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GSCS: DEVIL IS IN THE DETAILS......NY TIMES - 'Deal Reached in Congress on $789 Billion Stimulus Plan' (Education funding pared down, but still remains a healthy chunk) STAR LEDGER - 'Corzine says federal stimulus makes 'pain a little less terrible'
NY TIMES - February 12, 2009
Deal Reached in Congress on $789 Billion Stimulus Plan
By DAVID M. HERSZENHORN and CARL HULSE
WASHINGTON — House and Senate leaders on Wednesday struck a deal on a $789 billion economic stimulus bill after little more than 24 hours of rapid-fire negotiations with the Obama administration, clearing the way for final Congressional action later this week.
The package of spending increases and tax relief, intended to spur an economic recovery and create jobs by putting money back in the pockets of consumers and companies, ended up smaller than either the House or Senate had proposed.
Many Democrats would have preferred a larger bill, but agreed to pare back, including cuts to favored education and health programs, to win three crucial Republican votes in the Senate.
“Legislation is the art of compromise, consensus building, and that’s what we did,” the Senate majority leader, Harry Reid of Nevada, said in announcing the accord.
The House was poised for a final vote as early as Friday, with the Senate to follow, clearing the way for President Obama to sign the bill by Monday. The White House is considering a prime-time bill signing ceremony, and on Wednesday asked the television networks if they would air the event.
In a statement, the president thanked Congress for agreeing to a measure that he said would save or create 3.6 million jobs.
“I’m grateful,” Mr. Obama said, “for moving it along with the urgency that this moment demands.”
The deal reflected a calculated gamble by Mr. Obama in the first weeks of his term. To win Republican votes, the final stimulus package is considerably leaner than what many economists say is now needed to jolt the economy, given its grave condition.
But it is unclear if Mr. Obama will be able to claim credit for bringing change to Washington by winning bipartisan support for his first major piece of legislation. Not a single House Republican voted for the bill when it came to the floor two weeks ago, and despite many compromises in the Senate, only three Republicans came on board.
The final bill includes $507 billion in spending programs and $282 billion in tax relief, including a scaled-back version of Mr. Obama’s middle-class tax cut proposal, which would give credits of up to $400 for individuals and $800 for families within certain income limits. It will also provide a one-time payment of $250 to recipients of Social Security and government disability support.
House Democrats, angry over some cuts, particularly for school construction, initially balked at the deal and delayed a final meeting on Wednesday between House and Senate negotiators.
Democratic officials said Speaker Nancy Pelosi felt that Mr. Reid went too far by announcing a deal before it was vetted by her office and discussed by House members in an emergency caucus meeting, setting off the last-minute flare-up.
Ms. Pelosi said at a news conference that the delay helped House Democrats win some final concessions, including an agreement to let states use some money in a fiscal stabilization fund for school renovations. “There is no question that one of our overriding priorities in the House was a very strong commitment to school construction,” she said. “That’s still in the bill.”
But they soon relented and the meeting got under way in a packed Lyndon B. Johnson Room on the Senate side of the Capitol.
Despite the show of pique, for Democrats the stimulus bill is the most prominent display yet that they now fully control Washington. Their ability to push the package forward represented a turnabout from years of losing battles under President George W. Bush. For Republicans, it underscored the limits of their diminished ranks.
Even trimmed to $789 billion, the recovery measure will be the most expansive unleashing of the government’s fiscal firepower in the face of a recession since World War II.
And yet it seemed almost trifling compared with the $2.5 trillion rescue plan for the financial system — a combination of loans to banks and incentives to bring private capital into the banking system — announced on Tuesday by Treasury Secretary Timothy F. Geithner.
Although the final legislative language was not immediately available, lawmakers said the bill contained more than $150 billion in public works projects for transportation, energy and technology, and $87 billion to help states meet rising Medicaid costs.
Despite intense lobbying by governors around the country, the final deal slashed $25 billion from a proposed state fiscal stabilization fund, eliminated a $16 billion line item for school construction and sharply curtailed spending to provide health insurance for the unemployed.
In driving down the total cost — from $838 billion for the Senate stimulus bill and $820 billion for the House-passed measure — lawmakers also reduced the Senate’s proposed tax incentives for buyers of homes and cars, which hold big public appeal.
