Truce Possible on Plan for Stimulus

Posted January 15, 2008 at 6:35pm

House Republican leaders returned to Capitol Hill on Tuesday offering an olive branch over an expected economic stimulus package, even as they acknowledged any truce is likely to be fragile at best.

Speaker Nancy Pelosi (D-Calif.) and Minority Leader John Boehner (R-Ohio) are scheduled to meet this afternoon to discuss the package.

House Minority Whip Roy Blunt (R-Mo.) asserted that rank-and-file Members had heard complaints back in their districts about the partisan gridlock that plagued the first half of the 110th Congress.

“Washington is broken and somebody has to be willing to try to fix it,” Blunt said at a weekly press conference with Republican Conference Chairman Adam Putnam (Fla.).

But Blunt acknowledged that any bipartisanship is likely to be short-lived in an election year, predicting the second session of the 110th Congress will have “a conciliatory start and a conciliatory finish, and the middle won’t be all that good.”

Whether that conciliatory relationship could even survive preliminary negotiations over an economic stimulus package now under discussion by Democratic leaders remains to be seen, however.

Boehner and Blunt issued a letter to Pelosi on Tuesday, vowing that Republicans would oppose any attempt to abide by pay-as-you-go spending rules — specifically any tax increase required to offset additional federal spending — with regard to the stimulus package.

“Indeed if such tax increases or wasteful, unnecessary spending are included in the proposal, not only will House Republicans be forced to strongly oppose the plan, but it will also represent a major missed opportunity for Congress,” the letter states.

While that ultimatum could set up a potential showdown with the fiscally conservative Democratic Blue Dogs — who lost similar negotiations over the alternative minimum tax in late 2007 — senior Democratic lawmakers suggested Tuesday that the stimulus program could be exempt from spending rules.

House Majority Whip James Clyburn (D-S.C.) noted that PAYGO rules do no apply to “emergency” spending.

“We’re going to have to define that,” he said, adding that he would call the current economic situation an emergency.

Democratic leadership met with a group of about 15 lawmakers early Tuesday evening to discuss strategy for the legislation, but Ways and Means Chairman Charlie Rangel (D-N.Y.) said the group did not agree to actual proposals.

“We didn’t warm up to anything in specific,” Rangel said.

House and Senate leaders are scheduled to meet with President Bush on Jan. 22. “I’m confident we’ll have some working papers to share with them,” Rangel said.

The New York lawmaker did allow, however, that he expects the package to total in the range of $100 billion. Rangel declined to answer whether PAYGO rules could be waived, stating only: “PAYGO is inconsistent with trying to resolve a recession.”

Financial Services Chairman Barney Frank (D-Mass.), who also attended Tuesday’s meeting of House Democratic leaders and lawmakers, reiterated that PAYGO rules allow any necessary offsets to occur in a five-year window and are not required immediately.

“Clearly you can’t have a stimulus if it is simultaneously paid for,” Frank said, and later added: “The go comes first and the pay comes later.”

In the meantime, Democratic and Republican leaders did appear to agree on at least one aspect of a potential economic package, with senior Members from both parties promoting the idea of hundreds of dollars in “rebates” for individual taxpayers.

Clyburn said Tuesday that a federal payroll tax rebate could be provided to individuals earning up to $105,000, in amounts ranging from $300 to $600.

“Those people are more likely to put it back into the economy,” Clyburn said, according to a spokeswoman.

Both Blunt and Putnam voiced a similar proposal Tuesday afternoon, suggesting taxpayers would receive rebate checks worth $250 to $500, although unlike an expected Democratic proposal it would not focus solely on low- and middle-income taxpayers.

“Immediate stimulus is where we meet agreement,” Blunt said. The Missouri lawmaker said it would be similar to a 2001tax rebate program, stating there is “no reason to reinvent what works.”

But Republican leaders declined to discuss whether they would back proposals to extend additional funds to food stamp programs or unemployment, asserting those items would be addressed only if a full-blown recession came to fruition.

“What we’re really talking about is doing what we need to do now,” Blunt said. “I think it’s too early to cross that bridge.”