Congress, President Work on Stimulus Package (1/18/2008)

Congressional Leaders are cooperating with President Bush to create a $145 billion economic stimulus package that could include a number of tax and finance reforms. Although the bill will not include making President Bush’s tax cuts permanent, the President is urging for quick passage for the bipartisan legislation. Although, at this point, there are few details regarding the bill, there is talk about possible funding for school construction in the stimulus package.

A number of states around the country are dealing with budgetary shortfalls and tight fiscal constraints. As such, many states and local school districts have had to put school construction projects on the backburner, awaiting more prosperous times to move forward. Federal funding from the stimulus package could provide states with the opportunity to finish much-needed construction projects.

On Wednesday, Lawrence Mishel, President of the Economic Policy Institute, testified before the Joint Congressional Economic Committee. In his testimony, Mishel listed infrastructure spending on items such as school repair and construction as a way to provide over a million jobs within a year, providing the exact kind of economic turnaround lawmakers are looking for.

Congressional leaders from both parties are working together with the President to draft legislation that can win majority support from both parties, and that the President will not veto. Speaker of the House Nancy Pelosi (D-CA) and House Minority Leader John Boehner have both expressed their desire to work together, and participated in a conference call with President Bush over the spending measure.

Rep. Boehner maintains that Republicans are planning to support the legislation, so long as it does not become a carrier for every Democratic spending project that did not make it into the fiscal year 2008 omnibus appropriations bill.

A number of moderate Democrats in the House are worried about staying with the Pay Go rules the House imposed last year, which requires that any new spending is offset somewhere else. While some offsets are likely, finding enough money to offset the $145 billion expected in the stimulus bill may prove to difficult to pull off.

Additionally, any spending that is not offset may come back and haunt Democrats when the fiscal year 2009 appropriations cycle starts up again this year. President Bush and the fiscal conservatives in Congress are going to remain more steadfast on their spending policies in light of the stimulus package, making them a roadblock to any additional spending increases that the majority might push for. The stimulus legislation should reach the House floor before the end of the month.

Resources:
Jay Heflin, “Congressional Leaders Hopeful on Stimulus Package After Talks With Bush,” Congress Now, January 17, 2008.
Jay Heflin, “Bush Backs Stimulus Bill, Says Making Tax Cuts Permanent Should Be the Next Step,” Congress Now, January 18, 2007.
Author: SAS