Lawmakers Clash on Economic Help
Maybe it's some leftover holiday spirit. Or perhaps it's polls showing most Americans take a dim view of the partisan gridlock in Washington. Whatever the case, in these early days of the second session of the 110th Congress, talk of bipartisanship abounds.
Congress recently came back to work in Washington, and while lawmakers seem to agree that an economic recession looms around the corner, the parties are split on what to do about it.
Democrats say a stimulus package could be on the president's desk in as few as 30 days.
"I think nothing would restore more confidence in the American people than if we could come up with a bipartisan initiative right away that says we are working together," said House Speaker Nancy Pelosi (D-CA).
Pelosi met with GOP House leaders on Wednesday to present a united front on the urgency of the problem. House Minority Leader John Boehner (R-OH) spoke to reporters afterward.
"There's no question there's a threat to the economy, and so there is an agreement that we will work together on a package that truly is stimulative that will happen quickly, and those conversations are going to continue in the coming days," Boehner said.
But the devil is in the details, and while the two parties agree that something should be done, they're not close to agreeing on what. Democrats tend to favor some direct cash infusions to low- and middle-income Americans in the form of tax rebates, by extending jobless benefits for those out of work, and by making food stamps more available.
Their mantra is that a stimulus program be targeted, timely and temporary.
"Direct injections of cash into the economy, through both immediate consumer and government spending, are the shots in the arm needed to ward off a recession," said Sen. Charles Schumer (D-NY). "In fact, many, many economists believe that spending stimuli have a greater immediate effect on the economy than tax cuts."
The Senate Joint Economic Committee — which Schumer chairs — heard testimony on Wednesday from a panel of economists. Former Treasury Secretary Lawrence Summers said any stimulus package should add up to $75 billion to $100 billion — and maybe twice that.
"Economic cooling is a much greater risk today than economic overheating. There is sufficient weakness in the economy now to justify stimulus legislation that will take effect as rapidly as possible," Summers said.
Democrats favor stimulating the economy by putting cash in the hands of consumers, and some Republicans agree. Other Republicans believe the solution lies in cutting taxes. There have been calls to extend President Bush's tax cuts, which are set to expire in 2010. And a group of conservative House Republicans have proposed cutting the corporate income tax rate from 35 percent to 25 percent.
"Perhaps one thing we agree on in Congress is that a stimulus package is needed. But we think it is more important to stimulate paychecks than stimulate welfare checks," said Rep. Jeb Hensarling (R-TX).
Nothing is likely to be settled until President Bush weighs in. He's meeting with congressional leaders next week, and it may become clearer whether Congress and the White House can truly put aside their partisan differences.
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