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Stimulus Momentum Builds

With unemployment above 10 percent and Democratic poll ratings dipping, anxious leaders on both sides of the Capitol are gathering ideas and building momentum for what could be a significant new jobs package early next year.

President Barack Obama has called for an economic summit at the White House on Dec. 3, which could lay the groundwork for a deal on another stimulus plan. At the same time, resistance among Members to a significant new economic package appears to be fading.

For most of the year, Democratic leaders put off the idea of another stimulus after passing the first $787 billion spending plan in February. They cautioned publicly that the package needed time to work but privately noted that Members had a severe case of stimulus and bailout fatigue.

However, the continued uptick of the unemployment rate — now at 10.2 percent — has renewed the once-taboo idea of another stimulus.

“While Members are definitely concerned about spending, there also is a recognition that unemployment is over 10 percent, and Members want to be able to say they are doing something on unemployment and jobs,” one House leadership aide said.

House Democratic leaders were planning to huddle with Members on Monday night to discuss what to put in such a package.

Meanwhile, on the Senate side, Majority Leader Harry Reid (D-Nev.) has told his caucus that a jobs package would be a top priority early next year.

“Although we believe passing health care will help our economy over the long haul, we feel we need to do something that will provide a more immediate boost,” a Senate Democratic leadership aide said. “Sen. Reid will be working with his caucus and the administration to put together such a package in the coming weeks so we can turn to it as soon as possible after completing health care.”

Members have been quietly lining up behind various ideas for months. One proposal has already been signed into law — an expansion of a first-time homebuyer tax credit, along with an unemployment benefit extension to the hardest hit states.

But far bolder and perhaps more expensive plans could be in the offing. One idea that continues to get talked about is a $500 billion transportation reauthorization bill, which is up for renewal anyway and would produce tangible projects and jobs that are easy for voters to see and lawmakers to tout.

The bill authored by House Transportation and Infrastructure Chairman James Oberstar (D-Minn.) has been pushed hard by Majority Whip James Clyburn (D-S.C.) and Democratic Caucus Chairman John Larson (Conn.), among others.

“It’s not like there aren’t good jobs bills available,” a senior Democratic aide said.

The question for Congressional leaders has been whether the spending in such a plan could enter the economy quickly enough and how to pay for it. Some Democrats, led by Rep. Peter DeFazio (Ore.), are pushing for a new transaction tax on Wall Street to help rebuild Main Street, believing it would put Republicans opposing any tax increases in the position of backing Wall Street traders over middle-class Americans.

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