Tough road for stimulus

Bloomberg

The U.S. House passed President Barack Obama’s $819 billion stimulus package without any Republican votes as lawmakers remained divided over whether the plan would do enough to pull the economy out of recession.

The 244 to 188 vote Wednesday sends the measure to the Senate, where Republicans will have more power to demand changes. They are calling for more tax cuts, less spending and a bigger focus on housing. The chamber is likely to begin work on the plan on Feb. 2. The stimulus measure is separate from the administration’s plan to shore up the banking system, which may cost in excess of $1 trillion.

Obama on Wednesday urged lawmakers to work out their differences in the next few weeks, saying delay in passing a final bill would cost more people their jobs. "The plan now moves to the Senate and I hope we can continue to strengthen this plan before it gets to my desk," he said in a statement after the House vote.

In comments to reporters, he said, "The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that their job will be next on the cutting blocks, they need help now. They are looking to Washington for action."

Obama had traveled to Capitol Hill earlier this week to lobby for Republican support for the stimulus bill, an effort that included a private session with the party’s House members. He failed to win any converts. In Wednesday’s vote, all of the 244 "yes" votes came from Democrats. Voting "no" were 177 Republicans and 11 Democrats.

The stimulus package, equivalent to one-quarter of the entire federal budget, is aimed at resuscitating an economy that lost 2.6 million jobs last year. The House plan would provide a $500 payroll tax cut for individuals along with $604 billion for infrastructure projects, jobless benefits, education programs, aid to struggling state governments and scores of other initiatives.

Slight amendment
The plan grew slightly from $816 billion during House debate on it Wednesday when lawmakers approved an amendment budgeting an additional $3 billion for transit projects.

The Senate version of the stimulus bill already differs from the House plan. The Senate Finance Committee voted this week to add a $70 billion alternative-minimum tax cut to the package.

Lawmakers in the two chambers also differ over how much to spend on highway projects, renewable-energy tax breaks and expanding access to broadband.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said the House plan doesn’t include enough tax cuts and that many of them that are in the bill would go to those who don’t pay federal income taxes. He said Republicans want to add provisions aimed at fighting the housing crisis by having the federal government back fixed-rate 4 percent mortgages.

The nonpartisan Congressional Budget Office estimated this week that by the end of 2010, the House bill would pump into the economy about $526 billion, slightly less than two-thirds of the package.

The agency said the plan would provide a "substantial" boost to the economy, estimating it will increase the U.S. gross domestic product by 1.2 percent to 3.5 percent by the fourth quarter of 2010 and create between 1.2 million and 3.6 million jobs.