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ThaddeusStevens
Guest
Conflicting Interests Present Hurdles to Stimulus Package
By Jonathan Weisman and Jeffrey H. Birnbaum
The Washington Post
Thursday 17 January 2008
A rush by President Bush and Democratic leaders to assemble an economic stimulus
package to stave off a recession is being complicated by a potentially debilitating brew of
presidential politics, ideological differences and special interest lobbying.
Already, a bidding war among the top three Democratic candidates is complicating
congressional efforts to produce a package that would not worsen the budget deficit.
Republican contenders and GOP leaders are warning the White House not to compromise too much
with Democrats on an economic stimulus they are not even sure is warranted.
Meanwhile, lobbying groups for industries as varied as high technology and hotels are
clogging the reception rooms and e-mail inboxes of senior lawmakers, pressuring them to
include the groups' favorite benefits in a stimulus package. Small businesses are seeking to
write off new equipment faster. Large businesses are appealing for lower tax rates. And home
builders are pleading to offset their taxable income in years past with the losses they are
suffering today.
"This package is not going to be all things to all people," House Speaker Nancy Pelosi
(D-Calif.) said yesterday, firing a warning shot to Republicans and Democrats alike while
promising a proposal within two weeks. "It is not going to be a panacea."
The debate has highlighted the gulf separating the Democratic and Republican parties on
economic policy, even as K Street stokes the engine on what House Ways and Means Committee
Chairman Charles B. Rangel (D-N.Y.) fears could be a runaway train. Democrats from Capitol
Hill to the campaign trail are ready to spend as much as $100 billion in the coming months
on tax rebates, housing assistance, unemployment benefit extensions and aid to cash-strapped
states to counter a recession that they worry may already have begun.
"The discussion of economic stimulus is no longer an academic exercise," Sen. Charles
E. Schumer (D-N.Y.), chairman of the Joint Economic Committee, said at hearings yesterday.
"In fact, real economic stimulus measures, enacted quickly, could be the last thing between
us and a deep or protracted recession."
Republicans are not so sure. Sen. John McCain (Ariz.), at a Republican presidential
debate last week, objected to recession talk, saying the economy is merely entering a rough
patch. House Republican conservatives yesterday outlined a wish list that was sharply at
odds with that of the Democrats: a steep cut in the corporate income tax rate, big tax
breaks for business investment and a more generous tax write-off for business losses.
Most Republican presidential candidates are far more amenable to long-term changes in
the tax code and spending that would address underlying drags on the economy rather than
short-term, one-time fixes. And GOP leaders in Congress are concerned that Democrats would
try to offset the cost of any stimulus package with future tax increases or loophole closures.
"It is incumbent upon Congress not to make matters worse by raising taxes on anyone, in
any way," House Republican leaders said Tuesday in a letter to their Democratic counterparts.
But Kevin A. Hassett, an American Enterprise Institute economist advising McCain, said
he is resigned to a compromise between Bush and Democratic leaders that conservatives are
bound to dislike.
On K Street, the lobbying community sees potentially lucrative possibilities in an
election year that otherwise might produce little legislation. Some requests are relatively
modest: The National Federation of Independent Business is calling for Congress to make it
easier for home-based businesses to write off their offices. But most are substantial: The
R&D Credit Coalition is seeking an extension of a multibillion-dollar tax break for
corporate research. And the Travel Industry Association wants Congress to cough up tens of
millions of dollars to help fund advertising abroad to lure foreign tourists and create jobs
at restaurants and hotels.
At the tax-writing Senate Finance Committee, one staffer has been charged with trying
to keep track of the lobbyist appeals. So far, the list exceeds two dozen significant ideas,
and it grows daily. The proposed beneficiaries, besides taxpayers, include real estate
agents, physicians, automakers, pension funds, manufacturers, pipelines, insurers, and
corporations small and large.
"There are a lot of interests that have made the case for one provision or another,"
said Rep. Jim McCrery (La.), the top Republican on the Ways and Means Committee. The volume
of requests has not yet overwhelmed him, he said, but only because "I have lots of staff."
Democratic White House hopefuls are exerting their own pressure. Former senator John
Edwards (N.C.) kicked off the bidding Dec. 22 with a $25 billion proposal of clean-energy
projects, unemployment insurance extensions, aid to state governments and housing assistance.
