House will likely approve stimulus package, but not everyone’s happy

President Barack Obama
REUTERS/Larry Downing
President Obama speaks to reporters yesterday before a meeting with Senate Republican members about his economic stimulus package while on Capitol Hill.

WASHINGTON, D.C. — The U. S. House appears poised to pass its version of the economic stimulus package today, but don’t expect any handholding across the aisle or choruses of  “Kumbaya”  echoing off the vaulted ceilings.

This is Congress, after all — the seat of American politics. And, despite all the new bipartisan rhetoric, this unprecedented bill has still managed to stir up a good old-fashioned brawl, even leaving some in the Democratic majority with a few ruffled feathers.

“My concern with the bill that we are addressing here tonight and discussing is that it is acting irresponsibility,” Minnesota Republican Rep. Erik Paulsen said during debate on the House floor last night. “This stimulus bill has essentially now turned into a supplemental spending bill.”

Paulsen called the bill a “grab bag of special interest spending.” He later referred to money that would go to help re-sod the National Mall as one example of the bill’s inappropriate spending measures.

Barring any unforeseen changes to the bill, Paulsen said he would vote against it, along with what is expected to be most of his Republican colleagues in the House.

This will still not be enough to stop the bill from passing, but Paulsen’s stance on the estimated $825 billion piece of legislation is no trivial thing — it happens to be a fairly good indicator of how well President Obama and the Democrats have actually done in wooing Republicans across the aisle.

First big vote
Paulsen just took office a few weeks ago and hails from Minnesota’s third district, which was once the throne of well-known Republican centrist Jim Ramstad. And, in his first big congressional vote last week, Paulsen showed his own moderate side, voting with the Democrats in favor of the expansion of government health coverage for low-income children.

That has left him as something of a target, not only for Dems trolling for more bipartisan showing, but also for interest groups looking to rally more support behind a bill, which stands to send lots of  money in many different directions.  

On Tuesday, for example, the Children’s Leadership Council urged Paulsen to “Stand Up for Minnesota Children,” or — in more direct words — to vote for the bill.

The council has made similar pitches to other new Republicans and those who voted for the children’s healthcare bill, according to spokeswoman Bridgett Frey.

But, as of Tuesday night, Paulsen and most of his House brethren remained unswayed.

“This is really a tax and spend package, we are borrowing from the next generation,” said Minnesota Republican Rep. Michele Bachmann during a teleconference call this week with Georgia Republican Rep. Tom Price. “It is egregious the amount of money that is being spent.”

Minnesota’s only other Republican Representative, John Kline, declined to comment about the stimulus bill in advance of the vote. But, given his conservative voting record, it would be surprising if he decided to buck his party on this one.

“Despite Obama’s high approval rating, the economic crisis, and with what I take to be his sincere attempt to work with House Republicans, the House is a partisan place,” said Kathryn Pearson, an assistant professor of political science at the University of Minnesota and an expert on Congress. “The rules and advantages accrued to the majority party just exacerbate partisanship. They also don’t need the Republican votes to pass the bill.”

Will it create jobs?
The bill that the House will vote on today combines $275 billion in temporary tax cuts to spur spending and business investment, along with hundreds of billions of dollars for job-creating investment projects, health industry and education improvements, and expanded aid for the poor and unemployed.

But Republicans have questioned whether the money would actually create and maintain the 4 million jobs, which the administration is currently projecting. (Check out Steve Perry’s economic analysis here.)

Other Republican gripes are as follows: it will not roll out quickly enough, needs to have more tax cuts, and needs to have more emphasis on sunset provisions to stop the spending once the economy rebounds.

“The big questions are: Is it going to work? And has it really been well thought out?” said Ann Markusen, director of the Project on Regional and Industrial Economics at the Hubert Humphrey Institute. “I think the passage of this bill has a very important symbolic value, but I don’t think it has been very well thought through.”

Still, most economists and policymakers now agree that the economy needs an immediate and massive infusion of money to prevent collapse.

“The House stimulus plan will not reverse the current downturn, but it will provide a vital boost to the flagging economy,” said economist Mark Zandi, a former financial advisor to Sen. John McCain (R-Ariz.), at a hearing yesterday before the House Budget Committee.

