Obama turns to grassroots to sway Senate on stimulus

McClatchy NewspapersFebruary 2, 2009 

WASHINGTON — A divided and discontented Senate on Monday began debating a nearly $900 billion economic stimulus plan, while President Barack Obama launched a new grassroots campaign asking Americans to prod their lawmakers to act on it.

The Senate's legislation could look dramatically different by week's end, as lawmakers from both parties are eyeing changes in spending on infrastructure, housing aid and other features of the massive package.

The final Senate version, which could pass by week's end, must then be reconciled with the $819 billion stimulus plan that the House of Representatives passed last week.

Concerns are growing among members of both parties about the price tag and the plan's potential impact. The economy shrank 3.8 percent in the fourth quarter of 2008, its worst three-month showing in nearly 27 years, and economists see few prospects for quick improvement without massive government intervention.

Obama, looking to bring some Republican critics on board in time to have the final bill ready for his signature by mid-February, called Democratic congressional leaders to the White House on Monday for a strategy session.

In an e-mail sent by the Democratic National Committee, the president also urged voters to host or attend a neighbor's "Economic Recovery House Meeting" this coming weekend, where a videotaped message from party chairman and Virginia Gov. Tim Kaine would be played to answer questions about the stimulus spending.

"I hope to sign the recovery plan into law in the next few weeks," Obama said in the e-mail. "But I need your help to spread the word and build support."

The grassroots tactic resembles Obama's presidential campaign efforts to keep supporters across America involved and energized, and is a novel extension of computer-based campaign tactics into governance.

Ironically, Republicans, in urging more tax relief and housing assistance, said Monday that they're truer to Obama's spirit than Democrats in Congress are, while warning that most GOP lawmakers are likely to oppose the Democratic plan unless there are major changes. No GOP lawmakers voted for the House version last week.

"It appears the Democratic leadership has not gotten the memo — or the message, if you will — from the president," said Senate Republican leader Mitch McConnell of Kentucky. "We believe, Republicans, that a stimulus bill must fix the main problem first, and that's housing. That's how all of this began. We think you ought to go right at housing first."

White House spokesman Robert Gibbs urged McConnell to "look at the whole bill," calling the Senate measure "a good plan."

The nonpartisan Congressional Budget Office has estimated that 64 percent of the House stimulus plan would be pumped into the economy by Sept. 30, 2010. It hasn't yet assessed the Senate plan.

Economists disagree on the value of the Democrats' stimulus plans.

The plans "won't reverse the current economic downturn," said economist Mark Zandi, who advised Republican John McCain during last year's presidential campaign and recently testified on Capitol Hill. "It will be severe, regardless. But (the stimulus) will provide a very vital boost to the flagging economy if it's passed quickly, in the next few weeks."

However, the Urban Institute-Brookings Institution Tax Policy Center found little to praise in the tax part of the Senate plan.

It didn't give any tax provision a grade of A, which it awards for measures that would "begin quickly and go primarily to people who would most likely spend it or to businesses that would most likely use funds to retain workers or expand."

It gave B-pluses to the rebates of $500 to most taxpayers, and to an expansion of the child credit.

That sort of lukewarm expert evaluation, coupled with growing rumblings from wary constituents, could fuel a bipartisan consensus to do more about housing and infrastructure, which both are more well-suited for "stimulus" actions than some Democratic proposals are.

To quicken spending, Sens. Patty Murray, D-Wash., and Dianne Feinstein, D-Calif., are expected to push to increase funds available for public works projects.

Republicans are taking the lead on housing, proposing a one-to-two-year government guarantee for a 4 percent interest rate on 30-year loans for creditworthy borrowers. Members haven't yet worked out a definition of "creditworthy," but GOP officials suggest it would include virtually anyone with a current loan or seeking a new one who'd qualify under normal lending rules.

Also being widely discussed among Republicans is a plan to give homebuyers a tax credit of up to $15,000, or 10 percent of the cost of a home this year, whichever is lower.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., said that he's open to ideas. There's some thought that many of the housing breaks could wind up in separate housing legislation likely to be considered later this month.

In the Senate debate, Appropriations Committee Chairman Daniel Inouye, D-Hawaii, referred to lapses by Herbert Hoover, the president at the start of the Great Depression, and stressed the urgency for the bill.

"We must act boldly, decisively and with all possible speed or we will face dire consequences," Inouye said.

ON THE WEB

CBO analysis of stimulus plan

CBO analysis of economic conditions

summaries of the Senate stimulus spending and tax proposals

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McClatchy Newspapers 2009

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