Few Takers for New Stimulus

Leaders Want to Wait to Act

Posted July 6, 2009 at 6:37pm

For all the recent talk of another stimulus package, it’s not going to happen anytime soon.

Pressure for a second influx of spending into the flagging economy has been building across the Democratic spectrum. Yet for all the chatter, Democratic leaders and President Barack Obama appear to have little appetite to push a package forward until at least the fall — despite the skyrocketing unemployment numbers.

“The reality is we’re four months into the [first] recovery act, which is designed to work over two years,— said a House Democratic aide. “We’re not going to drop everything tomorrow— to do another stimulus bill.

Similarly, a Senate Democratic leadership aide said Monday the resolve against doing another stimulus in that chamber is firm.

“Bailout fatigue has settled in — and it would be very difficult to get such a bill through the Senate,— the aide said.

House Majority Leader Steny Hoyer (D-Md.) said on “Fox News Sunday— that, like many Americans, he’s not satisfied with the pace of spending but that it’s premature to talk about another package.

Vice President Joseph Biden added fuel to the fire Sunday on ABC’s “This Week,— saying the administration had “misread— how bad the economy was.

Republicans ripped into the comments and the $787 billion stimulus package, which they labeled a failure.

“They didn’t misread the economy,— House Minority Whip Eric Cantor (R-Va.) said. “What they did is miswrote the stimulus bill and got the prescription wrong.—

Cantor is seeking a meeting with Obama to discuss redirecting spending from the initial stimulus to tax cuts for small businesses.

Still, pressure for a second stimulus measure appears to be building, particularly among the Democratic rank and file.

Sen. Sheldon Whitehouse (D-R.I.) told ABCNews.com on Monday that another stimulus is “probably needed— and he expects one will emerge toward the end of the year.

And liberal lawmakers like Congressional Progressive Caucus Co-Chairman Raúl Grijalva (D-Ariz.) say they are likely to ramp up calls for more spending.

But so far, Democratic leaders are pushing back.

House Democratic aides said that instead of advocating for another stimulus in the immediate term, leaders will look to other upcoming legislative endeavors to make the case that they are helping turn around the economy. In particular, leadership will point to the regular appropriations bills and the health care overhaul — expected to hit the House floor this month — as important for current and long-term growth.

“Health care [and] approps will all be messaged in terms of the economy,— said one House Democratic leadership aide.

Democrats recognize the political stakes are high for another stimulus — it would be tantamount to admitting that the first package failed to deliver and would provide ammunition to Republicans, who voted unanimously against it in the House. But it also could wreak havoc on the upcoming legislative calendar, which is already jam-packed with other priorities.

Fiscally conservative Blue Dog Democrats also have grown increasingly concerned about record deficits. Indeed, instead of another stimulus package, Democratic leaders plan to bring a pay-as-you-go bill to the floor in a show of fiscal austerity.

The fall could be another story, however, if the jobless numbers continue to spike and a turnaround appears elusive.

House Appropriations Chairman David Obey (D-Wis.) and Senate Appropriations Chairman Daniel Inouye (D-Hawaii) both indicated in February that another package might be needed if the first one didn’t prove robust enough.

Obey in particular said the first stimulus should have been larger but acknowledged a larger bill would not have made it through Congress. Republicans and moderate Democrats in the Senate forced significant cuts in the package in conference committee.

In the meantime, one bill that could arguably be called a stimulus is Transportation and Infrastructure Chairman James Oberstar’s (D-Minn.) $500 billion, six-year transportation bill, but Oberstar was undercut a few weeks ago when Transportation Secretary Ray LaHood said the Obama administration wanted to delay the bill until 2011 and pass a stopgap measure instead.

The challenge for Oberstar is that his bill would require a tax increase to comply with pay-as-you-go budget rules, and Democrats already have heavy lifts on health care and energy legislation.

A short-term $20 billion transportation fix may be in the offing instead to keep the trust fund from going broke sometime in August or September, but Oberstar opposes a short-term solution, warning that states may slow long-term projects until they are sure they will get funding.

“Passage of a long-term authorization will reinforce the progress made under the stimulus and provide greater continuity for states and transit agencies,— Oberstar said in a statement Monday.