On Jan. 11, Sen. Hillary Rodham Clinton (N.Y.) upped the ante with a $70 billion
stimulus plan that includes a $30 billion housing crisis fund, $25 billion in emergency
energy assistance to poor families, $10 billion to extend and broaden unemployment insurance
benefits, and $5 billion in energy-efficiency and alternative-energy spending. She would
also impose a 90-day moratorium on subprime mortgage foreclosures and freeze interest rates
on subprime mortgages.
Two days later, Sen. Barack Obama (Ill.) laid out a $75 billion plan, including $45
billion in individual $250 tax rebates and Social Security supplements that would be mailed
quickly to as many as 95 percent of U.S. workers. Those rebates could be doubled if the
first injection did not do the trick.
Against the wishes of many Democrats on Capitol Hill, the presidential contenders made
no effort to offset the cost of their proposals with tax increases, loophole closures or
spending cuts.
"I think the most crucial tests for a stimulus package meeting our fiscal
responsibility principles should be, is it fast acting, does it have high bang for the buck,
and is it temporary?" said Gene Sperling, a Clinton economic adviser.
The presidential candidates' proposals have put Democratic congressional leaders in a
difficult position. Their final plan could bolster one candidate over another, depending on
its shape. Asked whether they were being influenced by the competing plans, House Democratic
leaders stood in awkward silence yesterday before Majority Leader Steny Hoyer (D-Md.)
quipped, "When they become president, we'll work with them."
Rather than guiding the debate on Capitol Hill, the candidates' packages have
immediately become fodder for argument. Austan Goolsbee, a University of Chicago economist
and Obama economic adviser, scoffed at much of the Clinton plan, saying the complexity of
the proposals would delay their impact until it is too late to make a difference. By the
time poor families realized they were eligible for Clinton's $25 billion in low-income
heating assistance and fill out the five-to-10-page application, winter would be over, he said.
Underscoring Clinton's contention that she has the experience to address such problems,
Sperling said much of the plan grew out of lessons learned in 1993, when President Bill
Clinton assembled a similar stimulus plan.
"If you're worried you didn't come up with something first, you come up with reasons to
be against it," Sperling said.
Republican candidates have been far more circumspect in their proposals. Former
Arkansas governor Mike Huckabee unveiled what he called a stimulus package this week, but it
was short on details and shorter on price tags. He called for an immediate "second round of
negotiations with subprime lenders with an eye toward" expanding borrower assistance. He
pledged to increase defense funding by about $200 billion and boost spending on energy.
"We will build new planes, new armed vehicles, new robotic land and air vehicles, and
new ships right here in America," he said.
More typical have been proposals from McCain, former New York mayor Rudolph W. Giuliani
and former Massachusetts governor Mitt Romney, who have eschewed short-term fixes for
permanent tax cuts and tax code changes that they say will boost investor confidence and
bolster long-term economic growth.
"In the end, it's far better to have economy growing fast because its tax policy makes
sense," said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who
is now McCain's top economic adviser. "His proposals would fix the underlying issues in the
economy."
Asked whether McCain needed a stimulus plan for political purposes, Holtz-Eakin
replied: "I have no instincts on politics at all. If there is a pandering expert out there
somewhere, it's not me."
---------------------------------------------------------------------------------
There's a new page describing the social aspects of American Fascism at
http://politicsusaweb.com/RootsOfFascism.html
---------------------------------------------------------------------------------
Still the most concise explanation of how we are who we are:
"Let me give you a word of the philosophy of reform. The whole history of the progress
of human liberty shows that all concessions yet made to her August claims, have been
born of earnest struggle. The conflict has been exciting, agitating, all-absorbing,
and for the time being, putting all other tumults to silence. It must do this or it
does nothing. If there is no struggle there is no progress. Those who profess to favor
freedom and yet depreciate agitation, are men who want crops without plowing up the
ground, they want rain without thunder and lightening. They want the ocean without the
awful roar of its many waters."
"This struggle may be a moral one, or it may be a physical one, and it may be
both moral and physical, but it must be a struggle. Power concedes nothing without a
demand. It never did and it never will. Find out just what any people will quietly
submit to and you have found out the exact measure of injustice and wrong which will
be imposed upon them, and these will continue till they are resisted with either words
or blows, or with both. The limits of tyrants are prescribed by the endurance of those
whom they oppress."
