Tentative Senate Deal on Stimulus Plan

[Kanastrous]

WASHINGTON - Amid stunning new job losses and the latest bank failure, key senators and the White House reached tentative agreement Friday night on an economic stimulus measure at the heart of President Barack Obama's recovery plan.

Senate Democrats were now mulling the compromise, which would cap the package at $780 billion. The package had grown to $937 billion after senators added to it, and Obama has said he'd accept a deal around $800 billion.

"There's a proposal that is sufficiently flushed out that we can have a caucus and discuss it," said Sen. Kent Conrad, D-N.D. "This is a proposal that involves many of the interested parties."

A spokesman for Senate Majority leader Harry Reid, D-Nev., said that "Senator Reid needs to talk with his caucus before we can announce a deal."

The breakthrough came after a bipartisan team of senators worked to lower the cost, reducing the overall package to $780 billion, NBC News reported.

Earlier, the package teetered after hours of backroom meetings failed to produce an agreement that could attract crucial GOP votes.

Reid had met with key Republican moderates Susan Collins of Maine and Arlen Specter of Pennsylvania. Both hoped to pare back nonessential spending items in the measure, while a third moderate, Olympia Snowe, R-Maine, worked with Democrats to trim the bill's $340 billion in tax cuts by perhaps $25 billion.

Reid suggested to reporters that he had two GOP backers for the bill but needed at least one more because neither wants to be the crucial 60th vote if all 58 members of the Democratic caucus support Obama.

Officials strongly suggested that Sen. Edward M. Kennedy’s vote would be needed to assure passage. The Massachusetts Democrat, battling a brain tumor, has been in Florida in recent days and has not been in the Capitol since suffering a seizure on Inauguration Day more than two weeks ago. The senator’s office did not comment.

Obama tried to apply pressure Friday, calling days of delay "inexcusable" and announcing trips to Indiana and Florida next Monday and Tuesday to push for passage. Obama also planned a primetime news conference on Monday night.

White House senior adviser David Axelrod told a meeting of House Democrats Friday that there will be "an all-out blitz" next week to sell the bill, according a lawmaker who attended, NBC reported.

Axelrod touted poll numbers that he said showed overwhelming support among the public for the measure.

"We will get this done and you will have a great story to tell," Axelrod told the Democrats, according to the lawmaker who spoke to NBC News.

Sen. Claire McCaskill, a Missouri Democrat who is also part of the bipartisan group, said Republican resistance had centered on the cost and the precedent of Obama's stimulus plan.

Some Republicans are against the notion of having the federal government take on responsibilities that historically have been handled by the states, she said. "They're arguing about the precedent we're setting of the federal government beginning to do things like school construction," she said.

Collins circulated a roster proposing $88 billion worth of net cuts from the measure. She proposed eliminating money in the bill for K-12 education while boosting funding for Pentagon operations, facilities and procurement by $13 billion.

Collins is one of just three to five Republican targets Democrats hope to attract to breach the critical 60-vote barrier, though some in the group, such as Sen. Mel Martinez, R-Fla., were said to be balking.

If a compromise on trimming the bill cannot be reached — or if it will not fly with Democratic loyalists — the alternative for Senate Democrats to try to ram the measure through with just a few Republican supporters, such as Snowe.

Reid said on Thursday night that if progress stalled on the bill he would file a motion to set up a showdown procedural vote for Sunday.

Sen. John McCain, R-Ariz., took to the Senate floor Friday to argue that the federal government is not as efficient in spending money as the private sector.

"This is something that has been absolutely clear for years. And it's the reason we don't have socialism in this country," he said.

He cited a report from the Congressional Budget Office, which noted growing government debt would crowd out private investment.

The CBO report, released Wednesday, estimated that the stimulus bill "would reduce output slightly in the long run. ... The principal channel for this effect is that the legislation would result in an increase in government debt. ... In economic parlance, the debt would 'crowd out' private investment."

But the CBO said that the Senate bill would help create jobs in the short term: by the fourth quarter of next year, it would increase employment by 1.3 million to 3.9 million jobs, CBO estimated.

Obama on Friday decried as "inexcusable and irresponsible" the delay of his economic recovery legislation, noting that an estimated 3.6 million Americans had lost their jobs since the recession began.

