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Centrist Compromise Clears Stimulus for Senate Passage
WASHINGTON - Senate Democrats and a handful of moderate Republicans agreed Friday to push a revamped economic recovery plan costing at least $780 billion, after a strong push from a White House ratcheted up pressure on the gridlocked lawmakers.
Sen. Arlen Specter, R-Pa., left, and Sen. Susan Collins, R-Maine talk to reporters on Capitol Hill in Washington, Friday, Feb. 6, 2009, as they wait for an elevator after a meeting with Senate Majority Leader Harry Reid of Nev. on the economic stimulus legislation.
(AP Photo/Susan Walsh)
The new plan, which the Senate could vote on as soon as Saturday, is
expected to pass. It slashed an estimated $110 billion from the
Democratic-authored bill that's been debated all week.
But it was clear that Democratic measure lacked the 60 votes needed under Senate rules to clear procedural hurdles. Democrats control 58 seats in the 100-member body.
Led by Sen. Ben Nelson, D-Neb., the centrists joined with two like-minded Republicans - Sens. Susan Collins of Maine and Arlen Specter of Pennsylvania - and produced a package that, according to senators, cuts $19.5 billion slated for school and higher education construction and half of a $79 billion fund to help states with education spending.
Also trimmed were dozens of other programs, including Superfund, Head Start and Early Start, energy loan guarantees and historic preservation.
The plan would retain some key features from the Senate Democrats' bill. It would spend $45.5 billion on infrastructure, including highway projects; help fund water and sewer projects; provide $87 billion to states for help with Medicaid; and give a $70 billion break from the Alternative Minimum Tax, according to Sen. Collins, R-Maine.
The compromise "cuts away many projects that are worthwhile projects but do not belong in a stimulus package," she said, "because they have nothing to do with turning our economy around and creating and saving jobs."
Democrats who backed the original bill explained that while they disliked the changes, they had little choice.
"I come from a state that has to build a school a week to stay even. But I also come from a state with more people unemployed than some states have population," said Sen. Dianne Feinstein, D-Calif.
The logjam broke as Obama got more involved.
Obama Friday had turned up the pressure on lawmakers with some tough talk and a new plan to make personal pitches for support. He acted as the government reported that the nation's unemployment rate ballooned to 7.6 percent in January, and monthly job losses were the worst in 35 years.
"These numbers demand action," the president said. "It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work. It is time for Congress to act."
The compromise congealed when Democrats agreed to education cuts.
Sen. Ton Harkin, D-Iowa, was clearly annoyed at the concessions, but said he would support the bill.
"It's something that needs to get done," he said, adding, "and we Democrats need to remind people why these school cuts were made. We can't let up."
Still, most Republicans objected to the compromise.
"Republicans are ready to support a stimulus bill. But we will not support an aimless spending spree that masquerades as a stimulus," said Senate Republican Leader Mitch McConnell, R-Ky.
"If this legislation was passed," added Sen. John McCain, R-Ariz., "it'd be a very bad day for America."
"Probably the largest generational theft bill in the history of mankind," said Sen. Tom Coburn, R-Okla., emphasizing that the measure will add to the national debt.
The agreement, reached after three days of closed-door negotiations, was President Obama's first major legislative test, and the White House made a hard last-minute push to get it.
White House Chief of Staff Rahm Emanuel ironed out final details at a closed-door meeting with Collins, Specter, Nelson, Democratic Leader Harry Reid of Nevada and Independent Joseph Lieberman of Connecticut.
Emanuel then pushed the plan at what was described as a friendly 20-minute closed-door meeting of Democratic senators.
Once the Senate passes the bill, members from both houses of Congress are expected to meet and craft a compromise that they hope would be ready for final votes by the end of next week.
Obama will step up his effort to push the process along. He's calling for millions of his campaign supporters this weekend to gather for house parties to drum up support - although sign-ups were quite low Friday - and Monday evening will hold his first presidential news conference.
The president also will begin holding town hall meetings in high-unemployment cities - a
change from his earlier plans to stay in Washington. Monday he'll travel to Elkhart, Ind., where White House press secretary Robert Gibbs said unemployment had surged in the past year from 4.7 percent to 15.3 percent.
