Obama's Stimulus Plan Finds Democratic Opponents

When Barack Obama's top economic adviser went to Capitol Hill to pitch the president-elect's stimulus plan, he found much skepticism from Democrats. Lawmakers are struggling to find the right balance between tax cuts and government spending.

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MICHELE NORRIS, host:

President-elect Barack Obama's plan to revive the U.S. economy has run into some unexpected resistance from Senate Democrats. They're telling Mr. Obama's top advisers that they want to see some changes in its so-called American Recovery and Reinvestment Plan. As NPR's David Welna reports, the president-elect appears ready to revise.

DAVID WELNA: If President-elect Obama was put off by pushback from his former Senate colleagues on his economic recovery plan, you'd never know it from what he told reporters today.

(Soundbite of press conference)

President-Elect BARACK OBAMA (Democratic Senator, Illinois): Just show me. And if you can show me that's something's going to work, I will welcome it. If it works better than something I've proposed, I'll welcome it.

WELNA: Mr. Obama was responding to questions about what, by all accounts, was a lively closed-door meeting last night at the U.S. Capitol involving Senate Democrats and some top members of Team Obama. Among them was Larry Summers, who'll be Mr. Obama's top White House economic adviser. California Democratic Senator Barbara Boxer today sought to play down reports that Summers got an earful from her colleagues last night.

Senator BARBARA BOXER (Democrat, California): Please don't get the idea that there's some breakdown here. Actually, it was a wonderful meeting; it was productive. They said they came to hear our ideas. Larry Summers, one of the words he said - uttered was, I get what you mean. I'm going to go back. I hear you.

WELNA: One of the major complaints Summers heard, according to participants, was that 40 percent of what's expected to be at least an $800 billion stimulus package goes to tax breaks. That may help secure some Republican support, but it clearly annoys Iowa Democrat Tom Harkin.

Senator TOM HARKIN (Democrat, Iowa): I'm a little concerned by the way Mr. Summers and others are going on this, in that it's - to me it still looks like a little bit of - more of this trickle down, that we just put it in the top, it's just going to trickle down. A number of people in there said, look, we've got to have programs that actually create jobs and put people to work.

WELNA: Budget Committee Chairman Kent Conrad takes aim specifically at a $3,000 tax credit that Mr. Obama would give employers for each new job created.

Senator KENT CONRAD (Democrat, North Dakota; Chairman, U.S. Senate Committee on Budget): The automobile industry is not going to hire more people even if they got a jobs credit, a tax credit, if people aren't buying cars. So, we think that the better use of the money is in investment, things that are going to be spent that are going to improve the economic efficiency of our society.

WELNA: And the investment, Oregon Democrat Ron Wyden says, is most needed is in the energy sector.

Senator RON WYDEN (Democrat, Oregon): There is more interest in energy investment and the opportunity to create jobs in energy than, I think, the Obama administration has really picked up on.

YDSTIE: Iowa's Harkin says the president-elect should be using this as an opportunity to make good on what he's proposed.

Sen. HARKIN: He said he wanted to double renewable energy in three years. Well, we can do it. But we've got to start on it right now, and that ought to be a big part of the stimulus package.

YDSTIE: There is also concern among Senate Democrats that the stimulus package may not do enough to shore up the battered housing sector. New York's Chuck Schumer praised Citigroup's agreement yesterday to back legislation allowing bankruptcy judges to rewrite mortgages.

Senator CHUCK SCHUMER (Democrat, New York): And this should pave the way, hopefully, to getting this in the stimulus bill, which we have all been fighting for, and then finally finding a floor to the housing market and seeing the economy turn around.

YDSTIE: Piggybacking that bankruptcy provision onto the stimulus package, though, might also anger Republicans who've staunchly opposed the measure. Still, Mr. Obama today seemed confident his first big legislative initiative as president won't get derailed.

(Soundbite of press conference)

President-Elect OBAMA: I think that there're going to be a lot of different opinions out there. We're going to take all of them in, and at the end of the day, we're going to have a package that Congress passes and I sign.

YDSTIE: On Sunday afternoon, Mr. Obama's advisers will once again meet behind closed doors with Senate Democrats to try to iron out differences. David Welna, NPR News, the Capitol.

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