Obama's remarks, delivered while naming of an outside economic team of advisers, were some of his most direct and pointed in support of the massive economic package that the Senate was considering on Friday. Obama acknowledged the plan was not perfect and pledged to work with lawmakers to refine the measure, which he called "absolutely necessary."

"But broadly speaking, it is the right size," Obama said. "It is the right scope. ... It will take months — even years — to renew our economy. But every day that Washington fails to act, that recovery is delayed."

The president named his economic team of advisers as the nation dealt with more bad news in the unemployment report for January. Employers slashed payrolls by 598,000, the most since the end of 1974, catapulting the unemployment rate to 7.6 percent. The rate is the highest since September 1992.

"These numbers demand action. 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," Obama said.

"That's 3.6 million Americans who wake up every day wondering how they are going to pay their bills, stay in their homes, and provide for their children. That's 3.6 million Americans who need our help," he said.

Earlier Friday, Reid expressed optimism about the prospects for the package.

"The world is waiting to see what we're going to do in the next 24 hours," he said, adding that a vote on the Senate bill by Friday evening was possible.

Sen. Dick Durbin, D-Ill., told reporters that some of the proposed cuts would be "painful" for Democrats in the area of education and money to states, raising the question of just how many Democrats would support the amendment.
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Republican leader Mitch McConnell of Kentucky said the GOP is ready to support a bill, "but we will not support an aimless spending spree that masquerades as a stimulus."

He added: "Putting another $1 trillion on the nation's credit card isn't something we should do lightly. We need to get a stimulus. But more importantly, we need to get it right."

Obama pleaded with House Democrats on Thursday to reject delaying tactics and political gamesmanship and work with the Senate to get a bill. In the campaign-like speech, the president also ridiculed Republican criticism of the legislation.

"We can't embrace the losing formula that says only tax cuts will work for every problem we face; that ignores critical challenges like our addiction to foreign oil, or the soaring cost of health care, or falling schools and crumbling bridges and roads and levees. I don't care whether you're driving a hybrid or an SUV — if you're headed for a cliff, you've got to change direction," Obama said at the retreat in Williamsburg, Va.

He dismissed at least one GOP complaint about the bill.

"So then you get the argument, well, 'this is not a stimulus bill, this is a spending bill.' What do you think a stimulus is? That's the whole point," he said to laughter from House Democrats.

A roster of $88 billion worth of cuts was circulating, almost half of which would come from education grants to states, with an additional $13 billion in aid to local school districts for special education and the No Child Left Behind law on the chopping block as well. Some $870 million to fight the flu was among the first items to go.

The massive measure is a key early test for Obama, who has made it the centerpiece of his fledgling presidency. Obama embraced the moderates' efforts, saying he would "love to see additional improvements" in the bill.

The bill still contains a "Buy American" protectionist measure that drew strong criticism from major U.S. trading partners including Japan, Australia and Canada.

In the face of warnings by Obama that such rules could cause trade wars, the Senate has agreed to specify in the bill that U.S. international trade agreements should not be violated. It rejected, however, an effort by McCain, Obama's opponent in last year's presidential campaign, to remove the stipulations altogether.

http://www.msnbc.msn.com/id/29050187/

[The Duchess of Zeon]

Yay! Tax cuts were actually eliminated from this bill. That is a surprising and welcome development which gives me hope that Washington is actually working for once.

[Kanastrous]

Depends upon whose tax cuts were eliminated.

[Guardsman Bass]

Yay! Tax cuts were actually eliminated from this bill. That is a surprising and welcome development which gives me hope that Washington is actually working for once.

Yeah, but they also heavily cut into some of the funding that was going to go to the states for relief, as well as education. Presumably on the justification that it won't immediately create jobs.

[TithonusSyndrome]

Sen. John McCain, R-Ariz., took to the Senate floor Friday to argue that the federal government is not as efficient in spending money as the private sector.

"This is something that has been absolutely clear for years. And it's the reason we don't have socialism in this country," he said.

According to who, you deluded fucking ideologue? Your laissez-faire priests, or something a little more rooted in empiricism?