On Tuesday, Obama plans to travel to Fort Myers, Fla., where unemployment is 10 percent.
"I think going directly to where the problems seem even more acute (is) important to the
president and important in his effort to convince Congress to move swiftly," Gibbs said.
Obama will be trying to pressure a Democratic-led Congress that, despite all the rancor,
has largely agreed on major parts of the package.
The Senate and the House of Representatives separate versions of the legislation are close on infrastructure spending numbers. Both also have about $5 billion to help fund public housing. Both provide a $79 state stabilization fund for education programs, as well as about $13.5 billion to fund programs for children with disabilities. And both contain Obama's "Making Work Pay" tax break for working families, which gives most taxpayers an effective rebate of $500.
There also are some significant House-Senate differences, notably on housing. Senate Democrats embraced a GOP-authored plan to give a $15,000 tax credit to people who buy new homes, recently foreclosed homes or houses facing foreclosure. The House bill omits this.
Sen. Johnny Isakson, R-Ga., the chief sponsor, patterned his amendment after a tax credit that then-President Gerald Ford pushed through for anyone who bought a home in 1975 to help alleviate a housing crisis then.
"We have a pervasive housing problem," Isakson said, "and we have a historical precedent that works."
But would it? Several housing experts agree that every little bit could help stem foreclosures - there were 3.2 million foreclosure filings in 2008, an 81 percent increase over 2007 - and boost sluggish new housing sales.
Analysts doubt, though, that the $15,000 tax credit is enough to have a major impact on the underlying problems that are crippling the housing market.
"The bigger problem is the availability of credit," said Rick Sharga, vice president of marketing for RealtyTrac, a real estate Web site. "It will do nothing for people in foreclosure. We have a major problem with unemployment numbers and the tightness of available credit in the market."
Stephanie Moulton, an assistant professor at the Ohio State University's John Glenn School for Public Affairs, said the tax credit could "stimulate the economy generally" but wondered, given the rising unemployment rate and difficulty in obtaining credit, who'd be able to take advantage of the offer.
Looking at the people facing foreclosure, the problem is the high loan-to-value they are facing," she said. "They can't get the value out of their homes - they need to get the full value out of their homes, and I don't know if a $15,000 credit will help."
(Margaret Talev contributed to this report.)
ON THE WEB
Congressional Budget Office analysis of Senate stimulus plan
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26 Comments so far
Show AllWow.
More tax cuts for the wealthy, and cutting education funding.
Are you people TRYING to prove to the world what complete idiots you are? If so, you are succeeding spectacularly.
The 'money' Obama is proposing to 'spend' is based on collected taxes. If you reduce the amount collected, you have less overall in the governments coffers. The obscenley wealthy keep MORE of what they have, hoarding it, an the middle class and poor have even LESS as everything they have goes to paying for the abusive profits of the corporations and thier shareholders.
What's worse is that the US dollar is a fiat currency. It has no basis for it's value other than what the goverment says it is worth. It is not backed by reserves of gold, silver or any other tradable commodity. Most of the worlds currencies are.
Here's another little secret. 99% of the worlds money DOES NOT EXIST outside of the realm of datastreams and computers. If every person in the world with a bank account tried to withdraw all their money during a one week period, THERE WOULD BE NO ACTUAL MONEY LEFT. The worlds various currencies would dissapear within hours on the first day, leaving NOTHING for the people who would follow during the rest of the week.
Cutting education makes about as much sence as opening a vein in shark infested waters. Closing schools and denying childern adequete programs in todays world ENSURES a continuation of the dumbing down process and gives rise to another entire generation of drones only fit to ask 'Do you want fries with that?' The US already leads the world in functional illiteracy.
But maybe that's the idea.
An ignorant populace is an easily controlled populace. No inconveinient asking of questions about why the rich are SO rich. Or why the only paying job seems to be holding a gun and going to kill other poverty striken people at the orders of the wealthy.
