oil consumption. Critics noted that the stimulus bill would spend three dollars on highways for every one dollar spent on mass-transit systems. When hearings begin next week, environmental groups said, they would push to lower that ratio or even put funding for transit on an equal footing with highways.”
BUT Grist’s Kate Sheppard has a calmer assessment: “Enviros are heartened by much of what they see in the newly released summary of the House’s American Recovery and Reinvestment Act, better known as the stimulus package. But they’re also concerned about how the transportation funds will be spent .”
Sierra Club’s Carl Pope gives balanced praise to NationalJournal.com: “This is not enough, clearly to decisively launch the American economy on the green, clean pathway the American people clearly want. But it’s a good solid down payment, and a responsible set of choices for a President faced with a dilemma — get the existing economy humming again while setting the nation on course to build a new one. What his package — by its nature and timing — couldn’t and doesn’t do is set clear signals for markets about what happens next. That’s where energy reform — not just economic stimulus — will come in. If builders and manufacturers know that by 2030 new buildings must be carbon neutral, they will invest in the factories, and perfect the designs, needed to accomplish that.”
Separate WSJ story notes: “Renewable energy producers … stand to be big winners in the bill, winning an extension of production tax credits that are newly convertible into cash for companies whose losses leave them unable to use the credits.”
“I went back to Ohio, but my city was gone. There was no train station. There was no downtown.”
USA Today reports: “President-elect Barack Obama heads to a manufacturing plant on Friday in Bedford Heights, Ohio, the first stop in an extraordinary new effort to motivate and mobilize millions of citizen-lobbyists to promote his vast agenda … Today’s campaign-style trip is to the Cardinal Fastener & Specialty Co., which makes parts for wind turbines. Obama will tour the plant and meet with workers to talk about how his $825 billion economic stimulus plan will benefit companies involved in efforts to develop new energy sources such as wind power. His supporters, meanwhile, are in the early stages of building a grass-roots network that the Obama administration can tap to shape and promote his policies and serve the country.”
MyDD looks at pro-ARRP ad campaign from Americans United for Change, targeting OH Sen. George Voinovich and timed to coincide with Obama’s trip.
More Reviews Come In
W. Post’s Pearlstein explains why econ recovery is needed: ” …it is necessary to get to the point where supply and demand get back into balance so that the economy can begin to grow again in a healthy and sustainable way. To try to stop that process and return things to the way they were would amount to nothing more than reinflating the bubble economy. What government can do … is try to manage the process so that it doesn’t spin out of control, as it probably would, and turn a recession into something deeper and longer. That’s what the stimulus is about. By making public investments in projects — rebuilding the energy grid, expanding public transit, catching up on years of deferred maintenance of roads and bridges, computerizing medical records — government can provide short-term employment to some people who would otherwise be left unemployed as a result of the adjustment process. And if those projects are carefully selected, then they should be able to pay for themselves in the form of greater output, higher incomes and increased government tax revenue in the future.”
Stateline says states likey: “Crucial to states, the package includes $87 billion to help pay for Medicaid, the joint federal-state program that costs $330 billion annually and serves 59 million needy Americans, and at least $100 billion for infrastructure spending — two top priorities of many governors and state legislators … In a surprise to some, the proposed package also contains $79 billion aimed to prevent states from cutting into schools and college funding and another $41 billion to local school districts. While states and localities were asking for help on the education front, the levels were much higher than many had expected.”
Joseph Stiglitz in FT advises how any tax cuts should be designed (via Economist’s View): “…household tax cuts, except for possibly the poorest, should have no place in the stimulus. Nor should business tax breaks, except when closely linked with additional investment. The one tax cut that should be included is a temporary incremental investment tax credit; it provides a big bang for the buck, encouraging companies to invest now when the economy needs the spending. Increased investments in infrastructure, education and technology, relief to states, and help to the unemployed need pride of place.”
ataxingmatter gives a mixed review: “I like the idea of using some of these stimulus funds to support mass transit–particularly light rail. Climate research facilities are a no-brainer, as are uses of the funds to accelerate already planned agricultural research facilities and similar projects. But many of the tax provisions are especially worrisome. The expansion of the earned income tax credit and child tax credits probably makes sense–that gets money into the pockets of those who most desperately need help. But making the home buyer provision a subsidy?”
