By Brian Faler
Jan. 29 (Bloomberg) -- The U.S. House passed President Barack Obama’s $819 billion stimulus package without any Republican votes as lawmakers remained divided over whether the plan would do enough to pull the economy out of recession.
The 244 to 188 vote yesterday sends the measure to the Senate, where Republicans will have more power to demand changes. They are calling for more tax cuts, less spending and a bigger focus on housing in the measure. The chamber is likely to begin work on the plan on Feb. 2. The stimulus measure is separate from the administration’s plan to shore up the banking system, which may cost in excess of $1 trillion.
Obama yesterday urged lawmakers to work out their differences in the next few weeks, saying delay in passing a final bill would cost more people their jobs. “The plan now moves to the Senate and I hope we can continue to strengthen this plan before it gets to my desk,” he said in a statement after the House vote.
In comments to reporters, he said, “The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that their job will be next on the cutting blocks, they need help now. They are looking to Washington for action.”
Obama had traveled to Capitol Hill earlier this week to personally lobby for Republican support for the stimulus bill, an effort that included a private session with the party’s House members. He failed to win any converts. In yesterday’s vote, all of the 244 “yes” votes came from Democrats. Voting “no” were 177 Republicans and 11 Democrats.
Cocktail Party
Obama hosted a cocktail party for Democratic and Republican congressional leaders at the Blue Room in the White House last night after the vote. House Minority Leader John Boehner, an Ohio Republican, told Obama that he shouldn’t take the House vote as a rebuke to his outreach effort, according to a Democratic aide with knowledge of the conversation. The aide spoke on condition of anonymity.
The stimulus package, equivalent to one-quarter of the entire federal budget, is aimed at resuscitating an economy that lost 2.6 million jobs last year. The House plan would provide a $500 payroll tax cut for individuals along with $604 billion for infrastructure projects, jobless benefits, education programs, aid to struggling state governments and scores of other initiatives.
The plan grew slightly from $816 billion during House debate on it yesterday when lawmakers approved an amendment budgeting an additional $3 billion for transit projects.
Senate Version
The Senate version of the stimulus bill already differs from the House plan. The Senate Finance Committee voted this week to add a $70 billion alternative-minimum tax cut to the package.
Lawmakers in the two chambers also differ over how much to spend on highway projects, renewable-energy tax breaks and expanding access to broadband.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, said the House plan doesn’t include enough tax cuts and that many of them that are in the bill would go to those who don’t pay federal income taxes. He said Republicans want to add provisions aimed at fighting the housing crisis by having the federal government back fixed-rate 4 percent mortgages.
“It’s clear that we need to go directly at the housing problem,” McConnell said. “Republicans have a proposal for lower-interest rate mortgages that we think would help ease the problems that started the economic downturn.”
Republican Complaints
In the House, Republicans complained they were given little chance to offer revisions to the plan’s provisions. They also said they doubted the stimulus plan would work.
“Do not, for one minute, believe that this bill reflects the input of House Republicans,” said Representative Jerry Lewis of California, the top Republican on the House Appropriations Committee. The measure is “less about creating jobs and stimulating the economy and more about spending the public’s money.”
House Speaker Nancy Pelosi, a California Democrat, dismissed such complaints, saying Republicans were given plenty of opportunities to offer amendments. “Some of the initiatives they have put forth are really the same policies that got us into this terrible economic crisis,” she said. “We will not -- we will not -- be stuck in the past.”
House Democrats made some concessions to Republicans, dropping provisions easing access to contraceptives for Medicaid recipients and deleting money to refurbish the national Mall in Washington that critics said had little to do with revitalizing the economy.
Arts Funding
Democrats held firm on a provision criticized by Republicans that would give the National Endowment for the Arts additional funding.
“People in the arts field are losing their jobs just like anybody else; you have local arts agencies, you have local orchestras, local symphonies, local arts groups of all kinds that are shutting down,” said House Appropriations Committee Chairman David Obey, a Wisconsin Democrat.
The nonpartisan Congressional Budget Office estimated this week that by the end of 2010, the House bill would pump into the economy about $526 billion, slightly less than two-thirds of the package.
The agency said the plan would provide a “substantial” boost to the economy, estimating it will increase the U.S. gross domestic product by 1.2 percent to 3.5 percent by the fourth quarter of 2010 and create between 1.2 million and 3.6 million jobs.
Tax Credits
The bill would expand tax credits for the working poor, make more families eligible for a child tax credit and expand college tuition subsidies. It would let businesses convert losses into tax refunds and provide faster write-offs for purchasing equipment.
Other provisions would provide $40 billion to extend health-care coverage to the jobless, $20 billion for school repairs, $30 billion for highway infrastructure projects, $20 billion for food stamps, $18 billion for Pell college tuition grants and $18.5 billion for energy efficiency and renewable energy programs.
Republicans complained the plan included items unrelated to boosting the economy, including $1 billion for the 2010 census and $400 million to study global warming.
Other provisions would require that the iron and steel used in construction projects funded by the bill be produced in the U.S. unless the material proved unavailable or prohibitively expensive.
The bill is H.R. 1.
To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net
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