Stimulus Plan Still in Flux

Posted February 10, 2009 at 6:36pm

House and Senate Democratic leaders on Tuesday began a sprint to finalize a massive economic stimulus bill before the end of the week, even as five Senate centrists dug into their positions and appeared to call for tens of billions in more cuts from the bill before they would vote for any final version.

The five Senators responsible for the compromise that allowed the measure to pass the Senate on Tuesday sought to broaden their base of support in the Senate in order to strengthen their hand in the final negotiations. Sens. Ben Nelson (D-Neb.), Joe Lieberman (ID-Conn.), Susan Collins (R-Maine), Arlen Specter (R-Pa.) and Olympia Snowe (R-Maine) struck a deal last week with Senate Democratic leaders to pare the Senate bill by $108 billion in exchange for their votes.

To avoid being a small gang trying to hold back the desires of an otherwise unified Congressional Democratic leadership that wants to add back billions in spending for school construction and aid to states, Snowe, Collins, Lieberman and Nelson met Tuesday afternoon with a large group of Senate Democratic moderates to try to convince them to support their position heading into conference. Specter was not spotted at the meeting.

Asked whether the goal had been achieved with the 14 Senate Democrats who attended, Snowe said she felt there was general agreement in the room to back the position the five had staked out, but she cautioned that no formal decisions were made.

“We’re trying to get a consensus … and just get a sense of their feelings about different issues,” Snowe explained. She added that the additional Senators were “giving direction as well” to the lead centrist negotiators as the conference speeds to a close.

Senators who attended the centrist meeting included more experienced Members such as Tom Carper (D-Del.), Mary Landrieu (D-La.), Evan Bayh (D-Ind.) and Blanche Lincoln (D-Ark.), as well as freshmen such as Mark Begich (D-Alaska), Mark Udall (D-Colo.) and Jeanne Shaheen (D-N.H.).

Centrist Republicans and Democrats said conferees would likely have to shave the bill by tens of billions more than the $108 billion taken out of the Senate measure to guarantee final passage. Though the Senate passed an $838 billion bill and the House passed a $816 billion measure, key moderates said they were asking for the final bill to come in at about $780 billion, which would include a nearly $70 billion patch to make sure the alternative minimum tax does not hit middle-income families.

Still, Senators and aides said the likely compromise would be to have a conference report that costs approximately $800 billion — a price tag all three moderate Republicans have indicated they might be able to support as long as it still includes the AMT fix. The key will be in what is added back and how. If it’s school construction money, the additions probably would not fly, but aid to states could make it back in, aides and Senators said Tuesday.

Senators and aides predicted that key Senate amendments adding tax credits for homebuyers and new car purchases would be axed to make room for additional spending, as well as to help trim the bill further.

But Snowe warned against any scheme to take out the $70 billion AMT fix and fill the gap with more spending. Instead, she said conferees would have to find cuts elsewhere in the bill to add spending for education and other programs.

“You don’t draw too many lines in the sand, but I think it is important in keeping with the Senate bill on the spending side. That’s going to be critical,” Snowe said. “And not to use the alternative minimum tax as an avenue for funding as well. … Because there are other areas where you could eliminate spending.”

Nelson said any attempted sleight of hand on spending in the bill would certainly prompt him, and Collins, to oppose the measure.

“Sen. Collins has said if this comes back materially altered as to the top line number or to the pieces within the package, that she plans to vote against it and you can put me in that category, too,” Nelson said.

House Democrats were frustrated that the fate of the bill appears to hang on three Senate Republicans, and they clung to fading hopes that they could win back some of their treasured priorities like school construction funding.

“We have three people saying, ‘If you change anything, we’re jumping ship.’ That’s going to affect the tenor of the conference,” House Majority Leader Steny Hoyer (D-Md.) said. “I would think that’s not a position we ought to be in where three people alone can decide what the Congress and the country are going to do.”

Rep. Anthony Weiner (D-N.Y.) said House Democrats grumbled through Tuesday’s Caucus meeting about their stimulus ideas being held hostage by a handful of Senate Republicans.

“I would say to Sen. Nelson, we are not potted plants here in the House,” the New York Democrat said. “The idea that we in the House are just going to wait for the Senate to nod before we pass any bills in the House this year is probably not a good way to get started.”

Senate Majority Whip Dick Durbin (D-Ill.) acknowledged that the three Republicans who helped Senate Democrats get the 60 crucial votes to overcome GOP objections to the bill were basically the barometers of what was possible in conference committee. He noted that conferees needed to know the maximum the three would be willing to spend, what their thoughts are on the percentage of tax cuts in the bill, and what elements would be deal breakers.

“That, I think, is the only way to move this conference to a conclusion quickly,” Durbin said.

Speaker Nancy Pelosi (D-Calif.) said while Members of her Caucus are frustrated at some of the items that the Senate has cut from the bill, she doesn’t expect defections on the final vote. “I think we’re in good shape with our Caucus,” she said.

Pelosi cited several priorities that House Democrats will push for in the conference. These include funds for school construction, the greening of federal buildings, health information technology, an extension of Consolidated Omnibus Budget Reconciliation Act benefits and refundable tax credits for children.

Still, House Democrats pinned their hopes on restoring some of the chamber’s priorities by targeting spending the Senate tacked on to the bill, including $4 billion for homeland security and $5 billion for a transportation fund that would make competitive grants. And while there is sentiment in the House to strip out the fix to the alternative minimum tax to make room for more spending, Hoyer said he predicts the AMT fix will remain.

Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) sought to accelerate negotiations by making himself one of the final arbiters of any conference report.

Reid said he hoped to have a rough draft of a compromise with the House by sometime today, saying he and Pelosi believe they can finish most of the work in the first 24 hours following Senate passage of the bill. The Senate voted 61-37 Tuesday afternoon to approve the bill, with the only Republican support coming from Collins, Specter and Snowe.

Reid said he decided to become a conference negotiator on the bill to get a resolution with the House more quickly.

But Senate Democratic aides said Reid appointed himself to both make sure that the Senate compromise was optimally protected and to avoid a fight for the spot among senior Members of both the Senate Appropriations and Finance panels. The other Senate conferees include Appropriations Chairman Daniel Inouye (D-Hawaii), Appropriations ranking member Thad Cochran (R-Miss.), Finance Chairman Max Baucus (D-Mont.) and Finance ranking member Chuck Grassley (R-Iowa).

House conferees include Appropriations Chairman David Obey (D-Wis.), Ways and Means Chairman Charlie Rangel (D-N.Y.), Energy and Commerce Chairman Henry Waxman (D-Calif.), Appropriations ranking member Jerry Lewis (R-Calif.) and Ways and Means ranking member Dave Camp (R-Mich.).

Steven T. Dennis and Jennifer Bendery contributed to this report.