Really, where is this "great man of character" that people spoke of that the presidential race supposedly compromised? Seems to me that he's only as noble as the absence of interests will let him be.

[Guardsman Bass]

McCain's always been a "cut government and pork-barrel spending" advocate. I remember there were at least two occasions on the campaign trail where he called for a freeze on all non-military discretionary funding until they could get the budget sorted out, so it's no surprise that he'd be opposing the Stimulus Package (I'd be more surprised if he wasn't).

[Count Chocula]

Why are you cheering for a "stimulus" package that is around 40% of the FY 2009 budget?

This is all going to be funded by borrowed money, if we can raise the funds. People - and by people I mean other nations - aren't knocking the walls down to by our debt. And this is spending on top of a deficit that is already hundreds of BILLIONS of dollars in magnitude.

Pray tell, how can adding more federal debt benefit the nation as a whole? To use a simple analogy: how can charging more on your credit card benefit you one-two-three years down the line? Short answer: it CAN'T, you will pay more in interest than the goods/services you bought.

This whole deal, regardless of political party, simply reeks of fiscal irresponsibility. The kind of irresponsibility that got Obama elected, and which may see every member of Congress who votes for it back out on the street in two years.

[Duckie]

Dear sir: Taking economics may teach you that government spending is often a good way to revitalise an economy via injection of cashflow and creation of jobs. This is essentially the same strategy behind the New Deal, in part. Granted, to work better it needs to be implemented better in terms of spending targeting and job creation, but this is just the beginning of Obama's plan or so we're told.

Of course, the alternative is that Obama is clearly spending money to make the debt bigger and tank the country because what he's doing clearly isn't recommended by one of the major schools of economics and he's just evil and stupid that way.

[Samuel]

McCain's always been a "cut government and pork-barrel spending" advocate. I remember there were at least two occasions on the campaign trail where he called for a freeze on all non-military discretionary funding until they could get the budget sorted out, so it's no surprise that he'd be opposing the Stimulus Package (I'd be more surprised if he wasn't).

Obligatory referance to 1984s war is the great enforcer of reality.

Sen. John McCain, R-Ariz., took to the Senate floor Friday to argue that the federal government is not as efficient in spending money as the private sector.

"This is something that has been absolutely clear for years. And it's the reason we don't have socialism in this country," he said.

According to who, you deluded fucking ideologue? Your laissez-faire priests, or something a little more rooted in empiricism?

Really, where is this "great man of character" that people spoke of that the presidential race supposedly compromised? Seems to me that he's only as noble as the absence of interests will let him be.

What? You bought the marketing for John McCaintm

I should be fair- he opposed torture, but aside from that there isn't alot that sets him apart from the rest of the party.

Why are you cheering for a "stimulus" package that is around 40% of the FY 2009 budget?

This is all going to be funded by borrowed money, if we can raise the funds. People - and by people I mean other nations - aren't knocking the walls down to by our debt. And this is spending on top of a deficit that is already hundreds of BILLIONS of dollars in magnitude.

Pray tell, how can adding more federal debt benefit the nation as a whole? To use a simple analogy: how can charging more on your credit card benefit you one-two-three years down the line? Short answer: it CAN'T, you will pay more in interest than the goods/services you bought.

This whole deal, regardless of political party, simply reeks of fiscal irresponsibility. The kind of irresponsibility that got Obama elected, and which may see every member of Congress who votes for it back out on the street in two years.

Remember- only wars can be fought on borrowed money. Rebuilding the economy? Never!

[Anguirus]

I should be fair- he opposed torture, but aside from that there isn't alot that sets him apart from the rest of the party.

He caved on that too.

[Count Chocula]

Samuel - are you REALLY going to try to punk three posters on rhetoric? You're smarter than that.

Look at the "deal" - which is back down around $800 billion.

Go over to the CBO and see what they have to say. McCain wasn't speaking his mind when he said the deal was a net loss, he was echoing what the CBO economists think.

Think about adding 40% to your debt load, over 4 or so years.

Then tell the board, specifically, why you think spending money we'll have to borrow and pay off with interest is a good idea.

PROTIP: fired white collar workers won't build highways.

