Blue Dogs Wary of Another Stimulus

Posted November 17, 2009 at 6:32pm

House Democratic leaders signaled Tuesday that they are moving full steam ahead with a stimulus bill in the coming weeks, a plan that is already dividing fiscally conservative Democrats unsure of whether they can swallow another multibillion-dollar spending package.

Blue Dogs planned to gather Tuesday evening to discuss the upcoming stimulus bill, the details for which remain murky. Top Democrats are still undecided on the components or the cost of the bill, although Majority Leader Steny Hoyer (Md.) said Tuesday that lawmakers plan to pass it by Dec. 18 and “clearly need to move— on extending unemployment and COBRA insurance.

House Democratic Caucus Chairman John Larson (Conn.) said “it became clear— during a Monday night Caucus meeting that momentum is building among Democrats for another stimulus bill. “There is no shortage of ideas and legislation on the table, and we will carefully consider them all, but the time to act is now,— Larson said.

But in the absence of details, fiscally conservative Democrats are torn between adding to long-term debt and more proactive efforts to stem unemployment, which hit 10.2 percent last month.

Blue Dog Co-Chairman Baron Hill (D-Ind.) said he would “probably not— support any stimulus bill unless it was paid for with funds earmarked for the $787 billion stimulus package in February.

Unless those dollars are used to pay for the next package, “I’ve got a problem with it,— Hill said.

Rep. Allen Boyd (D-Fla.), another Blue Dog and a former leader of the group, said another stimulus “probably doesn’t make much sense right now— since the economy seems to be slowly bouncing back.

“Unemployment is a lagging indicator. … Things are beginning to pick up a little,— Boyd said. “The downside for us is that we have dug a hole so deep in terms of our debt and our deficit. [Another stimulus] only makes it worse.—

Boyd said he voted for the $787 billion stimulus in February, but this time he is “on the fence.—

But other Blue Dogs said the economic situation in their communities is so bad that stimulus dollars are a necessity.

“We don’t have any choice,— said Rep. Dennis Cardoza (D-Calif.), whose district has an 18 percent unemployment rate. “If we do a jobs bill that invests … in infrastructure, then that’s something that I’ll look to figure out how I can support it.—

Echoing the message of Democratic leaders, Cardoza emphasized that the proposal is “not a stimulus bill, but a jobs bill.— He speculated that many Blue Dogs would support a job-creating package if it is paid for and doesn’t add to long-term debt.

“We’ve got to do something about jobs. If it means stimulating and creating the kind of jobs that will be right here … I think it’s positive for the American people,— Rep. Joe Baca (D-Calif.) said.

Baca said the only other way to generate revenue in cities is to raise taxes — and that option is not appealing to anyone. “I would rather have a stimulus bill than be raising taxes in each of our states, counties or cities … I think every city is going to say no— to a proposed tax increase, he said.

Democrats are still deciding among a mix of proposals for the bill, including job tax credits, infrastructure spending and assistance to states struggling under budget shortfalls. Speaker Nancy Pelosi (D-Calif.) has tasked committee chairmen with making suggestions about what should be in the package and may try to speed passage by avoiding separate committee markups.

In the Senate, moderate Democrats were equally unsure about whether they would support another stimulus.

Budget Chairman Kent Conrad (D-N.D.) said there may be a need for additional measures to revive the economy, but he said he wants to see it paid for in the long term.

Conrad said he would like to see an emphasis on infrastructure projects. However, he and other Democrats suggested there might be ways to accomplish that other than another stimulus package. “We certainly need a transportation bill,— Conrad said. “It’s critically important for the country.—

Sen. Ben Nelson (D-Neb.), a key moderate who helped shrink the first stimulus package, said high unemployment raises the question of whether more needs to be done, but he said he still doesn’t have much appetite for another big “stimulus.—

Nelson added, however, that the transportation bill is “a different story altogether— and “is going to be required in any event.— He said he would also like to see more measures to help thaw the credit freeze affecting small and medium-sized businesses.

Senate GOP leaders signaled that there could be room for agreement on some proposals with Democrats, but there are limits.

“I believe in building roads and having a modern infrastructure,— Republican Conference Chairman Lamar Alexander (Tenn.) said. But Republicans overall want to cut spending and the deficit, not add to it, he said, and another spending-heavy stimulus package is the “wrong direction to us.—

House GOP leaders, meanwhile, took shots at Democrats for appearing to make jobs a priority after months of being clobbered by Republicans over the unemployment rate.

“Well, I guess the switch is on,— House Minority Whip Eric Cantor (R-Va.) said. “The Speaker announced [Tuesday] she’s going to begin to focus on jobs. The White House also now has decided that for December we will finally be focusing on deficits and jobs and how it affects our families. We say, ‘It’s about time.’ I say, ‘You’ve got to be kidding me.’—

Still, Cantor said Republicans “welcome this news— and urged Democratic leaders to consider GOP proposals to stimulate the economy, such as business tax breaks.