The Senate today passed an economic stimulus bill that President Obama and congressional Democrats called crucial to pull the U.S. economy out of its downward spiral but that drew scant support from Republicans.
The Senate vote came as Treasury Secretary Timothy F. Geithner announced a vast new rescue plan for the financial sector. Stocks plunged following the unveiling of the program to use $1.5 trillion or more in public and private funds to bail out banks and financial institutions and thaw frozen credit markets. The plan would create a $500 billion fund to buy up toxic bank assets such as bad real estate loans and commit up to $1 trillion to reopen lending markets for consumer, student, small business, auto and commercial loans.
The Dow Jones industrial average was down 383 points in afternoon trading. The tech-heavy Nasdaq plummeted 63 points, and the Standard & Poor's 500-stock index dropped 43 points.
A procedural vote in the Senate yesterday cleared the way for final passage today. In that 61-36 vote, the same three moderate Republicans senators -- Susan Collins and Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania -- broke with their party leaders and supported the legislation.
The three joined all 56 Democrats and two independents in voting for the bill today. One Republican senator, Judd Gregg (N.H.), who has been nominated by Obama to be the new commerce secretary, did not vote.
The package now heads to a House-Senate conference to resolve differences between the two versions. Obama, who hopes to sign the resulting bill into law before Presidents' Day on Monday, has publicly encouraged negotiators in recent days to restore some education provisions that were stripped from the Senate version to reduce its overall cost.
Obama continued lobbying for the bill today on a visit to Fort Myers, Fla., which had the highest foreclosure rate in the nation last year.
As he was speaking at a town hall meeting, he was handed a note from press secretary Robert Gibbs informing him of the Senate vote, and he announced the news to the crowd, sparking loud applause.
"That's good news," Obama said. "It's a good start."
The president was introduced in Fort Myers by Florida Gov. Charlie Crist, one of the few Republicans backing the stimulus plan. Crist, bucking complaints from conservatives who say the plan costs too much and does not include enough tax cuts, praised Obama yesterday for continuing to "work hard to reignite the U.S. economy."
In a speech before taking questions at the Fort Myers meeting, Obama said Crist and other governors and mayors across the country share his conviction that creating jobs and rescuing the economy transcend party affiliation.
Obama, speaking a day after a similar appearance in Elkhart, Ind., said the stimulus plan "will save or create up to 4 million jobs over the next two years, ignite spending by business and consumers alike and make the investments necessary for lasting economic growth and prosperity."
He said the package "includes $1,000 of badly needed tax relief for middle-class workers and families," as well as "a partially refundable $2,500-per-student tax credit" to help families send their children to college.
"Most importantly," Obama said, "this plan will put people to work right now by making direct investments in areas like health care, energy, education and infrastructure -- investments that save jobs, create new jobs and new businesses and help our economy grow again."
Senate Majority Leader Harry M. Reid (D-Nev.) said after today's vote that House and Senate conferees would start working immediately to resolve differences. "I think the differences really are fairly minor," he said. "I think we can get most of our work done in the next 24 hours."
Reid said he and House Speaker Nancy Pelosi (D-Calif.) met with Obama early this morning and heard his views on what should be in the final bill. "His differences with the bill we have here are very, very minimal," the Senate Democratic leader said.
Senate Minority Leader Mitch McConnell (R-Ky.) told reporters after the vote that the legislation could cause government spending as a percentage of gross domestic product to rise from about 21 percent in 2008 to nearly 40 percent in 2010, similar to levels in Europe.
"This paints a picture of the Europeanization of America," he said.
In debate before today's vote, McConnell sought to distance the legislation from Obama, who is riding a wave of post-inauguration popularity. He said Republicans had expected Obama to be the author of the stimulus plan. Instead, "it ended up being written by some of the longest-serving Democrats in the House of Representatives, and it showed," McConnell said.
He charged that "Senate Democrats produced a bill that fell so far short" that an eventual compromise "wasn't much better than the original House or Senate bills." Even more worrisome to Republicans than the bill's spending provisions, he said, was "the permanent expansion of government programs" it entails.
"The president was right to call for a stimulus, but this bill misses the mark," McConnell said. "It's full of waste. We have no assurance it will create jobs or revive the economy. The only thing we know for sure is that it increases our debt and locks in bigger and bigger interest payments every single year. In short, we're taking an enormous risk -- an enormous risk -- with other people's money. On behalf of taxpayers, I won't take that risk."
Sen. Charles E. Schumer (D-N.Y.), speaking on behalf of the bill, said that although the nation is edging into a "recessionary spiral downward" that could become a depression, "the other side is still adamantly sticking to policies that don't work."
He said that Democrats "bent over backward" to accommodate GOP views but that they were "drawing the line at continuing the very policies" that led to the current crisis. He also pointed out that the two largest amendments to the bill were added by Republicans: a $36 billion homebuyers' tax credit promoted by Sen. Johnny Isakson (Ga.) and a $70 billion patch to the alternative minimum tax authored by Sen. Charles E. Grassley (Iowa). Yet neither senator voted for the overall bill, Schumer said.
In addition, he said, "lots of the little porky things" that Republicans objected to in the bill have been removed. These items, such as funding to spruce up the Mall, were "excuses," since their removal still did not attract GOP votes, he said.
"The sad fact . . . is that unless the bill is all tax cuts, mostly for the wealthy, and has almost no spending, the other side will never vote for it," Schumer said. He vowed, "We will not be diverted. . . . We will not sacrifice the focus of this bill -- jobs, tax cuts for the middle class and infrastructure -- for anything."
Shear reported from Fort Myers, Fla.
Wednesday, February 11, 2009
Senate Passes $838 Billion Economic Stimulus Bill
The question remaining is "will the package be unimaginably huge or just extraordinarily huge." There is no more debate about the wisdom of the package. The only debate remaining is which special interest group that will owe future political favors will be left out.
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