[TithonusSyndrome]

What? You bought the marketing for John McCaintm

Not for a freaking moment, but I know there are people both on and off this board who seem to think that he was something other than a useless army brat with a ridiculous sense of entitlement and compensatory, egotistical pursuit of high office. I wanted to know why.

[Samuel]

What? You bought the marketing for John McCaintm

Not for a freaking moment, but I know there are people both on and off this board who seem to think that he was something other than a useless army brat with a ridiculous sense of entitlement and compensatory, egotistical pursuit of high office. I wanted to know why.

Because advertising works. Seriously, there isn't much more to it than that.

Samuel - are you REALLY going to try to punk three posters on rhetoric? You're smarter than that.

Actually by board standards I'm probably in the 40% (with 100% being best) of contributing members. And that is being exceptionally kind. I talk to short, I assume others think like I do and leave gaps, etc.

Go over to the CBO and see what they have to say. McCain wasn't speaking his mind when he said the deal was a net loss, he was echoing what the CBO economists think.

This?
http://www.cbo.gov/ftpdocs/99xx/doc9977/hr1senate.pdf

Then tell the board, specifically, why you think spending money we'll have to borrow and pay off with interest is a good idea.

Well, it was how we got out of the Great Depression. Is there any reason that we should work solely off tax revenues, which decrease in times of economic collapse.

PROTIP: fired white collar workers won't build highways.

If the alternative is living off welfare alot of them will. Of course, sucking up blue collar workers will reduce the labor pool and raise wages for everyone else.

[Guardsman Bass]

Pray tell, how can adding more federal debt benefit the nation as a whole? To use a simple analogy: how can charging more on your credit card benefit you one-two-three years down the line? Short answer: it CAN'T, you will pay more in interest than the goods/services you bought.

Not if it ultimately brings you greater income during that same period, giving you better capability to pay off the debt at that time. We've been in pretty monstrous debt before - the national debt of the US after World War 2 was on the order of 109% of GDP (versus 60.8% in 2008) - and we managed to pay it down with the revenue from good economic times that followed.

[Illuminatus Primus]

Samuel - are you REALLY going to try to punk three posters on rhetoric? You're smarter than that.

Look at the "deal" - which is back down around $800 billion.

Go over to the CBO and see what they have to say. McCain wasn't speaking his mind when he said the deal was a net loss, he was echoing what the CBO economists think.

Think about adding 40% to your debt load, over 4 or so years.

Then tell the board, specifically, why you think spending money we'll have to borrow and pay off with interest is a good idea.

PROTIP: fired white collar workers won't build highways.

They'll do what? Starve? Spend their money until they have no choice? We're trying to put some people who can't find work and don't have money and aren't spending from pauperization and in the process build infrastructure that can be used by society for more productive activities that create growth. You're such a right-wing tape deck. Don't you have any talking points that didn't arise the previous 36 hours on from the propaganda ministry? I am not a fan of the stimulus because it does not go far enough, but this idiotic concept that we can just hunker down do the same or even cut public spending while in a deflationary trap where private growth is in a tailspin is idiotic. In 1937 FDR listened to "fiscal conservatives" and cutting expenditures and raising taxes while the economy was recovering sent it right back into recession. The debt is being used to finance growth which will lead to more expenditures in the future. The banks are not lending and the private sector is hemorrhaging growth. And you guys think if only we cut taxes (which also drives up debt, just unproductively) will magically get everyone aboard the debt train back onto infinity.

[Guardsman Bass]

Oh, and that CBO Report actually said that while the stimulus would be troublesome in the long run because of the issues related to increased debt (which of course assumes that we don't pay any of it off in the future), it would be stimulative in the short term.

[ray245]

WASHINGTON – President Barack Obama and Senate Republicans bickered Saturday over his historically huge economic recovery plan after states and schools lost tens of billions of dollars in a late-night bargain to save it.

The $827 billion measure is on track to pass the Senate on Tuesday despite stiff opposition from the GOP and disappointment among Democrats, including the new president who labeled it imperfect. Next up: Difficult negotiations between the House and Senate, which are divided over spending for tax cuts, education and aid for local governments.

