Obama enters decisive week on economy
With the Obama administration facing a make-or-break week to enact a massive economic stimulus package, officials ramped up pressure on lawmakers Sunday to waste no time sending the bill to the president for his signature.
President Obama plans to hit the road to sell the package directly to the American public. He’ll spend today in Indiana and Tuesday in Florida, talking with communities that have been hard hit by the recession. And tonight, in Washington, he’ll hold his first prime-time news conference, with the economy likely to be Topic A.
The White House wants the president’s stimulus message transmitted without distraction -- so much so that it has delayed the planned rollout of the Treasury Department’s revised formula for rescuing the nation’s financial sector from today until Tuesday.
“There’s a desire to keep the focus right now on the economic recovery program,” Obama’s top economic advisor, Lawrence H. Summers, said Sunday on ABC’s “This Week.” “We’re in a very serious situation. This is worse than at any time since the Second World War.”
Summers, chairman of the White House National Economic Council, also appeared on “Fox News Sunday.”
His comments came as the Senate prepares to approve an $827-billion version of the economic stimulus package Tuesday -- one that is markedly different from the $819-billion bill that passed the House last month. House and Senate leaders will meet this week to reconcile the two versions with hopes of delivering the bill to the White House before President’s Day, when Congress is scheduled to take a weeklong recess.
The Senate plan features about $100 billion more in tax cuts and less spending on aid to states and on education. Summers said there was 90% overlap between the two -- and that “we’ve got to get to closure on the last 10%.”
But negotiating a final version of the massive, 800-page bill won’t be easy. House Speaker Nancy Pelosi (D-San Francisco) last week called the Senate’s changes to the measure “very damaging.” And Summers said Sunday that some parts of the House bill “are very, very important to the president,” citing money for higher education in particular.
But the closer the final package veers toward the House version, the less likely it is to receive support from the three Republican moderates -- Sens. Susan Collins and Olympia J. Snowe of Maine, and Arlen Specter of Pennsylvania -- who were integral in brokering the Senate deal. All three have made no commitment to support the bill that will emerge from the House-Senate conference committee.
Democrats hold 56 Senate seats, and the chamber’s two independents caucus with them. That’s only 58 votes; 60 are required to prevent a filibuster. So the support of at least two Republicans is crucial.
Obama appears intent on increasing the pressure on those Republicans and on hesitant Democrats to get behind the plan. Today, he will travel to Elkhart, Ind., where he will hold a campaign-style town hall about the economy. He’ll do the same in Fort Myers, Fla., on Tuesday. Both cities have been hammered by the recession. Unemployment in Elkhart jumped to 15.3% from 4.7% in the last year. The jobless rate in foreclosure-plagued Fort Myers has reached 10%.
As of now, the overwhelming majority of congressional Republicans remains deeply critical of the package, complaining that it’s too expensive and contains too little in the way of tax cuts. “We are going to amass the largest debt in the history of this country, and we are going to ask our kids and grandkids to pay for it,” said Sen. John McCain (R-Ariz.).
Appearing on CBS’ “Face the Nation” on Sunday, the former presidential candidate called the stimulus bill “generational theft.”
Other Republicans, such as Senate Minority Leader Mitch McConnell of Kentucky this weekend, compared the stimulus bill to President Franklin D. Roosevelt’s federal spending programs during the Great Depression, saying “the New Deal did not work.”
That prompted a pointed response from Summers on “This Week”: “Those who presided over the last eight years, the eight years that brought us to the point where we inherit trillions of dollars of deficit, an economy that’s collapsing more rapidly than at any time in the last 50 years, don’t seem to me in a strong position to lecture about the lessons of history,” he said.
Summers emphasized that passage of the stimulus needed to be paired with the Treasury Department’s revised Troubled Asset Relief Program to effectively aid the economy.
Treasury Secretary Timothy F. Geithner will outline Tuesday how the Obama administration plans to spend the second half of the $700 billion earmarked last fall to bail out the financial sector. Members of Congress and the public have complained that the first $350 billion was spent without transparency and went to banks that did not in turn help struggling homeowners.
Administration officials would not confirm specifics in the plan Sunday, but it is expected to include $50 billion to help homeowners avoid foreclosure. It is also expected to inject more capital into ailing banks and to insure banks against losses from toxic mortgage-backed securities. The plan may also include some government-backed incentives to encourage the private sector to purchase some of those troubled assets.
Summers said on “Fox News Sunday” that utilizing private capital to help clean the assets off the books of distressed banks was preferable than using federal money alone to do so.
“With the right strategic approaches, Secretary Geithner believes that we can bring in substantial private capital, and . . . that’s a better route to solving this problem than government resources,” Summers said.