---Frederick Douglass
Source: Douglass, Frederick. [1857] (1985). "The Significance of
Emancipation in the West Indies." Speech, Canandaigua, New York, August 3,
1857; collected in pamphlet by author.
http://www.buildingequality.us/Quotes/Frederick_Douglass.htm
---------------------------------------------------------------------------------
A reasonably just and well-ordered democratic society might be possible,
and . . . justice as fairness should have a special place among the political
conceptions in its political and social world. . . [M]any are prepared to accept the
conclusion that a just and well-ordered democratic society is not possible, and even
regard it as obvious. Isn't admitting it part of growing up, part of the inevitable
loss of innocence? But is this conclusion one we can so easily accept?
The answer we give to the question of whether a just democratic society is
possible and can be stable for the right reasons affects our background thoughts and
attitudes about the world as a whole. And it affects these thoughts and attitudes
before we come to actual politics, and limits or inspires how we take part in it. . .
If we take for granted as common knowledge that a just and well-ordered democratic
society is impossible, then the quality and tone of those attitudes will reflect that
knowledge. A cause of the fall of Wiemar's constitutional regime was that none of the
traditional elites of Germany supported its constitution or were willing to cooperate
to make it work. They no longer believed a decent liberal parliamentary regime was
possible. Its time had past.
The regime fell first to a series of authoritarian cabinet governments from 1930 to
1932. When these were increasingly weakened by their lack of popular support,
President Hindenburg was finally persuaded to turn to Hitler, who had such support and
whom conservatives thought they could control.
~ John Rawls "Political Liberalism" pg. lx
__________________________________________________________________
This post contains copyrighted material the use of which has not always been
specifically authorized by the copyright owner. I am making such material available in
my efforts to advance understanding of environmental, political, human rights,
economic, democracy, scientific, and social justice issues, etc. I believe this
constitutes a 'fair use' of any such copyrighted material as provided for in section
107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the
material in this post is distributed without profit to those who have expressed a
prior interest in receiving the included information for research and educational
purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.
If you wish to use copyrighted material from this post for purposes of your own that
go beyond 'fair use', you must obtain permission from the copyright owner.
By Jonathan Weisman and Jeffrey H. Birnbaum
The Washington Post
Thursday 17 January 2008
A rush by President Bush and Democratic leaders to assemble an economic stimulus
package to stave off a recession is being complicated by a potentially debilitating brew of
presidential politics, ideological differences and special interest lobbying.
Already, a bidding war among the top three Democratic candidates is complicating
congressional efforts to produce a package that would not worsen the budget deficit.
Republican contenders and GOP leaders are warning the White House not to compromise too much
with Democrats on an economic stimulus they are not even sure is warranted.
Meanwhile, lobbying groups for industries as varied as high technology and hotels are
clogging the reception rooms and e-mail inboxes of senior lawmakers, pressuring them to
include the groups' favorite benefits in a stimulus package. Small businesses are seeking to
write off new equipment faster. Large businesses are appealing for lower tax rates. And home
builders are pleading to offset their taxable income in years past with the losses they are
suffering today.
"This package is not going to be all things to all people," House Speaker Nancy Pelosi
(D-Calif.) said yesterday, firing a warning shot to Republicans and Democrats alike while
promising a proposal within two weeks. "It is not going to be a panacea."
The debate has highlighted the gulf separating the Democratic and Republican parties on
economic policy, even as K Street stokes the engine on what House Ways and Means Committee
Chairman Charles B. Rangel (D-N.Y.) fears could be a runaway train. Democrats from Capitol
Hill to the campaign trail are ready to spend as much as $100 billion in the coming months
on tax rebates, housing assistance, unemployment benefit extensions and aid to cash-strapped
states to counter a recession that they worry may already have begun.
"The discussion of economic stimulus is no longer an academic exercise," Sen. Charles
E. Schumer (D-N.Y.), chairman of the Joint Economic Committee, said at hearings yesterday.
"In fact, real economic stimulus measures, enacted quickly, could be the last thing between
us and a deep or protracted recession."
Republicans are not so sure. Sen. John McCain (Ariz.), at a Republican presidential
debate last week, objected to recession talk, saying the economy is merely entering a rough
patch. House Republican conservatives yesterday outlined a wish list that was sharply at
odds with that of the Democrats: a steep cut in the corporate income tax rate, big tax
breaks for business investment and a more generous tax write-off for business losses.