The final agreement retained a $70 billion tax break to spare millions of middle-income Americans from paying the alternative minimum tax in 2009. Some Democrats decried the provision as a costly addition that would not lift the economy and that Congress would have approved, regardless of the recession.
After huddling in Ms. Pelosi’s office on Tuesday until nearly midnight, top White House officials and Congressional leaders had all but ironed out the differences between the House and Senate versions of the stimulus by noon on Wednesday.
Even before the last touches were put to the bill, some angry Democrats said that Mr. Obama and Congressional leaders had been too quick to give up on Democratic priorities. “I am not happy with it,” said Senator Tom Harkin, Democrat of Iowa. “You are not looking at a happy camper. I mean they took a lot of stuff out of education. They took it out of health, school construction and they put it more into tax issues.”
Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. “It’s about 9 percent of the whole bill,” he said, “Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery.”
But even as Congressional leaders and top White House officials went through the package with a carving knife, it was clear that the three Republicans who agreed to support the bill in the Senate wielded extraordinary power, and along with conservative Democrats, had put a firm stamp on the stimulus package.
For instance, negotiators opted to keep many of the Senate’s reduced spending provisions, but they were careful to maintain an additional $6.5 billion for medical research that was inserted at the insistence of Senator Arlen Specter, Republican of Pennsylvania, who is a cancer survivor. He was one of the three Republican supporters of the recovery package.
“I think it is an important component of putting America back on its feet,” Mr. Specter said, though he added that it was still a difficult vote “in view of the large deficit and national debt.”
The Senate bill came together only after a bipartisan group of centrist senators, led by Susan Collins, Republican of Maine, and Ben Nelson, Democrat of Nebraska, reached a deal to trim the cost of the package to $838 billion from more than $920 billion.
“These aren’t easy times, obviously for America,” said Senator Olympia J. Snowe, Republican of Maine, who was also a member of that group. “Given the gravity of the circumstances economically, I thought it was important to be part of a process that could yield a consensus-based solution.”
But the majority of Republicans continued to criticize the stimulus measure on Wednesday as a bloated and ill-designed spending bonanza by Democrats on favored projects that would not help lift the economy out of recession but would permanently expand the federal government and plunge future generations of Americans deep into debt.
“Yesterday the Senate cast one of the most expensive votes in history,” said the Republican leader, Senator Mitch McConnell of Kentucky. “Americans are wondering how we’re going to pay for all this.”
Indeed, the formal House-Senate conference meeting, usually an elaborate parliamentary ritual with reams of legislative paperwork strewn across cluttered conference tables, instead served mostly as a live, televised forum for some of the most powerful Democrats and Republicans in Congress to trade barbs.
Senator Charles E. Grassley, Republican of Iowa, complained that despite Mr. Obama’s call for bipartisan cooperation, Republicans had largely been shut out. “We didn’t have a chance to negotiate,” Mr. Grassley said.
Robert Pear, Kate Phillips and Jeff Zeleny contributed reporting.
STAR LEDGER - Corzine says federal stimulus makes 'pain a little less terrible'
February 12, 2009 08:22AM
It does not contain everything New Jersey wanted, but the federal stimulus deal reached last night will help the state's residents with their economic pain, Gov. Jon Corzine said today.
"This is not bailing out the states," he said in an interview on CNBC. "I promise you. This is going to make the pain a little less terrible."
The final bill's price tag is $789 billion, a mix of tax cuts and government spending designed to pour relief into the struggling economy.
"It's not perfect--some of us might argue it should be bigger," Corzine said. But he called it "bold, timely and necessary," saying, "I'm optimistic we can stabilize the economy."
Specifics of how much New Jersey stands to receive are still scarce. It was estimated that $4.3 billion could reach the Garden State under the House of Representatives version of the plan, but several aspects affecting states were changed in the final House-Senate compromise.
Corzine cited the tax breaks on the alternative minimum tax and the "Make Work Pay" tax credit as items that will help New Jersey households. But because state revenues continue to decline, he said new cuts will likely still be necessary in the state budget he will present in March.
"This is going to be a challenge," Corzine said.
