Leaders, Bush to Discuss Stimulus Today

Posted April 8, 2008 at 6:40pm

Bipartisan House and Senate leaders will meet at the White House this afternoon to discuss a new economic stimulus package — although without the sense of goodwill that prompted swift approval of the first stimulus measure earlier this year.

Speaker Nancy Pelosi (Calif.) took aim at President Bush’s apparent reluctance to embrace a second stimulus package in a statement Tuesday, citing a litany of statistics on mortgages, food staples, gasoline and job losses.

“The past few months have seen the crisis deepen — including job losses and rising unemployment — and the chairman of the Federal Reserve is warning we are slipping into recession. It’s time now for a second stimulus and relief package,” she said.

But so far House Republicans are drawing the line on housing and resisting Democratic calls for a second broad stimulus measure, with the GOP leadership arguing that the economy is not yet bad enough to warrant an extension of unemployment benefits.

“I think we ought to give Stimulus I a chance to work before we get to Stimulus II,” said House Minority Whip Roy Blunt (Mo.).

Bush administration spokeswoman Dana Perino similarly dismissed any extension of unemployment benefits and expressed the White House’s lack of interest in a second stimulus package before tax rebates from the initial package have been mailed out.

“One of the most important things that we all agreed on when we did the first stimulus plan — which hasn’t even been able to go into effect yet, but will start the 1st of May — is that elements of it should be stimulative. And I think that’s going to be a test for anything that we do in the future,” Perino said.

Even before today’s White House meeting, House lawmakers began jockeying for a stake in a new stimulus package, particularly looking to revive items dropped from the initial stimulus bill, including unemployment insurance, food stamps and home energy assistance for the poor, as well as funds for infrastructure. Senate Democratic leaders are eyeing the next Iraq War supplemental as a vehicle for carrying some of those items (see related story, p. 1).

A spokesman for Transportation and Infrastructure Chairman James Oberstar said the Minnesotan has received assurances from the Speaker that an infrastructure boost will be included in the measure, although it remains to be seen how big a slice of the pie it will receive.

“Oberstar has spoken to the Speaker several times and has addressed the Caucus several times on the need for infrastructure to be a major part of the stimulus package,” spokesman Jim Berard said.

According to Democratic aides, House leadership has yet to decide whether to combine any new stimulus measure with an existing proposal addressing housing and the mortgage industry, or whether that issue should stand alone.

In the meantime, Ways and Means Chairman Charlie Rangel (N.Y.) unveiled a housing tax proposal Tuesday that would give some first-time homebuyers a $7,500 tax credit that would have to be paid back to the government over 15 years, $10 billion in new federal mortgage bonds and other more modest provisions paid for largely by new accounting rules.

The committee also released a report making the case for an extension of unemployment benefits, with Rangel noting the loss of 80,000 jobs in March.

House Republicans, meanwhile, signaled their support Tuesday for moving forward with a housing package and called on Democrats to work in a bipartisan fashion.

Minority Leader John Boehner (Ohio) made clear that the response should stop short of a “bailout” and instead focus on incentives to get Americans to buy houses.

“We must work to help the innocent victims of the housing crisis, without providing a taxpayer-funded bailout to speculators, scam artists or recklessly irresponsible borrowers,” Boehner said.

House Democratic Caucus Chairman Rahm Emanuel (Ill.) took a swipe at the new GOP list of principles:

“Actions speak louder than lists. First, Republicans said the housing crisis was a gnat Democrats were hitting with a sledgehammer. Then Republicans failed to recognize that the housing crisis was a problem worth discussing during the recess. We are in the middle of a crisis that Alan Greenspan has called the ‘most wrenching in the last half century.’ We hope Republicans will do more than come up with lists. We hope Republicans will work with us to help solve the housing crisis and pass a second stimulus package that will give relief to families who are struggling.”

But Democrats could face potential opposition within their own ranks as the fiscally conservative Blue Dog Coalition has already raised concerns that the new stimulus measure will not be subject to pay-as-you-go budget rules, which require any new spending to be offset with tax increases or decreases from elsewhere in the budget.

House leaders waived PAYGO rules earlier this year for the initial stimulus package, labeling the measure an economic “emergency.”

“The stimulus package was to try to jump start the economy. We recognized the need for waiving PAYGO in times of emergency. … But now there’s talk of a second stimulus package,” said Rep. Mike Ross (D-Ark.), the Blue Dog’s communications chairman. “I’m sure there will be other stimulus packages, and simply borrowing the money from China to stimulate our economy is not sound fiscal policy.”

The Blue Dogs issued a letter Friday to both House and Senate Budget committee chairmen and ranking members, urging the fiscal 2009 budget obey PAYGO rules.

“One of the reasons that we’re in a recession, or headed for one, is that we’ve got the largest debt ever in our nation’s history. … It doesn’t make sense to pass yet another economic stimulus bill with borrowed money when we can pay for it, not with tax increases but going after hedge fund managers and their off-shore accounts,” Ross said.

Ross, who spoke via telephone from his Arkansas district, said he prefers the second stimulus package not be rolled into the expected supplemental war spending bill.

“I would hope any stimulus package would be a stand-alone bill, only time will tell,” Ross said.

Liberal Democratic Caucus members have raised similar concerns about the stimulus package, asserting that combining the domestic measure with new war spending would effectively constitute a blackmail effort to win support for Iraq funding.

Republicans have also vowed to oppose the supplemental spending bill should it contain domestic spending items.

“Republicans in the House are going to be very strong, and I believe in the Senate as well, about keeping this supplemental clean,” said Blunt, pointing to signals that Democrats will try to use the bill as a vehicle for additional domestic spending.

Lauren W. Whittington contributed to this report.