Stimulus Momentum Builds

PresidentBarack Obama has called for an economic summit at the White House onDec. 3, which could lay the groundwork for a deal on another stimulusplan. At the same time, resistance among Members to a significant neweconomic package appears to be fading.

Formost of the year, Democratic leaders put off the idea of anotherstimulus after passing the first $787 billion spending plan inFebruary. They cautioned publicly that the package needed time to workbut privately noted that Members had a severe case of stimulus andbailout fatigue.

However,the continued uptick of the unemployment rate — now at 10.2 percent —has renewed the once-taboo idea of another stimulus.

“WhileMembers are definitely concerned about spending, there also is arecognition that unemployment is over 10 percent, and Members want tobe able to say they are doing something on unemployment and jobs,” oneHouse leadership aide said.

House Democratic leaders were planning to huddle with Members on Monday night to discuss what to put in such a package.

Meanwhile,on the Senate side, Majority Leader Harry Reid (D-Nev.) has told hiscaucus that a jobs package would be a top priority early next year.

“Althoughwe believe passing health care will help our economy over the longhaul, we feel we need to do something that will provide a moreimmediate boost,” a Senate Democratic leadership aide said. “Sen. Reidwill be working with his caucus and the administration to put togethersuch a package in the coming weeks so we can turn to it as soon aspossible after completing health care.”

Membershave been quietly lining up behind various ideas for months. Oneproposal has already been signed into law — an expansion of afirst-time homebuyer tax credit, along with an unemployment benefitextension to the hardest hit states.

Butfar bolder and perhaps more expensive plans could be in the offing. Oneidea that continues to get talked about is a $500 billiontransportation reauthorization bill, which is up for renewal anyway andwould produce tangible projects and jobs that are easy for voters tosee and lawmakers to tout.

Thebill authored by House Transportation and Infrastructure Chairman JamesOberstar (D-Minn.) has been pushed hard by Majority Whip James Clyburn(D-S.C.) and Democratic Caucus Chairman John Larson (Conn.), amongothers.

“It’s not like there aren’t good jobs bills available,” a senior Democratic aide said.

Thequestion for Congressional leaders has been whether the spending insuch a plan could enter the economy quickly enough and how to pay forit. Some Democrats, led by Rep. Peter DeFazio (Ore.), are pushing for anew transaction tax on Wall Street to help rebuild Main Street,believing it would put Republicans opposing any tax increases in theposition of backing Wall Street traders over middle-class Americans.

Butthere also have been concerns that such a bill could be lampooned aspork-laden, given that it will be packed with earmarks. The lasttransportation bill, crafted when the GOP was still in charge, includedthe “Bridge to Nowhere” in Alaska that became a symbol of wastefulspending.

Leaderskept traditional earmarks out of the stimulus package earlier this yearexactly because of that fear — although that didn’t stop Republicans,who voted en masse against the plan, from blasting it as an unnecessaryspending spree.

Thenext stimulus plan could go far beyond new roads and bridges, however.Speaker Nancy Pelosi (D-Calif.), who has already held her own meetingwith economists who universally recommended additional spending, hasnoted that Appropriations Chairman David Obey (D-Wis.) has presented anarray of potential items behind the scenes. Publicly, Pelosi — who haseschewed the word stimulus — has mentioned such items as more aid tocash-strapped states and a tax credit for hiring new workers.

Obey, for his part, strongly endorsed another stimulus package Nov. 6, saying the economy needed “a bigger kick.”

“Whilethe Recovery Act is working, as I said when we passed it, it is not bigenough by itself to do everything we need it to do to get workers backto work,” he said. Obey also minimized the importance of the massiveshort-term deficit.

“The longer it takes the unemployed to get a job, the longer it will take us to get our deficit down,” he said.

HouseRepublicans, meanwhile, have used the latest chatter as another reasonto argue that the Democrats’ first stimulus was a failure. The question“Where are the jobs?” has become a rallying cry for GOP lawmakersdenouncing the first spending plan.

Republicanshave continued to push a package of several hundred billion in tax cutsthat they first proposed early this year, with Conference Chairman MikePence (Ind.) repeatedly urging Democrats to take up their plan.

ButGOP Members generally want any tax relief to be paid for by cuttingspending from the existing stimulus package, a non-starter withDemocrats.