Most Republican presidential candidates are far more amenable to long-term changes in
the tax code and spending that would address underlying drags on the economy rather than
short-term, one-time fixes. And GOP leaders in Congress are concerned that Democrats would
try to offset the cost of any stimulus package with future tax increases or loophole closures.
"It is incumbent upon Congress not to make matters worse by raising taxes on anyone, in
any way," House Republican leaders said Tuesday in a letter to their Democratic counterparts.
But Kevin A. Hassett, an American Enterprise Institute economist advising McCain, said
he is resigned to a compromise between Bush and Democratic leaders that conservatives are
bound to dislike.
On K Street, the lobbying community sees potentially lucrative possibilities in an
election year that otherwise might produce little legislation. Some requests are relatively
modest: The National Federation of Independent Business is calling for Congress to make it
easier for home-based businesses to write off their offices. But most are substantial: The
R&D Credit Coalition is seeking an extension of a multibillion-dollar tax break for
corporate research. And the Travel Industry Association wants Congress to cough up tens of
millions of dollars to help fund advertising abroad to lure foreign tourists and create jobs
at restaurants and hotels.
At the tax-writing Senate Finance Committee, one staffer has been charged with trying
to keep track of the lobbyist appeals. So far, the list exceeds two dozen significant ideas,
and it grows daily. The proposed beneficiaries, besides taxpayers, include real estate
agents, physicians, automakers, pension funds, manufacturers, pipelines, insurers, and
corporations small and large.
"There are a lot of interests that have made the case for one provision or another,"
said Rep. Jim McCrery (La.), the top Republican on the Ways and Means Committee. The volume
of requests has not yet overwhelmed him, he said, but only because "I have lots of staff."
Democratic White House hopefuls are exerting their own pressure. Former senator John
Edwards (N.C.) kicked off the bidding Dec. 22 with a $25 billion proposal of clean-energy
projects, unemployment insurance extensions, aid to state governments and housing assistance.
On Jan. 11, Sen. Hillary Rodham Clinton (N.Y.) upped the ante with a $70 billion
stimulus plan that includes a $30 billion housing crisis fund, $25 billion in emergency
energy assistance to poor families, $10 billion to extend and broaden unemployment insurance
benefits, and $5 billion in energy-efficiency and alternative-energy spending. She would
also impose a 90-day moratorium on subprime mortgage foreclosures and freeze interest rates
on subprime mortgages.
Two days later, Sen. Barack Obama (Ill.) laid out a $75 billion plan, including $45
billion in individual $250 tax rebates and Social Security supplements that would be mailed
quickly to as many as 95 percent of U.S. workers. Those rebates could be doubled if the
first injection did not do the trick.
Against the wishes of many Democrats on Capitol Hill, the presidential contenders made
no effort to offset the cost of their proposals with tax increases, loophole closures or
spending cuts.
"I think the most crucial tests for a stimulus package meeting our fiscal
responsibility principles should be, is it fast acting, does it have high bang for the buck,
and is it temporary?" said Gene Sperling, a Clinton economic adviser.
The presidential candidates' proposals have put Democratic congressional leaders in a
difficult position. Their final plan could bolster one candidate over another, depending on
its shape. Asked whether they were being influenced by the competing plans, House Democratic
leaders stood in awkward silence yesterday before Majority Leader Steny Hoyer (D-Md.)
quipped, "When they become president, we'll work with them."
Rather than guiding the debate on Capitol Hill, the candidates' packages have
immediately become fodder for argument. Austan Goolsbee, a University of Chicago economist
and Obama economic adviser, scoffed at much of the Clinton plan, saying the complexity of
the proposals would delay their impact until it is too late to make a difference. By the
time poor families realized they were eligible for Clinton's $25 billion in low-income
heating assistance and fill out the five-to-10-page application, winter would be over, he said.
Underscoring Clinton's contention that she has the experience to address such problems,
Sperling said much of the plan grew out of lessons learned in 1993, when President Bill
Clinton assembled a similar stimulus plan.
"If you're worried you didn't come up with something first, you come up with reasons to
be against it," Sperling said.