Zandi added this warning: “Without a stimulus, unemployment will rise well into the double digits by this time next year, and the economy will not return to full employment until 2014.”

His comments were bolstered by other expert testimony at the hearing, including that of Douglas Elmendorf, director of the Congressional Budget Office.

Elmendorf stressed that a majority of the money would make its way into the economy in the next year and half mainly through its tax cut provisions.

Republicans had seized on a previous CBO report, which indicated that only one-third of the money proposed for infrastructure projects would be spent by the end of fiscal year 2010 to make the point that the stimulus money would not be spent quickly enough and would therefore not have the desired stimulating effect.

Right balance?
When questioned yesterday about the current breakdown between tax cuts and spending (a roughly one third/two third split right now), Elmendorf demurred.

“Naturally, I can’t tell you whether you got that balance right,” Elmendorf told lawmakers on the panel, adding that “appropriations pay out more slowly, but it doesn’t mean that they aren’t useful.”

According to CBO’s new report, (PDF) an estimated 64 percent of the money would make its way into the economy within 19 months.

Minnesota may get as much as $3.2 billion, based on state-by-state projections from earlier versions of the bill, which could go a long way to filling that $4.8 billion deficit problem that the Gov. Tim Pawlenty talked about yesterday.

That money would include separate funds for the state’s healthcare, education and infrastructure systems. Here’s a preliminary glimpse at just three areas: Preventative health and health service block grants, $8,106,483 million; Title I funding, $113,638,000 million; infrastructure investment,  $684,662,950 million.
This, of course, is the good side — money going to areas that desperately need it. The bad side, which most people agree on, is how this stands to increase the U.S. deficit.

The CBO forecast in early 2009 that the deficit would tally $1.2 trillion in fiscal year 2009, which would be the largest U.S. deficit as a percentage of the country’s gross domestic product since World War II.

Minnesota Democrat Rep. Tim Walz said that he did not like the idea of deficit spending, but that he felt there was little other choice.

 “This is to stop the bleeding and start putting things in place that we can build on,” said Walz, adding that in this situation “the fear of doing too little outdoes the fear of doing too much.”

And, on that note, some of Minnesota’s Democrats are indeed rallying for more.

Seeking transit money
Rep. Keith Ellison from Minneapolis is cosponsoring an amendment that would that would increase transit capital by $3 billion, likely bringing more dough into his urban district.

Meanwhile, Transportation and Infrastructure Committee Chairman Jim Oberstar has not been shy about the fact that he thinks more money should be going toward infrastructure projects.

According to “The Takeaway,” a public radio show produced by WNYC and Public Radio International, Oberstar recently got in a shouting match with National Economic Council Chair Larry Summers over the mass-transit funding in the stimulus. Oberstar reportedly wanted more funding for mass transit, and rail in particular, and emotions ran red when he confronted Summers over it. Read the full story here.

On Wednesday, Oberstar spokesman John Schadl said that Oberstar  had originally wanted $5 billion for rail. But the draft of the bill that came out of the House Appropriations Committee last week only included $1.1 billion.

Schadl said that Oberstar disagreed with Summers, who apparently doubted that the infrastructure money could be spent quickly enough. Schadl said that the Iron Range Congressman felt that Summers was coming at the problem from an academic standpoint, rather than a real-world vantage.

 “If anyone understands how an infrastructure project can help a stressed economy it is Jim,” Schadl said. “He has some real concerns with the way Mr. Summers is approaching this.”

Cynthia Dizikes covers Minnesota’s congressional delegation and reports on issues and developments in Washington, D.C. She can be reached at cdizikes [at] minnpost [dot] com.

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Comments (1)

  1. Submitted by david granneman on 01/28/2009 - 05:27 pm.

    hello all
    i would like to thank the young people (our children) who are about to enter the job market for the great sacrifice you will be enduring. obama and the democrates in congress are placing a huge burden on your shoulders. you see the money they are about to spend will need to be paided back with interest by someone – that someone will be you. instead of enjoying life as we (your parents) did, you will be forced because of massive spending programs into paying higher and higher taxes, in a job market punished by environmental regulations with fewer and few high paying jobs. the reward for your sacrifice will be a slowly deminshing way of life and prosperity.
    again on behalf of president obama and the democrates i would like to say – THANK YOU
    the obama and the democrates plan will solve all our problems.


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