Stimulus Plan Works Its Way Through Congress

President Obama and his advisers have been trying to bolster support for his $825 billion plan to stimulate the economy. That legislation is before a Senate committee and will be on the House floor this week. The recovery package faces some significant challenges from Republicans.

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RENEE MONTAGNE, host:

This is Morning Edition from NPR News. I'm Renee Montagne.

LINDA WORTHEIMER, host:

And I'm Linda Worthheimer. Steve Inskeep is on assignment. President Obama is now getting a daily economic briefing along with the usual intelligence briefing. Late last week, he said the news in those economic briefings has not been good.

(Soundbite from meeting Congressional leaders)

President BARACK OBAMA: Each day brings, I think, greater focus on the problems that we're having. Not only in terms of job loss, but also in terms of some of the instabilities in the financial system.

WORTHEIMER: Mr. Obama says it's ever more urgent that Congress pass a massive spending and tax-cut package to help stimulate the economy. That legislation is before a Senate committee, and will be on the House floor this week. NPR's Andrea Seabrook has this preview.

ANDREA SEABROOK: You've heard the expression laws are like sausages, it's better not to see them being made. Well, this bill, it's a big fat bratwurst.

(Soundbite from meeting Congressional leaders)

President OBAMA: I know that it is a heavy lift to do something as substantial as we're doing right now.

SEABROOK: President Obama, meeting with congressional leaders at the White House.

(Soundbite from meeting Congressional leaders)

President OBAMA: I recognize that there are still some differences around the table and between the administration and members of Congress about particular details on the plan.

SEABROOK: Those differences mean this sausage is not done yet, and there are a lot of cooks in the kitchen. OK, enough metaphors. Let's talk facts. As it stands right now, the bill is worth $825 billion. Its purpose is to pump money back into the economy by making more dollars available to people, businesses, and local governments.

It does this in two ways. By charging less money in taxes and by paying out big government grants. Especially for infrastructure projects that are ready to go now. Roads, bridges, electricity grids, waterways. The money for these projects is the biggest government infusion for infrastructure since the creation of the federal highway system. The bill also pushes money to hospitals for medical technology and to school districts for new buildings and renovated classrooms.

In the tax part of the measure, people who would get a break from the IRS would be middle-class families, parents, first-time homebuyers and college students. Businesses, especially small businesses, would get tax credits for hiring people and buying new equipment. And state and local governments would get federal money to establish what the bill calls recovery zones. Places targeted for economic development money based on their rate of unemployment.

The hope is that all this money will buoy the sinking economy. But before you get too comfortable with the details, consider these words from House Republican leader John Boehner, as he was leaving the White House.

(Soundbite of Interview)

Representative JOHN BOEHNER (Republican, Ohio; House Minority Leader): I think, at this point, we believe that spending nearly a trillion dollars is really more than what we ought to be putting on the backs of our kids and their kids. Because at the end of the day, this is not our money to spend, we're borrowing this money from our kids.

SEABROOK: Now politically, Republicans are in an interesting spot. The country just elected a Democratic president with a mandate for change, Republicans lost even more seats in Congressional and Senate elections. and so Democrats don't really need Republican votes to pass much of anything at this point.

But part of President Obama's idea of change has always been change in the way Washington works. Less bickering, more bi-partisanship. So in this at least, Republicans have some leverage to influence the details of this bill. And what do they want? Listen to House Minority Leader Boehner, again.

Representative BOEHNER: At the end of the day, a government can't solve this problem. The American people have to solve it. And the way they can solve it is if we allow them to keep more of the money that they earn.

SEABROOK: That's code for bigger tax-cuts, always a main push of Republicans. So this week, as the economic stimulus bill gets hammered out in Congress, watch for all different parties to try to influence the final legislation. Republicans, Democrats, House, Senate, the Obama administration. There are a lot of cooks making this sausage. Andrea Seabrook, NPR News, the Capitol.

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$825 Billion Stimulus Package Faces Obstacles

President Obama and his advisers worked through the weekend trying to convince lawmakers to support his economic stimulus plan. The president wants to see the $825 billion package on his desk by the middle of next month, but the proposal faces a rocky ride on Capitol Hill.

Continuing the Obama administration's public relations blitz touting the stimulus package on Sunday, top adviser Lawrence Summers ticked off positives about the recovery plan in an appearance on NBC's Meet the Press. First, he said, President Obama's proposal had bipartisan input from Democrats and Republicans.

"Frankly, some of them think the stimulus should be larger, some of them think the stimulus should be smaller. The president balanced different views," he said.

The $825 billion package focuses two-thirds on new government spending and the rest on tax cuts. Summers says the government can afford to spend the money to revive a faltering economy.

"It's balanced between very substantial new investments that I referred to — between very important investments to prevent teachers and cops from being laid off. And also — this is a very important part of the package — tax cuts," he said.

But tax cuts are a point of concern for both parties. House Speaker Nancy Pelosi (D-CA) told ABC's This Week that spending, historically, does more to stimulate the economy than tax cuts.

"Economists have told us from right to left there is more bang for the buck — the term they use — by investing in food stamps and unemployment insurance than in tax cuts. Nonetheless, we are committed to the tax cuts."

Republican Sen. John McCain disagrees with the Obama administration's plan to allow tax cuts for the wealthy passed under former President George W. Bush to expire, telling Fox News Sunday, "We need to make tax cuts permanent. We need to make a commitment there will be no new taxes. We need to cut payroll taxes. We need to cut business taxes."

McCain and House Republican leader John Boehner of Ohio say their party isn't likely to support the plan without major revisions. Boehner told Meet the Press he has issues with some of the spending contained in the bill.

"Two hundred million dollars to fix up the National Mall, $21 million for sod, over $200 million for contraceptives — how is this going to fix an ailing economy?"

Boehner says he cannot support the bill as it stands today.

"Right now — given the concerns we have over the size of this package and all of the spending in this package — we don't think it's going to work."

President Obama will make the case himself when he visits Capitol Hill this week.

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