Obama Fails to Make the Stimulus Sale

Posted June 25, 2010 at 5:26pm

President Barack Obama’s $50 billion local aid package hasn’t moved an inch since it landed on Congress’ doorstep earlier this month, facing stiff headwinds from fellow Democrats who view the request as a political misstep in a difficult election year.

Lawmakers have not responded well to the president’s June 12 letter. In it, Obama urged Congressional leaders to get behind a sweeping emergency aid bill — $23 billion to stem teacher layoffs and $25 billion for state Medicaid assistance — aimed at boosting the economy. House and Senate Democratic leaders were caught off guard by the request, and frustration with Obama has brewed ever since, according to several senior aides.

“I have no idea why he is trying to do this now. I seriously don’t,” said Rules Chairwoman Louise Slaughter (D-N.Y.), adding that there has been “no talk” about trying to advance the proposal in Democratic leadership meetings that she has attended.

Slaughter said many Democrats are still making the case back in their districts about how already-appropriated stimulus dollars are being spent, and the idea of advancing another massive spending measure — especially one that isn’t paid for — isn’t going over well. Congress passed a $787 billion stimulus measure in February 2009.

“Lord, I want to tell you right now, if this House tries to take up another major bill, I don’t know what we’re doing to do,” she said.

Rep. Earl Pomeroy (D-N.D.), a member of the fiscally conservative Blue Dog Coalition, said: “It’s too big to swallow. We need pay-fors.”

Rep. Henry Cuellar (D-Texas), also a Blue Dog, said that in addition to spending fatigue and re-election worries bearing down on Members, House Democrats are also wary of “falling on our sword” by taking a tough vote on something that will hit a wall in the Senate.

Freshman Rep. Gerry Connolly said the president’s push for more emergency spending “seemed utterly unmindful” of the fact that Democrats are already struggling to pass bills that are paid for, such as an unemployment insurance extension.

“We’re no longer in a recession; we’re in a recovery,” the Virginia Democrat said. “So now we do need to have a higher standard when we call for new spending. And that higher standard has to include, ‘What’s the offset?'”

Connolly added, “One can only conclude that this came out of the bowels of some shop in the White House that didn’t get vetted.”

A senior Senate Democratic aide agreed that Obama’s latest spending initiative couldn’t have come at a more difficult time.

“Republicans won’t even work with us to pass the unemployment insurance tax extenders bill, so I think the White House knows this is probably not the time to push us on another $50 billion,” the aide said.

The measure cleared the House earlier this month, but the Senate has failed three times — cutting its price tag each time — to advance the package amid concerns that it isn’t paid for.

At least one House Democratic leadership aide held out the possibility that Congress may be able to deliver on some of the teacher funds by drawing from unspent stimulus dollars.

“We are trying to get this money done,” the aide said.

But another senior House Democratic aide cast doubt on being able to deliver on the full amount, if any, since the White House’s handling of the matter was “so poorly played it’s unbelievable.”

“One letter does not $50 billion produce,” the aide said, citing “a lot of frustration” among Democratic leaders that Obama dropped a $50 billion bomb on them and has done little to follow up on the request.

“If they had lobbied hard and fierce a long time ago, maybe they would have gotten it. But they didn’t,” the aide said.

Top White House officials have rushed to defend the local aid measure.

White House Chief of Staff Rahm Emanuel said last week that the issue boils down to “a matter of sequencing” between moving on short-term efforts to speed up economic recovery now, followed by long-term efforts to improve the larger fiscal situation.

The reality for now is that “state and local governments, facing their financial situations, are laying off teachers. And it is the president’s view that it’s better to have teachers in the classroom than on the unemployment lines,” Emanuel said on ABC’s “This Week.”

And White House Senior Adviser David Axelrod earlier this month said that while the administration has made “great progress” in bringing about economic recovery, it is “clear we’re not out of the woods.”

The need for an emergency aid package sooner rather than later is because it prevents “the prospect that hundreds of thousands of school teachers, for example, are going to be laid off because of this crisis,” Axelrod said on NBC’s “Meet the Press.”

Obama does have a few supporters on the Hill. Liberal Democrats say now is the time to invest in a local aid package because it will put more people back to work.

“I’d support more if you ask me,” Congressional Progressive Caucus Co-Chairwoman Lynn Woolsey said. “For every dollar we spend on this, we are going to reap 100 times more.”

The California Democrat proposed two different ways to come up with offsets for the bill: bring the troops home from Iraq and Afghanistan or provide a robust public option as part of health care reform, something that she said would save $110 billion.

“It is absolutely essential that we create jobs,” said Rep. Barbara Lee (D-Calif.), chairwoman of the Congressional Black Caucus and member of the Progressive Caucus. She said that Obama’s proposal deserves immediate attention because of the high unemployment rate and that the only reason it hasn’t advanced is because Congress lacks the political will.

“I want to see some acknowledgment that this is an emergency,” she said. “I am just amazed and appalled that that value, that the moral imperative is not there.”