"We can't afford to make perfect the enemy of the absolutely necessary," Obama said in his weekly radio and Internet address, sounding a note of pragmatism that liberal followers rarely heard on the campaign trail.

Still, the popular president — six in 10 voters approve of his performance so far — scolded Republicans with a pointed reminder that Democrats, not Republicans, were victorious in November.

Hours later, the Senate convened a rare Saturday session to debate a compromise forged between GOP moderates and the White House on Friday, a rare burst of comity aimed at securing passage of the bill with a few Republican votes joining the Democratic majority.

The compromise reached between a handful of GOP moderates led Susan Collins of Maine, the White House and its Senate allies stripped $108 billion in spending from Obama's plan, including cutbacks in projects that likely would give the economy a quick lift, like $40 billion in aid to state governments for education and other programs.

Yet it retained items that also probably won't help the economy much, such as $650 million to help people without cable receive digital signals through their old-fashioned televisions or $1 billion to fix problems with the 2010 Census.

Among the most difficult cuts for the White House and its liberal allies to accept was the elimination of $40 billion in aid to states, money that economists say is a relatively efficient way to pump up the economy by preventing layoffs, cuts in services or tax increases.

"It reduces a number of highly stimulative items like state fiscal relief ... and largely substitute for it some large tax cuts that are highly ineffective as stimulus," said Bob Greenstein, founder of the liberal Center on Budget and Policy Priorities. "So your net result is a bill that gets significantly less bang for the buck."

For all the talk of cuts, the bill retains the core of Obama's plan, designed to ease the worst economic recession in generations by combining hundreds of billions of dollars in spending to boost consumption by the public sector with tax cuts designed to increase consumer spending.

Negotiators left in the package $70 billion to address the alternative minimum tax to make sure families wouldn't be socked with unexpected tax increases averaging $2,300 or so. The problem was going to be fixed later in the year anyway, and congressional economists say fixing the AMT problem helps the economy by surprisingly little.

While publicly supportive of the bill, White House officials and top Democrats said they were disappointed that so much money was cut, including almost $20 billion for construction and repair of schools and university facilities. Those funds would have supported many construction jobs.

The $827 billion package debated in the Senate on Saturday — down from a $937 billion or so version debated during the week — included Obama's signature tax cut of up to $1,000 for working couples. Also included is a tax credit of up to $15,000 for homebuyers and smaller breaks for people buying new cars.

Much of the new spending would be for victims of the recession, in the form of extending unemployment insurance through the end of the year and increasing benefits by $25 a week, free or subsidized health care, and increased food stamp payments.

Obama himself acknowledged that the bill was far from perfect but said it would be too dangerous to leave it lifeless on the table.

"In the midst of our greatest economic crisis since the Great Depression, the American people were hoping that Congress would begin to confront the great challenges we face," Obama said in the address, released before he made his first trip to Camp David, the presidential retreat in the Maryland mountains.

"That was, after all, what last November's election was all about," he said.

Obama made an aggressive push for House and Senate lawmakers to work quickly to resolve their differences. The White House plans a major public relations blitz: A prime-time news conference Monday, several trips outside Washington next week and an address to a joint session of Congress later this month.

Treasury Secretary Timothy Geithner also planned to announce the details of a separate financial stability package on Tuesday, structuring how the administration would use another $350 billion in emergency relief approved last year to prop up the nation's banks on the brink of failure, a senior administration official said Saturday evening.

The official spoke on the condition of anonymity to discuss private administration planning. The announcement had been pushed back from Monday, when Obama plans to pitch his economic plan.

Lawmakers were already looking ahead to House and Senate talks where a handful of GOP moderates such as Collins and Arlen Specter of Pennsylvania — whose votes are crucial to pass the bill — seemed to have the upper hand against House Democrats unhappy with changes such as curbing increases for early childhood education and subsidies to bring the Internet to rural areas.

http://news.yahoo.com/s/ap/20090208/ap_ ... ma_economy

Arg, stupid GOP!

[J]

This is the stimulus bill (PDF file)

Here's a list of the major spending items I grabbed off Reuters


In my opinion the bill is very poorly thought out, yes it will create work and provide for those who've lost their jobs, but, and this is the most important part, it does not build a foundation for the future. It does not address the root causes of our problems, only the symptoms, and it even gets some of those wrong.

