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New President’s Economic Plan Faces Numerous Congressional Hurdles

January 8, 2009 at 6:30 PM EDT
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President-elect Barack Obama's economic recovery plan may face significant resistance in Congress. Analysts discuss the hurdles the Obama proposal will likely encounter as he pushes his agenda on Capitol Hill.

JIM LEHRER: And now the congressional obstacles — real and imagined — awaiting President-elect Obama and his economic plans. Margaret Warner has that part of the story.

MARGARET WARNER: And for that, I’m joined by two long-time watchers of Congress: Thomas Mann of the Brookings Institution; and Norman Ornstein of the American Enterprise Institute. They co-authored the book “The Broken Branch: How Congress is Failing America and How to Get It Back on Track.”

So, welcome, gentlemen, once again.

Tom, what are the prospects or how hard will it be for President-elect Obama and Speaker Pelosi to get this done with the scope and the timing they’re talking about?

THOMAS MANN, Brookings Institution: Ironically, Margaret, the political obstacles to getting it done are not as daunting as the substantive ones. This is a massive bill. To try to lay out a detailed plan to spend $400 billion to $500 billion within a two-year period…

MARGARET WARNER: Per year, perhaps.

THOMAS MANN: Perhaps. But it really is a total — if it’s $800 billion overall, $500 billion in spending, maybe $300 billion in tax cuts, you know, that’s a lot of money. It’s not easy to accomplish.

So that while, yes, there’s controversy about the size of this, in some respects over the composition, I’d say the biggest obstacle is figuring out a responsible way in which you can write law that gets dollars spent quickly in ways that are not utterly irresponsible. That’s the biggest challenge.

MARGARET WARNER: But there are political hurdles here, are there not, too?

NORMAN ORNSTEIN, American Enterprise Institute: Yes, I wouldn’t be as sanguine about the political process, either.

You know, this is not the New Deal, when Franklin Roosevelt could come in and, with swollen majorities, sweep things through that were basically written in the White House or the Great Society with Lyndon Johnson. The political process, in many ways, is more dysfunctional.

Tom is right that the substance is tricky, but you’ve got to get this done with Republican buy-in. Without that Republican buy-in, especially in the Senate with that 60-vote hurdle and no guarantee you’ll get all your Democrats together, it’s not going to happen.

And you’ve got to get it accomplished through both houses in different forms. They had hoped originally to do this so that, when he got back from the inaugural parade on January 20th, he could go to the Oval Office and sign it. Now they’ve pushed it back to Presidents’ Day.

As you could see from Speaker Pelosi, the threat to her colleagues — no recess until we’ve gotten this done — is a sign of how tricky this is going to be.

And, you know, Bill Clinton had a much smaller package, the same number of members of Congress in 1993, same number of Democrats, and it took him seven months. This is going to be easier, but not easy.

Sense of urgency on the Hill

Thomas Mann
Brookings Institution
I think there is a sense of impending doom among many members of Congress, especially now because they're hearing it from all sides.

MARGARET WARNER: President-elect Obama's argument is things are so dire, we just have to move quickly. You heard -- and we ran excerpts -- every day that passes, there's a greater chance we might never get out of this. Do you sense on the Hill the same sense of urgency?

THOMAS MANN: I do, Margaret. I think there is a sense of impending doom among many members of Congress, especially now because they're hearing it from all sides.

That is, conservative, as well as liberal economists are saying we run the risk of falling into deflation, in depression that could keep us bogged down for many years. And so they are saying the greatest risk is to do too little. So, yes, we need to move in a very dramatic fashion, in spite of the huge deficits.

MARGARET WARNER: So what are going to be the problems? Let's take the Republicans first. If Barack Obama wants Republican buy-in -- as you said, that's very important -- what's going to be -- are they going to have demand? They clearly are.

NORMAN ORNSTEIN: They're going to have major demands. And I don't think they'll be nonnegotiable...

MARGARET WARNER: And substantively, is it that they want more in tax cuts and less in spending?

NORMAN ORNSTEIN: They want more in tax cuts. They want less in spending. That's to start with.

Keep in mind that, while we do have this sense of urgency, we had even a greater sense of urgency back before we had the TARP program, when we had the economy in direct freefall. And you had Congress drag its heels, indeed, the president's own party members.

So that won't be easy to satisfy those demands. They'd like less money involved here, even though many conservative economists say we need even more, and they want to tilt the package towards tax cuts. And within the tax cuts, they want to tilt it towards the business sector and the wealthier rather than to the middle class.

So you've got those. And then you've got a lot of Democratic issues, as well, including fiscal conservatives scared to death. The Congressional Budget Office said a $1.2 trillion deficit this year, 8 percent of the GDP. We haven't seen it since the Second World War. Will you get promises that we will keep our fiscal house in order over the long run?

And then you've got a lot of Democratic demands from individuals with their own preferences, ranging to having more money for energy, more for agriculture and the like. Not easy.

A negotiated bill

Norman Ornstein
American Enterprise Institute
We've got a president who comes out of the Senate, a vice president who comes out of the Senate, a chief of staff who was in the leadership in the House. They [...] are very much aware of the prerogatives and pride of Congress

MARGARET WARNER: That was an interesting tension in Jim's interview with Pelosi about, well, to what degree was this the Obama train and they were all going to get on board and to what degree Congress was going to work its will, I think she said twice?


MARGARET WARNER: I mean, will there be the same degree among, let's just say the Democrats, of, "Well, Mr. President, we think it ought to be written this way," and just writing it the way they want it? