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Stark party lines being drawn on next stimulus plan |
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By Jared Allen and Jackie Kucinich
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Posted: 10/13/08 04:20 PM [ET] |
With the heavy lifting of the president’s $700 billion Wall Street rescue plan behind them, House leaders on Monday turned to the task of implementing an economic plan for the rest of the country.
But beyond saying that one was needed, and fast, Republicans and Democrats seemed to agree on little else.
Leaders in both parties unveiled their broader economic recovery proposals on Monday, both of which borrow heavily from a list of domestic policy goals that each party has touted for months.
In a letter to Speaker Nancy Pelosi (D-Calif.), House Minority Leader John Boehner (R-Ohio) outlined the GOP economic stimulus proposal, which essentially combines the House Republican American Energy Act — introduced by Republicans last summer — and many aspects of the GOP’s alternative to the $700 billion Wall Street rescue package.
In the eight-point proposal, Boehner said that energy companies should be able to obtain leases in a matter of months — rather than years — to drill for oil on the Outer Continental Shelf. He noted that would allow earlier production that would grow the economy through job creation and lower energy costs.
He also argued that a combination of suspending capital gains taxes temporarily and lowering the corporate tax rate would encourage the investment of capital in foreclosures and other distressed assets.
“Congress should do everything in its power to encourage investment to help spur growth in equities markets, and providing capital gains tax relief could help take foreclosed properties off the market and raise home values on behalf of American families,” Boehner said.
He also encouraged a further increase in the Federal Deposit Insurance Corporation insurance limit, which rose from $100,000 to $250,000 with the passage of the rescue package on Oct. 3.
“Many small and mid-size businesses easily eclipse the new $250,000 threshold to meet payroll,” Boehner said.
But Democrats appear ready to go in a wholly different direction, as evidenced by the consensus position they achieved Monday. Democrats met with a number of economists to work out a plan to pump billions of dollars directly into the pockets of poor and middle-class Americans, as well as to states and municipalities across the country.
Pelosi said it will take weeks of congressional hearings to get the package right, but at its core the Democratic stimulus plan will include much of what the House passed in September but never saw the light of day in the Senate. The $61 billion stimulus plan that passed the House with 40 Republican votes included $18.5 billion for transportation and infrastructure projects; seven weeks of additional unemployment insurance payments for the entire country, as well as an additional 13 weeks for states with high unemployment; $15 billion in additional Medicaid funding for states, and $3 billion for food stamps.
Pelosi said the eventual Democratic bill “may have to be larger than the one we passed in the House in light of the events that have transpired since we had our legislative action on the floor,” and she left the door open to significant additions, such as a second round of tax rebate checks, a plan that was left out of the last try at a stimulus plan.
Over the weekend, House Republican Whip Roy Blunt (R-Mo.) said a second stimulus package cannot be “an excuse to do what Democrats have wanted to do from Day One of this Congress, which is a huge public works plan.”
But despite assurances that Democrats — or the Congress — will not be “steamrolled into acting,” Pelosi and her caucus seem to be dug into the very proposals that Blunt said were non-starters for Republicans.
“To get our economy back to health, Congress needs to consider further legislation to create jobs and help families in need,” House Majority Leader Steny Hoyer (D-Md.) said.
“The last stimulus package that Congress passed was billed as timely, targeted and temporary,” Dr. Joseph E. Stilglitz, a former Clinton administration World Bank official and Council of Economic Advisors member, said alongside congressional Democrats. “This one needs to be timely and targeted, but I suspect we're going to have to have two or three years, if we're lucky, of increased investment in infrastructure, in people, in money so that cities and states don't lay off police and firemen and teachers, and defer infrastructure problems when the economy is already in a downturn.”
In his letter to Pelosi, Boehner said he “wholeheartedly” agreed that Congress should “take additional measures to get our economy back on track, and we should not wait until January.”
Of a lame-duck session of Congress, Pelosi said only that she would wait to see what comes out of the committee process.
And she cast a dim light on any hope for a bipartisan consensus to match that of the intra-party consensus that appears to have been reached.
“We would hope to do this in a bipartisan way, but the last time we did something in a bipartisan way it seemed it was a largely Republican package with largely Democratic votes,” Pelosi said, referring to the administration’s original Wall Street bailout plan. “If it's going to happen that way, we might as well write the bill ourselves and do the right thing for the American people.”
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