GOP Wants Housing Crisis Addressed In Stimulus

Senate Republicans say they want to change the $900 billion stimulus bill, not bury it. They say they want more of the bill to deal with the problem that put the economy into a tailspin in the first place: Housing. They plan to offer amendments to push down mortgage rates and double the tax break for home buyers to $15,000.

RENEE MONTAGNE, Host:

President Obama will also be keeping track of the economic stimulus plan that is before the Senate this week. It's facing a stack of amendments. Democratic leaders are prepared to hear out the bill's critics in hopes of winning some bipartisan support. So far, the lawmakers have tossed out a tax break for movie producers and embraced tax credits for those who buy new cars. Now Republicans say they want to deal with the issue that got the economy in trouble in the first place: housing. NPR's Audie Cornish reports from the Capitol.

AUDIE CORNISH: Republicans want to make a lot of changes to the economic stimulus plan, and their arguments tend to sound something like this...

Senator MITCH MCCONNELL (Republican, Kentucky; Senate Minority Leader): The House bill is an embarrassment. The Senate bill on the floor is not markedly better. Our goal will be to pare it down and to target it right at the problem.

CORNISH: That's Senate Minority Leader Mitch McConnell, and the problem he wants to target is the housing marking. Republicans say they want to redirect billions of dollars to deal specifically with homeowners. Republican Conference Committee Chair John Ensign.

Senator JOHN ENSIGN (Republican, Nevada): Unfortunately, the housing market is barely addressed in this so-called stimulus bill. Most Americans would tell you it's the first thing that we need to heal. If we made mortgages more manageable, people can stay in their homes and our economy can begin to rebuild.

CORNISH: Now the bill does have a $7,500 tax rebate for first-time homebuyers, but Republicans say that's not enough. So Senator Ensign is introducing an amendment that would encourage banks to let people get new home mortgages, or refinance their existing ones at a federally guaranteed rate of four to 4.5 percent. Ensign says it could save millions of homeowners more than $400 a month.

Sen. ENSIGN: That makes a huge difference to most families, and it would target the problem of oversupply in the housing market, something that we cannot ignore. This is like a permanent tax cut, which economists believe is the best stimulus for our economy, not a one-year tax rebate.

CORNISH: Democrats say they're open to taking on housing in this bill. Here's Majority Leader Harry Reid of Nevada on Ensign's measure.

Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): We're willing to take a look at their amendment, see what the cost is and see what the effectiveness of it is.

CORNISH: So far, the cost is estimated to be up to $300 billion. Republican pledges to cap it there aren't making it any more palatable. Democratic Party Whip Dick Durbin of Illinois.

Senator DICK DURBIN (Democrat, Illinois; Senate Majority Whip): It appears to be something short of solving the problem, and I don't know if this is the appropriate place to do it. But we're certainly open to the notion. I hope that they'll have some concern about mortgage foreclosures, and I don't think his proposal fixes it.

CORNISH: And besides, Democrats say, they have a few ideas of their own. For instance, Senate Banking Committee Chairman Chris Dodd says he'd consider an amendment that offers troubled homeowners a 90-day moratorium on foreclosures. And Senate Budget Committee Chairman Kent Conrad wants to double that $7,500 tax credit for new home buyers and expand it to all homeowners. It's uncertain how all this will play out. But one thing's for sure: So far, the size of the bill isn't getting any smaller.

Audie Cornish, NPR News, the Capitol.

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Sen. Baucus Discusses Daschle, Stimulus

What impact does Tom Daschle's withdrawal from his nomination as secretary of Health and Human Services have on health care reform? Meanwhile, how is the economic stimulus package faring in the Senate? Democratic Sen. Max Baucus of Montana offers his insight.

ROBERT SIEGEL, host:

Joining us from Capitol Hill is Senator Max Baucus, Montana Democrat, who is chairman of the Senate Finance Committee. And who said, yesterday, that he was a little stunned by the withdrawal of Tom Daschle which he called regrettable. Senator Baucus, welcome.

Senator MAX BAUCUS (Democrat, Montana; Finance Committee Chairman): Thank you very much.

SIEGEL: How badly does the withdrawal of Tom Daschle set back the prospect of healthcare legislation?

Sen. BAUCUS: I don't think it sets it back very much at all. Tom Daschle is a terrific fellow - knows, probably, more about healthcare than most anybody else. But there's such momentum now for healthcare reform. The stars seemed so aligned, whether it's people don't have health insurance, or others health costs are so high - there's a convergence here. They get healthcare reform passed this year, and I might add on top of that - and probably even more important - is the President. Barack Obama campaigned of healthcare reform when he was a candidate. I talked with his top staff today. If anything, they're even more urgently moving towards healthcare reform. So, I think we're going to move very quickly. It's my top priority. I'm going to do what I can to get healthcare reform passed this year.

SIEGEL: Alright. Well, give us a reality test here: If there's so much momentum, when do you think we could see a real healthcare reform passed? And when might it then take effect and, actually, have an impact on people's lives?

Sen. BAUCUS: Well, I think we'll get legislation passed this year. Now, the effect of it's going to take some time, because this can take some time to get various components in place, where some of the benefits would be realized. For example, measures like health information technology will spend some upfront money, but the benefits probably won't be realized for a couple, three years later.

SIEGEL: But, in terms of extending health insurance to tens of millions of people who don't have any right now, you think there would be - within two years - do you think number will be cut in half?

