Stimulus is close and yet so far

By James Oliphant

Feb. 11, 2009 12 AM PT

WASHINGTON —

With the Senate’s approval Tuesday of a massive, $838-billion economic stimulus package, congressional negotiators launched into a high-risk race to come up with a compromise bill that could be delivered to the White House by the end of the week.

It will be anything but easy. There are significant differences in the bill the Senate passed Tuesday and the one the House approved last month, not the least of which are the price tags. The House version is $819 billion.

Beyond that, there is a clash in approaches. The Senate bill places more emphasis on tax cuts to jump-start the economy, whereas the House bill relies on more government spending in an effort to create more jobs.

Once a final deal is struck, the bill has to pass both houses of Congress again. That means that the legislation must satisfy a variety of voting blocs: the moderate Republicans in the Senate who broke with the party to ensure the bill’s passage, the conservative Democrats in the House who may favor elements of the Senate bill, and more liberal members of the House who don’t want to see the bill’s commitments to funding for state budgets and education sacrificed.

And, of course, the White House will be weighing in as well.

President Obama journeyed to foreclosure-ravaged southwest Florida on Tuesday for a campaign-style economic “town hall,” pressuring Congress to act quickly to produce a final bill.

“We’ve had a good debate, but the time for talking is over,” the president said. “Folks here in Fort Myers and across America need help, and the time for action is now. The Americans I’ve met understand that even with this plan, our recovery will likely be measured in years, not weeks or months -- but what they don’t have patience for is more waiting on folks in Washington to get this done.”

The congressional negotiators will be engaged in a tricky balancing act. A tilt toward one group risks losing support from another.

But there is one overriding trump card to be played as talks go forward. The three Republicans who were crucial in pushing the bill through the Senate -- as well as some moderate Democrats -- say they are prepared to walk away from the package this week if it’s materially altered, or if it grows in spending.

Their threats were serious enough for Senate Majority Leader Harry Reid (D-Nev.) to meet with a group of centrists in his office Tuesday after the Senate passed its version of the bill by a 61-37 vote. Reid said the three Republicans, Sens. Susan Collins and Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania, would be working with Democrats during the negotiations “all the time.”

Collins suggested the centrist Republicans and Democrats were working together, saying that “there are a number of the more moderate Democrats who are also very concerned about the possibility of the House trying to reinsert a lot of excessive spending or the package itself becoming large.”

Specter, interviewed by MSNBC later in the day, said he would not back the final bill if it costs more than $780 billion, the amount that Senate moderates agreed upon late last week before some additional amendments swelled the bill back over $800 billion.

And a Democrat, Sen. Ben Nelson of Nebraska, who was instrumental in brokering the compromise that led to the three Republicans’ defection, warned that his support, too, was tenuous. “Everybody understands that Sen. Collins says if this comes back materially altered as to the top line number or to the pieces within the package, that she plans to vote against it. And you can put me in that category too,” Nelson said.

The Senate will need 60 votes to avoid a filibuster that could stall a compromise bill, which gives Collins and the other centrists maximum leverage. Reid said he hoped negotiators could have a “first cut” of the bill in 24 hours.

House Speaker Nancy Pelosi (D-San Francisco) said Tuesday that the House bill does more in terms of job creation.

“Our bill produces more jobs,” she said. “We will go to conference to fight for those jobs.” She sounded less confident that significant progress could be made quickly.

Monday night, an alliance called the New Democrats, which makes up the largest bloc of moderates in the House, sent a letter to Pelosi saying that there were several aspects of the Senate bill it favored over the House version, including provisions relating to broadband Internet technology and healthcare. The group is led by Reps. Ellen O. Tauscher of Alamo, Calif., and Melissa Bean of Illinois.

Meanwhile, liberal Democrats in the House also pressed their case. Rep. George Miller (D-Martinez), chairman of the House Education Committee, said Tuesday that money set aside in the House bill for school construction and modernization but deleted from the Senate bill needed to be included in the final product. Miller said the provision would create 315,000 jobs nationwide.

He may have some assistance in that effort from the White House.

Obama and his economic team have talked about the importance of school modernization to the overall economic package.

There may be some room for House Democrats to add some spending provisions if the Senate were to agree to drop a $70-billion break for alternative minimum tax payers that is not in the House bill.

But more controversial items, such as increased aid to state and local governments and Medicaid reimbursement to the states, both of which were reduced in the Senate bill, have the potential for derailing the entire agreement. Nelson on Monday called efforts to restore those funds a “nonstarter.”

joliphant@tribune.com

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Tale of two plans

The two stimulus bills now move to a House-Senate conference, where differences between the plans will be ironed out. In general, the House plan has more spending, and the Senate plan more tax cuts. Key differences:

Spending

State aid

Senate: $39 billion in education aid to states.

House: $54 billion in education aid, plus a $25-billion block grant for states to use on other programs.

Direct aid to individuals

Senate: $17 billion for one-time $300 payments to Social Security recipients, poor people on Supplemental Security Income and veterans receiving disability or pensions.

House: $4 billion to provide a one-time additional Supplemental Security Income payment to poor, elderly and disabled people of $450 for individuals and $630 for married couples.

School construction

Senate: Not in plan

House: $19.5 billion to build and repair school and university facilities.

Tax breaks

Alternative minimum tax

Senate: $70 billion to protect more than 20 million taxpayers from a 2009 tax increase averaging about $2,000.

House: Not in plan.

Home-buyer tax credit

Senate: $35.5 billion for a $15,000 tax credit for purchasers of homes bought in the year after the bill takes effect.

House: $2.6 billion for a $7,500 credit to first-time home buyers for homes purchased from

Jan. 1 to July 1, 2009, and phases out the credit for couples making more than $150,000.

Auto buyer tax deduction