Road Map: House, Senate, Obama Off to a Stimulating Start

Posted January 5, 2009 at 6:55pm

With words like “enthusiasm” emerging from the lips of Senate Minority Leader Mitch McConnell (R-Ky.), and Senate Majority Leader Harry Reid (D-Nev.) averring that “I am confident that we can do this. And we have to do this,” it’s clear that Democrats and Republicans are off and running down that rocky path to bipartisan passage of a $1 trillion economic stimulus bill.

[IMGCAP(1)]With Democrats — led by President-elect Barack Obama — talking more about tax cuts than pet transportation projects and balloon payments to states, they’ve succeeded in making the GOP almost giddy at the prospect of $300 billion or more in tax relief.

In fact, House Minority Leader John Boehner (R-Ohio) emerged from Monday’s bipartisan, bicameral leadership meeting with Obama and made a shocking — and risqué — confession that, “Frankly, the size may not matter,” as long as the stimulus has both short- and long-term effects on tax policy.

Democrats said they strategically leaked two key pieces of information over the weekend in order to begin their seduction of Republicans, who appear to be dying to be romanced, even as they continue to play coy in hopes of eliciting more conservative-leaning policy proposals.

But the news that Obama wanted to spend buckets of cash on tax cuts and that Democrats on Capitol Hill no longer plan to ram through a bill by Jan. 20 appeared to have hit their mark.

“I think [Obama’s] already been listening to some of the proposals we’ve made,” McConnell said after the meeting, noting the “expanding proportion” that is now geared toward “tax relief.”

Plus, Democrats appeared thrilled that Republicans actually seem open to their advances.

“They’ve been seemingly choosing their words very carefully so as to not be boxed into opposing” the stimulus, one senior Senate Democratic aide said.

Of course, that doesn’t mean Republicans aren’t still a little insecure after two years of essentially being shut out of the process on the House and Senate floors.

“The first thing we need to focus on is the process and to make sure that Republican views are adequately considered in the process,” Senate Minority Whip Jon Kyl (R-Ariz.) said.

Republicans also don’t want to be rushed into giving it up too quickly. They’re still smarting from falling for President George W. Bush’s line in October that the financial services industry had to be bailed out immediately, which resulted in much buyers’ remorse when the $700 billion rescue package didn’t work as expected.

“Because of that experience, I think people want to get it right,” Kyl noted.

That sentiment, expressed by Boehner in the meeting with Obama, extracted an “I agree with you” from Obama, Republicans said. As an added bonus, Obama plans to designate a high-level staffer to negotiate exclusively with Congressional Republicans, Democratic sources said.

Still, GOP aides sought to dash the notion that Republicans could be enticed to support Obama’s stimulus plan on the strength of its tax cuts alone.

“It depends on the details,” said one senior Republican Congressional aide.

Some Republicans are also wary that Obama is trying to use the lure of tax cuts to steer them toward backing a measure that includes too much spending, senior aides suggested.

“If I give you a lollipop, and I punch you in the face, you’re still going to hate me,” observed one.

But Democratic aides said the tax provisions would hopefully be designed to not just create a GOP buy-in, but also to ensure maximum pressure from business-backed lobbyists.

Senate Finance Chairman Max Baucus (D-Mont.) will begin bipartisan talks on the tax portion this week and could have a draft ready for discussion by the end of the week or early next week, sources said.

Most importantly, Republicans are concerned about giving tax breaks to workers who do not make enough to pay federal taxes. There is also some disenchantment among Republicans with rebates, which many believe failed to provide much in the way of stimulus when Bush tried them last year.

And Democrats said they’re committed to finding the sweet spot on both taxes and spending.

Though they haven’t fully agreed to put the bill through the committee process in both chambers, Obama pledged on Monday that he would insist on transparency for the bill.

Brendan Daly, spokesman for Speaker Nancy Pelosi (D-Calif.), told reporters there was a commitment to work in a bipartisan way with Republicans, including holding hearings and posting the legislation online. “They said they want to work together, and we take them at their word,” Daly said. “We want to work with them.”

Daly said Democrats hoped to get the stimulus package through the House by the end of January and on Obama’s desk by the Presidents Day recess in February.

Republicans said they were pleased that a large tax cut package has been talked about, although they remain concerned about the overall size and level of spending.

“We’re anxious to see it and anxious to work with our new president,” Boehner said.

Indeed, Democrats said they fear that no amount of wooing may stop Republicans from pulling out their old standby concern — earmarks. That will present Democrats with a big problem, given that a large portion of the measure is expected to include transportation projects that are often singled out as pork-barrel spending.

“There will always be something that Republicans can twist into an earmark,” said the senior Senate Democratic aide.

So Democrats have a backup plan if their come-hither look doesn’t work: dangling the voters in front of the GOP.

“I think it’s a political risk if they vote against an economic recovery program with both investments and tax cuts,” Democratic Congressional Campaign Committee Chairman Chris Van Hollen (Md.) said.

Steven T. Dennis and Keith Koffler contributed to this report.