Look at it honestly. Look at the FACTS. And then ask yourself, is there really that much difference between the US of today and it's new mortal enemy found in radical Islam?
Walk in peace.
What is wrong with you? The wealthy need the tax cuts or they might not be able to afford to buy as many Congresspersons and state representatives. And if those people don't stay bought, they might start doing crazy things like proposing bills to help the little people.
Don't worry. Cutting taxes and funding for education is the norm out here in Mississippi and the voters take it with glee. Unfortunately, I will be once again hanging my head down in sorrow as you guys in Canada try to make any sense out of us. Just don't get infected. It's already happening in Europe slowly and silently and it has been going on in Canada what with the elections.
If common sense was dynamite, PM Stephen Harper wouldn't have enough to blow his nose.
Walk in peace.
I stumbled across this. Please read it:
http://www.rense.com/general85/des.htm
If shipping worldwide has truly been cut by 94%, then that means no matter how much fiat currency is being pumped into the banks by governments around the world is going to help.
I think Gordon Brown let it slip the other day when he said the world is in a depression. He should know. He was the UK's Finance Minister under Tony Blair.
The population is NOT being told the truth.
Walk in peace.
Thank you for this information.
The BDI is a daily average of prices for shipping. Galen don't be sucked in by the starving in the streets scaremongers. Look at the 7 year history and you will see that the cost of shipping (not the amount) is down 86% from last June. Shipping has always been very volatile, its how Onassis made his money, and the recession has created excess capacity causing a price crash.
http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
The reason the shipping companies have slashed their shipping rates to their 'bunker fees' is BECAUSE no-one is shipping durable goods. 5% of the worlds ships have been abandoned in their last port of call. The crews tied up, off loaded, and walked away.
Walk in peace.
Wealthy people (and there are no middle class Senators)are incapable of understanding that tax credits do absolutely nothing to help people who don't have a pay check. You can't eat a credit. You can't keep yourself warm with a credit. A credit is a bonanza for the wealthy. But their wealth is the reason why the rest of us have been losing for the last eight years.
If you are not rich now, don't support elected leaders who promise to make you rich. Every bill they pass that cuts taxes will just leave you farther behind the jet set.
Tweedle dum and Tweedle dee.
There's no point getting upset about the democrats not fighting-they are on the same side as the republicans.
Once you admit that, you have more peace of mind when reading the news.
Well, I don't have more peace of mind at all when reading the news about the Republican/Democrat mesh. Nobody should have a peaceful mind about it. It should lead to riots on the streets.
Centrist Sellout would be a more accurate title. I read that the compromise is 40% tax cut, 60% investment. What a waste of our money. Looks like what we will end up with is too little too late. And Obama will take the fall. That's what the Republicans are after. Think they give a damn about people losing jobs and homes?
At least I got a laugh out of Tom Coburn's comment, "largest generational theft in the history of mankind". Only a Republican could say that with a straight face after giving the banks 3 trillion dollars with no strings or accountability while they ran off with the money and splurged on parties while 3 million homes moved into foreclosure and 3 million Americans lost their jobs.
It's too bad the public is so uninformed and the Republicans are so slick at manipulation.
I'm getting curious to read The Uprising by David Sirota. I've been thinking for the last 3 years we have a great depression coming. I can't even predict how ugly it will get. But for American bankers to get away with dragging down the entire world economy with their complex derivatives and credit swaps and then listen to Republicans say it's unAmerican to put any conditions on the money taxpayers provide to rescue them, I find inexcusably offensive. And the corporate media is protecting them. Off with their heads. All of them.
kathyodat
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
Well, you're right, it's looking pretty bad. Krugman's been looking at the stimulus bill and he says it's way too small. He ends with, "this is really, really bad." Get ready to hunker down.
If the Republicans oppose a measure it is 99% certain that the measure is appropriate and proper.
The MSM shilling of the stimulus turmoil is appaling.
There is still nothing for homeowners, workers, students in this version. We are still the only country NOT requiring banks to 'pass-thru' loans.