Republican candidates have been far more circumspect in their proposals. Former
Arkansas governor Mike Huckabee unveiled what he called a stimulus package this week, but it
was short on details and shorter on price tags. He called for an immediate "second round of
negotiations with subprime lenders with an eye toward" expanding borrower assistance. He
pledged to increase defense funding by about $200 billion and boost spending on energy.
"We will build new planes, new armed vehicles, new robotic land and air vehicles, and
new ships right here in America," he said.
More typical have been proposals from McCain, former New York mayor Rudolph W. Giuliani
and former Massachusetts governor Mitt Romney, who have eschewed short-term fixes for
permanent tax cuts and tax code changes that they say will boost investor confidence and
bolster long-term economic growth.
"In the end, it's far better to have economy growing fast because its tax policy makes
sense," said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who
is now McCain's top economic adviser. "His proposals would fix the underlying issues in the
economy."
Asked whether McCain needed a stimulus plan for political purposes, Holtz-Eakin
replied: "I have no instincts on politics at all. If there is a pandering expert out there
somewhere, it's not me."
---------------------------------------------------------------------------------
There's a new page describing the social aspects of American Fascism at
http://politicsusaweb.com/RootsOfFascism.html
---------------------------------------------------------------------------------
Still the most concise explanation of how we are who we are:
"Let me give you a word of the philosophy of reform. The whole history of the progress
of human liberty shows that all concessions yet made to her August claims, have been
born of earnest struggle. The conflict has been exciting, agitating, all-absorbing,
and for the time being, putting all other tumults to silence. It must do this or it
does nothing. If there is no struggle there is no progress. Those who profess to favor
freedom and yet depreciate agitation, are men who want crops without plowing up the
ground, they want rain without thunder and lightening. They want the ocean without the
awful roar of its many waters."
"This struggle may be a moral one, or it may be a physical one, and it may be
both moral and physical, but it must be a struggle. Power concedes nothing without a
demand. It never did and it never will. Find out just what any people will quietly
submit to and you have found out the exact measure of injustice and wrong which will
be imposed upon them, and these will continue till they are resisted with either words
or blows, or with both. The limits of tyrants are prescribed by the endurance of those
whom they oppress."
---Frederick Douglass
Source: Douglass, Frederick. [1857] (1985). "The Significance of
Emancipation in the West Indies." Speech, Canandaigua, New York, August 3,
1857; collected in pamphlet by author.
http://www.buildingequality.us/Quotes/Frederick_Douglass.htm
---------------------------------------------------------------------------------
A reasonably just and well-ordered democratic society might be possible,
and . . . justice as fairness should have a special place among the political
conceptions in its political and social world. . . [M]any are prepared to accept the
conclusion that a just and well-ordered democratic society is not possible, and even
regard it as obvious. Isn't admitting it part of growing up, part of the inevitable
loss of innocence? But is this conclusion one we can so easily accept?
The answer we give to the question of whether a just democratic society is
possible and can be stable for the right reasons affects our background thoughts and
attitudes about the world as a whole. And it affects these thoughts and attitudes
before we come to actual politics, and limits or inspires how we take part in it. . .
If we take for granted as common knowledge that a just and well-ordered democratic
society is impossible, then the quality and tone of those attitudes will reflect that
knowledge. A cause of the fall of Wiemar's constitutional regime was that none of the
traditional elites of Germany supported its constitution or were willing to cooperate
to make it work. They no longer believed a decent liberal parliamentary regime was
possible. Its time had past.
The regime fell first to a series of authoritarian cabinet governments from 1930 to
1932. When these were increasingly weakened by their lack of popular support,
President Hindenburg was finally persuaded to turn to Hitler, who had such support and
whom conservatives thought they could control.
~ John Rawls "Political Liberalism" pg. lx
__________________________________________________________________
This post contains copyrighted material the use of which has not always been
specifically authorized by the copyright owner. I am making such material available in
my efforts to advance understanding of environmental, political, human rights,
economic, democracy, scientific, and social justice issues, etc. I believe this
constitutes a 'fair use' of any such copyrighted material as provided for in section
107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the
material in this post is distributed without profit to those who have expressed a
prior interest in receiving the included information for research and educational
purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.
If you wish to use copyrighted material from this post for purposes of your own that
go beyond 'fair use', you must obtain permission from the copyright owner.