W. Post sums up: “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.”
Of course, those amount to a sliver of the overall package, yet do offer some economic impact.
RedState’s Robert Bluey is sad, so sad: “Despite a promise from President-elect Barack Obama to listen to Republican ideas, the plan distributed by House Democrats today includes not a single GOP proposal.”
Marc Ambinder on House conservative hearing: “There is little new policy here [from Mitt Romney's testimony]; he proposes a laundry list of tax cuts, and his appearance is designed to give some intellectual ballast to the ideas that House Repbublicans are already throwing around. That said, he endorses spending money on infrastructure and on renewable energy, even as he proposes significant additional spending on military construction projects.”
OurFuture.org’s Isaiah Poole suffers through the hearing: “Conservative leaders in the House have promised ‘innovative solutions’ to help the Obama administration revive the economy, but what they actually offered on Thursday on Capitol Hill was the intellectual equivalent of well-used stuff put up for bid on eBay in a desperate bid for pocket change … It was the same old song: Tax cuts will be what will save the economy. Public sector spending to create jobs and enhance the public commons is largely wasteful. But when dollars are put into the hands of the corporate sector, prosperity always trickles down.”
Senate Supports More TARP Funds
ProPublica: “Obama’s economic team finally did get a bit more specific with their plans for the second $350 billion of the TARP, and it was enough to win the day in the Senate. On a 52-42 vote, the Senate voted to release the money … Summers did lay down some benchmarks, though the letter does still deal largely in general principles. Among the new specific proposals: $50 billion to $100 billion for a ‘sweeping effort to address the foreclosure crisis’ and a requirement that ‘executive compensation above a specified threshold amount be paid in restricted stock or similar form that cannot be liquidated or sold until the government has been repaid.’ It still looks like we’ll have to wait a little longer for the nitty gritty of the incoming administration’s plan.”
NYT: “The House may still vote on the bailout money, but the point is moot because the law requires action by both chambers to block the funds. Instead, House Democrats said they could focus on their aggressive timetable for the $825 billion stimulus measure. ”
David Sirota chastises newly-elected senators for backing the second round of $350B.
Senate Cmte Backs Health Care for Immigrant Kids
TNR’s Jonathan Cohn: “The Senate Finance Committee … approved an extension–and expansion–of the State Children’s Health Insurance Program. And, like their counterparts in the House, they’ve struck the provision in existing law that prohibits the children of legal immigrants from receiving benefits for five years.”
Media Matters slaps Lou Dobbs Tonight on SCHIP: “CNN’s Sylvester misled on House SCHIP bill’s effect on budget and its citizenship verification process.”
Obama on Social Security & Medicare
W. Post serves up ominous headline: “Obama Pledges Entitlement Reform: President-Elect Says He’ll Reshape Social Security, Medicare Programs”
But Obama quotes to W. Post less ominous: “‘Social Security, we can solve,’ he said, waving his left hand. ‘The big problem is Medicare, which is unsustainable. . . . We can’t solve Medicare in isolation from the broader problems of the health-care system.’”
That implies minor tweaks to Social Security, and broader health care reform to lower costs, not a dismantling of Medicare.
Obama on EFCA
Obama continues support for EFCA, but hints at possible compromises. More from W. Post interview:
The president-elect also gave his support for legislation that would make it easier for workers to unionize, but he said there may be other ways to achieve the same goal without angering businesses. And while many Democrats on Capitol Hill are eager to see a quick vote on that bill, he indicated no desire to rush into the contentious issue.
“If we’re losing half a million jobs a month, then there are no jobs to unionize, so my focus first is on those key economic priority items I just mentioned,” he said. “Let’s see what the legislative docket looks like.”
Are Sweatshops Anti-Poverty?
Huffington Post’s John Tepper Marlin challenges NYT’s Nick Kristof: “[He] sure got my goat yesterday by starting his column with this: ‘What the world’s most impoverished people need isn’t fewer sweatshops, but more of them.’ … Good working conditions are better not just for workers but for owners, their local communities and consumers. The tainted milk in China that made hundreds of thousands of consumers sick, and killed some infants, came from lawless factories … it makes absolute sense that consumers should be willing to pay more, as studies show they are, for products from high-standard factories and farms, certified to the SA8000 decent work standard or to FairTrade or Ethical Trading standards.”