BTW - McLatchy Press DC Bureau should NOT be included with MSM. They are the renamed DC Bureau of Knight-Ridder News. This Bureau was excluded from ALL Bush admin press conferences for their use of inside sources and publishing same. A group of GOP power brokers from Fla. managed to gain control of KR and sell off its parts thereby eliminating the only major news org. that openly opposed Bush's wars and other policies.
Ah well, I guess we could be like CA where the GOP fascists are holding up the state budget, where at least 1 group is trying to hold the line. Maybe we a need a nation-wide 'COURAGE CAMPAIGN'.
the Courage Campaign is an online organizing network that empowers over 400,000 grassroots and netroots activists to push for progressive change in California.
"California is broke. The state is printing IOUs -- or what we are calling "Arnoldbucks" -- instead of tax refund checks. Unemployment claims are not being processed. And yesterday, government offices were closed and workers sent home without pay.....
We need to put a stop to Republican lawlessness. Before it's too late.
Thank you for helping to restore the rule of law to California.
Robert Cruickshank
Public Policy Director
P.S. Time is not on our side. And we need to show Californians -- and Attorney General Jerry Brown -- that the public demands action now. The best way you can help is by signing our letter to Brown and forwarding this message to your friends ASAP:
http://www.couragecampaign.org/UpholdTheLaw
This is an unprecedented crisis. Without a budget deal, the state cannot provide the economic recovery that we so desperately need. Democrats have already agreed to a package of new revenues and extremely tough spending cuts.
But that's not enough for these right-wing Republicans. Republicans refuse to vote for a budget, unless Democrats agree to eliminate meal and rest breaks for workers and stop the fight against global warming.
The Republicans are proposing trading votes with Democrats to eliminate bedrock labor and environmental protections.
It may sound like politics as usual, but vote trading is against the law. Section 86 of the California Penal Code explicitly prohibits this kind of horse-trading. But Republicans, whose oath to anti-tax extremists supersedes their oath to the constitution, are ignoring the law. They are using the state's financial crisis to explicitly trade their votes for a budget that would crush the California dream.
And now, a coalition of groups are joining together to call on California Attorney General Jerry Brown and United States Attorney General Eric Holder to investigate, including the California Labor Federation, Sierra Club California, State Building and Construction Trades Council and the Planning and Conservation League.
Time is running out. To stop what the Republicans are doing, we have to take action before it's too late. That's why we're joining our friends in the environmental and labor community to ask Attorney General Jerry Brown to investigate Republican legislators for illegal vote trading on our state's budget. Will you join us right noBut I could be wrong !
The 60 vote rule stinks. Though perhaps only a minor improvement why isn't it 60% of those voting. I really wish Democrats and Harry Reid would show some guts and dare the repubs to filibuster. Call their bluff! We'll see who would still vote no.
Politicscorner
If the GOP were forced to filibuster, it would show how much more important their loyalty to their corporate masters is.
But I could be wrong !
It is mind-boggling to me that conservatives don't see the tie in with quality education and a strong economy. Who will become the innovators and business owners of the future if we don't educate our children? How can we manufacture stuff in America and create jobs in America if no one is qualified to fill them?
How can underprivileged youth contribute to society if they aren't given a fighting chance and instead end up just becoming a burden on the system?
We've given this trickle-down economics BS 30 plus years to do its job, and all we have to show for it is the current crisis. It's time to try something else..
Why we need to compromise with failures and fools is something I'll never understand. Pass a strong bill, let the Republicans stonewall it. They'll take the blame when they stand against something that ends up working.
If the Dems give in and the crisis worsens, guess who will take control in four years.
"Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" -Epicurus
The American right wing inherits a hatred for education from its founder's manifesto "God and Man at Yale" -- higher education in America, supposedly, was steeply anti-Christian, anti-American, and anti-capitalist; in so many words, the professors were bandits living off the largesse of their bankrollers & teaching their children to hate their origins.
There is no such thing as a practical or pragmatic conservatism: it is ideology in its purest sense.
Abolish the private Federal Reserve system as well as "fractional reserve banking". These are the roots of so many problems in our world. Governments not only have a right, but a responsibility, to issue currency, instead of stealing money from people through income taxes. Here's how it works; Government issues currency (no debt/interest/inflation) and circulates it into the economy by spending it on the functioning of government and providing the things that society needs; infrastructure, education, healthcare, public transportation, capital loans for industry, etc.