Mike made an excellent analogy a while back, the economy right now can be thought of as a teetering condemned highrise building, and we're running around trying to shore it up with 2x4s while building it higher and cramming more people & things into it. Each stimulus package is another group of people with 2x4s and nails entering the building in a futile attempt to patch it up, and another group of people who will be added to the death toll when the building falls, as it must.

We can't keep doing this. We need to build a new building and get everyone out of the old building before it collapses. Moving back to the real world, this means the entire ~$900 billion package needs to be spent on nuclear energy, rail & electrical infrastructure; food, shelter, & social services for those who lose it all while we carry out the transition, and lots of research funds for all the above. We need to accept that the old ways are done, there is no return to the debt & consumption culture of the past decade.

That's why this stimulus bill should be killed, and a proper plan which actually builds a sustainable future needs to be drawn up in its place. We need to carefully consider where we are and where we're headed before taking a blind flyer.

[Knife]

The recession isn't a teetering building though, it is lives. Yes I'd like to see the corrupt and empty system that created it swept away, but to do so would devastate large portions of the population. Not "whoa's me I can't feel the tank of my SUV" devastation, more like huge worker camp type shit. They need to address the symptoms first and slowly move away the carcass of the economic model Bush gave us.

[Count Chocula]

So I'm reading the paper this morning, and it looks like the Senate version of the package is within $10 billion of the package the House passed. So, a week of bickering, backtalk and stupid speeches (Pelosi and McCain come first to my mind) gets us back to the beginning. What a waste of time and money.

[Patrick Degan]

The recession isn't a teetering building though, it is lives. Yes I'd like to see the corrupt and empty system that created it swept away, but to do so would devastate large portions of the population. Not "whoa's me I can't feel the tank of my SUV" devastation, more like huge worker camp type shit. They need to address the symptoms first and slowly move away the carcass of the economic model Bush gave us.

To draw another analogy: it's like having a patient in a hospital with massive trauma. If you don't stabilise the patient, he won't last long enough to get to surgery or survive through it.

[KrauserKrauser]

Isn't that the same analogy that was drawn for the inital bank bailout? That the economy was about to sputter and die if they don't cram as many dollar bills as possible with the fewest strings possible into the gaping maw of the banking industry? Aren't all of the after action analyses revealing that there was no need for such haste and the negative side effects are just popping up again and again?

Seriously, we rushed the first $750 billion and hit ourselves in the faces with it, do we seriously need to reject debate and serious inquiry with this second $800 billion mega-funbding pork bill. If they fucked up the first one and we all know this one is fucked up to, why exactly should we be supporting it?

[Admiral Valdemar]

Isn't that the same analogy that was drawn for the inital bank bailout? That the economy was about to sputter and die if they don't cram as many dollar bills as possible with the fewest strings possible into the gaping maw of the banking industry? Aren't all of the after action analyses revealing that there was no need for such haste and the negative side effects are just popping up again and again?

Seriously, we rushed the first $750 billion and hit ourselves in the faces with it, do we seriously need to reject debate and serious inquiry with this second $800 billion mega-funbding pork bill. If they fucked up the first one and we all know this one is fucked up to, why exactly should we be supporting it?

Correct. This bill needs more scepticism, not more in the way of polarising people into supporting an otherwise useless measure. The TARP made things worse, or at least had absolutely no effect. Someone show me why this is different and the Republican and Democrats involved showing concern are not to be listened to.

[Darth Wong]

It's funny how Republicans suddenly discovered the idea that tax cuts can be treated as equivalent to government spending, the moment they're out of power. To a man, all of stimulus opponents are describing the sum total as spending. Too bad they couldn't come up with this idea when their man Bush was in power.

[Admiral Valdemar]

Republicans with double standards? Surely you jest, sir.

Remember, those tax cuts only became permanent in 2k3 when they noticed people were wary of being given cash they'd only have to give back down the line. That's why stimulus on the order of handouts isn't working, but infrastructure is always there once built and the currency has gone to hell or whatever.

But hey, that's useless spending to some, despite the latest report on the US' infrastructure.