Despite the election, stimulus talks still hinge on GOP

McClatchy NewspapersFebruary 10, 2009 

WASHINGTON — Congressional negotiators plan to engage in tough, hard-to-predict talks Wednesday aimed at resolving differences over education funding, tax cuts and other flash points as they try to craft a compromise version of the economic stimulus package.

Lawmakers began meeting within hours of the Senate's 61-37 vote Tuesday to approve an $838 billion stimulus plan, as three Northeastern Republicans joined 56 Democrats and two independents to form a majority. Under Senate rules, 60 votes were needed.

That means the three Republican mavericks — Maine's Olympia Snowe and Susan Collins and Pennsylvania's Arlen Specter — are vital to reaching any compromise. Their votes on final passage of any compromise are seen as fragile but crucial, since Democrats control 58 Senate seats and need 60 to cut off debate and to pass any measure that expands the federal deficit.

The House of Representatives passed an $819 billion version two weeks ago, and the houses now must forge one bill.

Lawmakers offered conflicting signals about prospects for quick compromise. The optimistic view is that negotiators should produce legislation by late Thursday.

Here's the case for that: Strong Democratic majorities control both houses and want to give their popular president a quick victory. They agree on most key provisions: effective $500 tax rebates for most consumers, billions to rebuild roads and bridges, about $87 billion to help states provide health care for poor people and those with disabilities and a 20- to 33-week extension of unemployment benefits.

Even a controversial Senate provision — a $70 billion fix to the alternative minimum tax for many relatively well-off people — is unlikely to meet much House resistance. "I would doubt it's going to come out," said House Majority Leader Steny Hoyer, D-Md.

Other encouraging signs: Senate Majority Leader Harry Reid, D-Nev., predicted that by Wednesday afternoon, "we expect to have something done . . . that will at least head us in the right direction."

President Barack Obama has been promoting quick passage. He met with Democratic congressional leaders Tuesday before traveling to Fort Myers, Fla., to court public support and dramatize the need for emergency help.

The White House also has shown that it isn't shy about pressuring lawmakers. When the Senate was deadlocked last week, White House Chief of Staff Rahm Emanuel went to the Capitol to help broker the final deal.

There's also a gloomier possibility, however.

Some see fundamental differences between the houses, notably on education spending and taxes.

"Usually you go to conference and split the difference between the two houses," said House Speaker Nancy Pelosi, D-Calif. "That may not be the case here."

The House bill includes a $79 billion State Fiscal Stabilization Fund to help states with education expenses and another $20 billion for school construction. The Senate approved a $39 billion stabilization fund and no school-construction money. Both say they're not budging on those terms.

Education advocates got a boost Monday from Obama. Talking about the Senate cuts to an Indiana audience, the president said: "I would like to see some of this restored."

However, the Senate bill passed only after moderate Democrats and Republicans forced other Democrats to accept about $110 billion in cuts, notably the education reductions. If House negotiators insist on restoring much of that, the three moderate Republican senators may balk, and they hold the margin of power in the 61-vote Senate majority forged behind the stimulus.

All three Republican mavericks are talking tough.

Collins made it clear to the White House that if the bill ends up with, as she put it, "a lot of the unnecessary expenditures crammed back in it" and less tax relief, "the Democrats will lose my vote."

Sen. Ben Nelson, D-Neb., a leader of the moderates, warned Tuesday that he wasn't eager to see the negotiators impose changes. "Any material change in the Senate bill threatens its ultimate passage," he said.

The moderates also will be reluctant to discard two tax breaks that are in the Senate version but not the House's: a $15,000 tax credit, or 10 percent of the purchase price, whichever is less, for any homebuyer, and a tax break for new car purchasers.

"It's vital," Snowe said, "that tax relief is not abandoned at the expense of additional spending."

Since Republicans control only 178 of the House's 435 seats and 41 of the 100 Senate seats, they're likely to have little say in the compromise.

However, as Senate Republican leader Mitch McConnell of Kentucky pointed out, "there are 219 Republicans in Congress and only three found the bill acceptable."

If those three don't like the final version, they could sink it in the Senate.

Members of both parties have escalated their partisan rhetoric. Obama complained last week that Republican initiatives too often are "rooted in the idea that tax cuts alone can solve all our problems, that government doesn't have a role to play, that half-measures and tinkering are somehow enough, that we can afford to ignore our most fundamental economic challenges "

Most Republicans, on the other hand, have become emboldened and united in their opposition, dismissing the stimulus bills as loaded with spending that would do little to spur the economy.

Sen. Kay Bailey Hutchison, R-Texas, noted that the Senate bill costs "$1 billion per page."

Republicans say the measure is loaded with unnecessary spending, such as $200 million to consolidate the Department of Homeland Security in Washington, $100 million for grants to small shipyards and about $1 billion to improve parks.

"In every version of the stimulus we've seen, wasteful spending has attracted the most attention," McConnell said. "But even more worrisome to many is the permanent expansion of government programs."

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