About this so called "stimulus bill". The only people being stimulated by this are the wealthy. I'll bet they woke up with wood this morning.
Spending money on education, whether it's via new construction, renovation or additonal teachers, creates jobs, good jobs...duh! But the PTB (Obama's their guy) don't want an educated public because that is a serious threat to their power. We need the "Superfund" to help clean up the mess we've made, and that would create jobs too. Historic renovation creates jobs and helps foster a connection to the past for future generations.
The 45 billion to be spent on infrastructure doesn't even come close to maintaining the pathetic and crumbling infrastructure we already have, as noted below:
' The Urban Land Institute and Ernst & Young have just published the latest must-read on the topic of lagging infrastructure investment in the United States. The U.S. faces a $1.6 trillion deficit in infrastructure for transportation, energy, water and wastewater through 2010 just for maintenance, concludes "Infrastructure 2007: A Global Perspective." '
HI all.
I just read the CBO report on HB-1. This bill is not a stimulus bill at all. I was surprised, and not happy.
We DO need a stimulus bill, but let's keep it a stimulus bill for crying out loud!
The latest 'stimulus' that the Repubs are doing their best to cripple is EXACTLY the same thing they said Bush MUST get passed to prevent doom from coming at the end of Febuary. Remember?
As well, this 'stimulus' is nothing more than the latest political fluffer hand-job (ask Monica Lewinski about the term) to get some wood for the Viagra addicted corporations.
Look at your car sales. All down for EVERY car maker, Toyota included. Foreclosures happening nationwide at the rate of one every thirteen seconds (that works out to 2 425 846 foreclosures/year... think of all that money just going *poof* out of the economy...). People robbing banks and restaurants to pay the rent and mortgages(when they aren't commiting suicide). California is bankrupt. Hundreds of companies closing down, and MILLIONS out of work (600 000 in January alone!)
GET IT THROUGH YOUR HEADS!
The days of unrestricted growth, Wal-mart-ization and 'Happy Motoring' are over!
Shipping companies have slashed their rates 80+%. Gas prices remain low, but the oil companies are cutting back production beacuse NO-ONE IS BUYING GAS! The companies, corporations and small businesses are going under because everyone is BROKE!
Walk in peace.
i live 50 yards from a main east-west rail line..i have a clear view of what's happening..i have been tracking traffic for the past 2 months..it is not enough time to be statistically relevant, but it seems way down from when i started looking..i see train cars carrying cars which seem empty going in both directions??seems somebody kicked a card from the base of the house--finally..let her fall..we shall deal with what's left or be dead..
ken
"Barack Obama's army is mobilised in bid to save his recovery plan"
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5679436.ece
This is pretty scarry and we're just getting started. Hold on, it's gonna be a long ride.
Hmmmmm.....Who are the folks on Capitol Hill that wanted to dismiss the "Buy American" clause in this bill?
"The Latest Chinese Bridge Collapse: A near 1000-ft bridge under construction in Central China collapsed and killed over 50 people. Speculation has it that inferior building materials may have been the culprit. This raises the broader question of the quality of building materials we are importing from China to build our own infrastructure. One rumor, for example, has it that much of the steel in the recent renovation of the SF-Oakland Bay Bridge is coming from China. On the plywood issue, it turns out Chinese plywood is studded with formaldehyde which can be released as a toxin into homes. Low quality cement raises foundation issues." – Peter Navarro 8/20/07
It would seem that the staffers on Captiol Hill aren't doing their homework!....or is it that their boss' are more concerned with American profits than with American safety?
If these problems have allegedly been corrected, how and by whom are these products being tested to confirm their safety?
Why did Collins swap aid to her state for more tax cuts? I know she's a Republican.........but this makes no sense......even for a Rebublican?
(I realize I just opened myself for easy scorn, but since CD originates from Maine, I'm hoping someone who knows this lady can shed some light on her action.)
JA