Sen. BAUCUS: Well, I think two years will be a bit aggressive. To be conservative, it'd be sometime between, maybe, a year and half and three years before this is all up and going. We'll clearly move as aggressively as we can - also, we can't over-promise. If we want universal coverage as I do - and I think most do - that means doctors, hospitals, nurses, insurance companies, medical equipment manufacturers, everybody - we're all in this together. And there's going to have to be some give and take. And I'm encouraging everybody to keep an open mind.

SIEGEL: But let me put to you what our lead reporter on this story, Julie Rovner, reports, which is that bipartisanship is on the wane, in the Congress right now. She says that the new SCHIP - the children's insurance plan - is law, but a lot of Republicans resent that. They think there are give-backs that have come from - what the compromises they worked out in the last Congress. Do you have the same sense that - to patch things up right now?

Sen. BAUCUS: No, I do not have that sense. The children's health insurance program got a little partisan, because of the inclusion of legal immigrants -was different from the earlier bills. But that is, just, I think, is an aberration. I've had a lot of meetings with a lot of Republicans who very much want healthcare reform this year. I sense that this is not a partisan issue. And I'll do my best to make sure it doesn't become a partisan issue.

SIEGEL: One other front, one last question about the stimulus bill - there too. The president doesn't have 60 votes yet in the Senate, behind the bill. What is something that you think you could part with easily from the bill that came over from the House, in order to bring over perhaps a dozen Republicans? What's one element of that bill that you're willing to say goodbye to?

Sen. BAUCUS: Well, I don't mean to dodge the issue, but, frankly, about 800 billion that is so important and, frankly, the difference between 800 billion total spending over two years, compared with, say, 650 billion over two years amounts, according to the economists, amounts to about a one million difference in jobs.

SIEGEL: But can you see it coming down to a reduced package, just to get something through, and your having to accept that?

Sen. BAUCUS: It might come down slightly. But at the end of the day, I think that, by and large, the legislation that's in the Senate today is going to get passed (unintelligible) 60 votes.

SIEGEL: Senator Baucus, thanks for talking with us.

Sen. BAUCUS: Thank you.

SIEGEL: That's Max Baucus, Democrat of Montana who is chairman of the Senate Finance Committee.

Copyright © 2009 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.

Buy-American Stimulus Provision Sparks Debate

President Obama i

President Obama has a mixed track record on trade. Alex Wong/Getty Images hide caption

itoggle caption Alex Wong/Getty Images
President Obama

President Obama has a mixed track record on trade.

Alex Wong/Getty Images

Planet Money

The Senate has opened debate on the massive economic stimulus bill. And President Obama is urging lawmakers to avoid "partisan gridlock," as they weigh hundreds of billions of dollars in tax cuts and new government spending.

One portion of the bill would require the government to use American-made steel and other supplies in all those new bridges and roads it wants to build. This "Buy American" provision has drawn criticism from foreign governments and some businesses.

It also poses an early test for President Obama, who walked a fine line on trade issues during the campaign.

Supporters Want Money For Jobs

Backers of the Buy American provision make a simple argument: "If we're going to try to create American jobs, we need to direct stimulus money to American firms," says Scott Paul, executive director of the Alliance for American Manufacturing.

The House version of the bill would do just that — requiring that iron and steel used in public works projects come from American suppliers. The Senate bill would go further, extending the Buy American requirement to all manufactured goods used in infrastructure projects. Paul, whose group represents unionized steelworkers and manufacturers, thinks it's a good idea.

"When we're investing hundreds of billions of dollars, tax dollars, into infrastructure, into economic recovery, we want to make sure we're creating jobs in the United States and not in China," he says.

But to critics, the Buy American requirement sounds suspiciously like the first step down a protectionist path that the U.S. and other countries followed on their way to the Great Depression.

"Anyone? Anyone?"

Actor and economic commentator Ben Stein riffed off this history in the movie Ferris Bueller's Day Off:

"The Hawley Smoot Tariff Act ... did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression."

It's not just fans of the movie who might think protectionist moves can backfire. The U.S. touched off a trade war in the 1930s when it raised import duties on thousands of foreign goods.

Diplomats Warn Of Retaliation

Supporters say the Buy American provisions are a far cry from those punitive tariffs, and they note federal public works projects have long given some preference to American-made supplies. Still, diplomats from Canada and the European Union are warning of possible retaliation if Congress follows through with the requirement. And that has some big U.S. companies worried about losing business overseas.

"This sends absolutely the worst signal at a sensitive time for the global economy," says John Murphy, vice president of the U.S. Chamber of Commerce. Murphy wants Obama to weigh in against the Buy American provision. So far, though, the White House has refused to be pinned down.

"The administration is reviewing that provision," spokesman Robert Gibbs said last week, in response to repeated questions. "Let us undertake that review. And when we have something to announce as it relates to that review, I will be able to answer any number of your questions related to a review that has not yet currently been done."

Obama's Record On Trade

Obama has a mixed track record on trade. During the primary campaign, he called for renegotiating the North American Free Trade Agreement. But he later appeared to soften his stance. And many of his economic advisers have strong free-trade credentials.

Yale University political scientist Kenneth Scheve says many Americans have grown skeptical that free trade is working for them. He adds that pressure for protectionism typically mounts during economic downturns — even if measures like Buy American turn out to be short-sighted.

"I do not think the economic advisers in the administration are going to be supporters of it. The question is whether the political logic sort of overrides those concerns," Scheve says.

He suggests Americans might be more willing to go along with their government buying imported steel and other materials if the other elements of the stimulus plan are successful in reviving the economy.

In network interviews Tuesday, Obama said he would "work on" the language of the Buy American provision. Obama says the U.S. should not send a protectionist message or do anything that might touch off a trade war.

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