Reid and Baucus Under Pressure

Posted January 29, 2008 at 6:38pm

Senate Democrats grew increasingly isolated in their push for an expanded stimulus package Tuesday, even as they faced an internal revolt over a proposal by Senate Finance Chairman Max Baucus (D-Mont.) to give tax rebates to millionaires and billionaires.

With Speaker Nancy Pelosi (D-Calif.), House Minority Leader John Boehner (R-Ohio) and Senate Republican leaders pressing for clean action on the nearly $150 billion House-brokered bill after it passed Tuesday on a 385-35 vote, Senate Democrats were left to defend their stance that the measure can be improved without delaying relief.

Senate Majority Leader Harry Reid (D-Nev.) said, “51 Democrats … without exception believe this package could be better” and that most of the House Members he has talked to “like what we’re doing.”

Senate Democrats strongly support Baucus’ proposals to extend unemployment benefits and food stamps and ensure that tens of millions of Social Security recipients get rebate checks. But they had a collective “gag reflex” over Baucus’ proposal to nix income caps for getting tax rebates, Reid said.

“Taking off the caps causes me to want to gag,” Reid said. Reid questioned the wisdom of raising caps, which would ensure that Members of Congress and wealthier Americans get checks. The income caps in the House package start phasing out checks at $75,000 for individuals and $150,000 for couples. Reid said it makes no sense “to spend $5 billion to give me a rebate. … I’m not going to spend it.”

Reid said the income caps would either be added back into the proposal at the committee markup today or there would be an effort on the Senate floor to restore them. He added that he intended to move a second stimulus package, which could encompass longer-term economic projects like infrastructure, within weeks.

Reid’s comments came after a chorus of Democrats ripped the plan to lift the caps, including sharp criticism from Senate Budget Chairman Kent Conrad (D-N.D.). Conrad said it lacked common sense “to send $1,000 checks to Donald Trump, Bill Gates … and Members of Congress,” and said relief should be targeted to those who need it the most.

Sen. Jay Rockefeller (D-W.Va.) said no Democrats defended the idea at their regular Tuesday luncheon, and many spoke against it. “Nobody thinks rich people should get a $500 check,” Rockefeller said.

House Ways and Means Chairman Charlie Rangel (D-N.Y.) also rejected the idea out of hand. “I can’t think of one political or economic reason why we should settle for the removal of income caps,” he said.

Pelosi, meanwhile, argued against changing the House tax rebate compromise at the expense of the middle class. And Boehner argued against diluting the size of the rebate checks.

“I think that most Americans are expecting that they’re going to get $300 to $600 from the federal government this summer,” Boehner said. “All of these other brilliant ideas will do nothing more than to reduce the size of the checks that the American people are expecting. I’m not sure that’s going to go over very well.”

In addition, Senate Minority Leader Mitch McConnell (R-Ky.) announced Tuesday that Senate GOP leaders prefer to pass an unamended House bill.

Under fire, Baucus defended his package as more streamlined and simpler than the much-ballyhooed House deal.

“It’s important for people to realize that the House rebate measure is extremely complicated,” Baucus said. “People will be so confused they won’t know what their rebate check is because it’s such a complicated structure and they’ll be very upset when their neighbors get a little more in their check than somebody else.”

Baucus also confidently predicted bipartisan passage of his bill today, as well as filibuster-proof margins on the Senate floor.

Though Democrats clearly oppose elimination of the income caps, Senate Majority Whip Dick Durbin (D-Ill.) declined to criticize the move, saying Baucus was attempting to attract Republicans.

“I want to see what the final package looks like,” Durbin said. “We have to find out what has bipartisan support.”

Despite the laundry list of potential Democratic and Republican add-ons, some Democrats said they did not expect much to be added in the end. Sen. Debbie Stabenow (D-Mich.) — a Finance Committee member — said an extension of unemployment benefits had the best chance of being included in a final Senate package.

“So I feel like we’ve got a good opportunity there. A lot of the other things I support as good ideas, I think, will have difficulty,” Stabenow said.

But key Finance Republicans said they don’t see the downturn in job creation that would make extended unemployment assistance necessary.

“That part of this is way premature,” said Senate Minority Whip Jon Kyl (R-Ariz.).

Still, Republican aides indicated that it may be difficult to prevent some additional spending from becoming part of the bill, given that Democrats need to pick off only nine or 10 GOP Senators to reach a filibuster-proof margin.

But those aides also said leadership would likely put pressure on Republican Senators to avoid a House-Senate conference on the bill.

“I don’t see how it can be improved by becoming a Christmas tree with ornaments from Senators — even Republican Senators,” said Senate Republican Conference Chairman Lamar Alexander (Tenn.). “I’ve got a number of things I’d like to put on the Christmas tree too, and I’m sure a number of Democratic Senators do, too. But if we do that, we will not get the job done.”