Recession Worries Are A Capital Concern on Capitol Hill
Wednesday, January 16, 2008SUSIE GHARIB: Worries about recession took center stage in Washington today. Lawmakers in the House of Representatives met to talk about a plan to inject money into the U.S. economy. Then the White House said President Bush will talk tomorrow with congressional leaders about new economic growth policies. While Democrats and Republicans agree on the need for fiscal stimulus, there is great debate on the best way to deliver it. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Yes, but. That was the attitude of members of Congress as they considered the merits of an economic stimulus plan today. Yes, we want a plan, but it depends on what's in it. Democrats say yes to more spending on government projects and tax rebates for middle class consumers, but New York Senator Charles Schumer says no to permanent tax cuts.
SEN. CHARLES SCHUMER, (D) NEW YORK: Renewing the Bush tax cuts, which don't expire until the end of 2010 should be off the table, because they will thwart any chance of passing a stimulus passage.
GERSH: Many Republicans say the Bush tax cuts helped head off economic weakness before and making them permanent would do so again now. New Jersey Republican Jim Saxton says this is not the time to increase economic uncertainty.
REP. JIM SAXTON, (R) NEW JERSEY: To send the message that we are automatically going to reject the notion of continuing the tax cuts that are currently in place past 2010 seems to me that because of expectations on the part of people who are making plans for their investments today, seems to me that that would be a very bad mistake.
GERSH: At a rare meeting with Republicans, House Speaker Nancy Pelosi downplayed divisions, calling for a bipartisan plan.
REP. NANCY PELOSI, HOUSE SPEAKER: One that we can work with the White House on, that would be timely, targeted and temporary.
GERSH: On his web site, House Republican leader John Boehner calls for extending the Bush tax cuts and adding new ones, but he was talking cooperation publicly.
REP. JOHN BOEHNER, MINORITY LEADER: With the crisis underway in the housing market, I think it's appropriate that Congress respond and I'm hopeful that we can come together in a bipartisan way.
GERSH: Many economists are not sold on the need for a stimulus. The evidence on the 2001 tax rebates shows the money helped boost spending, though a third of it may have ended up in savings accounts. Economist Nada Eissa adds that the timing of the last stimulus package was also uneven.
NADA EISSA, ASSOC. PROFESSOR, GEORGETOWN PUBLIC POLICY INSTITUTE: We got the rebates in on time, the tax rebates, but the bonus depreciation kicked in after the end of the recession, so it is a significant hurdle to say that we can get this stimulus package in on time.
GERSH: Former Clinton Treasury Secretary Lawrence Summers told Congress it would be best to enact a stimulus plan within two months. It would be OK if it was done around Memorial Day and not worth the bother if it took much longer than that. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
