The Senate Stimulate Package Showdown
Monday, February 02, 2009SUZANNE PRATT: The Senate opened debate today on an economic stimulus package that is getting closer to the $1 trillion mark. President Obama met with lawmakers today to try to keep the massive effort on track. But as Darren Gersh reports, there's a growing debate about changing the bill to make it more effective.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The president is optimistic a stimulus bill could be on his desk in a matter of weeks.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What we can't do is let very modest differences get in the way of the overall package moving forward swiftly.
GERSH: But it really depends on your definition of modest. As the debate started in the Senate, Republican leader Mitch McConnell was pushing for a greater focus on tax cuts over spending and he also offered a new suggestion.
SEN. MITCH MCCONNELL, MINORITY LEADER: We believe, Republicans, that a stimulus bill must fix the main problem first and that's housing. That's how all of this began. We think you ought to go right at housing first.
GERSH: The Republican plan calls for government financing to bring home mortgage rates down to 4 percent. The authors of the plan figure 40 million homeowners would qualify, saving each an average of $424 a month. Republicans believe taxpayers might come out ahead on the deal, since the government can now borrow at 2.5 percent. But independent estimates say it could cost the government $20 billion a year or more. Barney Frank, the chairman of the House Financial Services Committee, gave the idea a cool reception.
REP. BARNEY FRANK, CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: An absolute subsidy for every borrower in America regardless of income, I think is a very expensive program.
GERSH: There is a very good reason the stimulus is attracting so many proposals both extremely large and small. As budget hawk Maya Macguineas points out, this may be many a lobbyist's last hope.
MAYA MACGUINEAS, PRESIDENT, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: There are not going to be that many vehicles which will actually bring taxes down or spending up, because we're just going to have run out of fiscal space to pay for all of these things. So everybody and their lobbyist is fighting to get their favorite items on to the stimulus train before it leaves because who knows when the next chance will be.
GERSH: It is widely expected the stimulus plan will top $900 billion as it moves through the Senate. Likely additions include a patch for the alternative minimum tax and a doubling of the home buyer tax credit to $15,000. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
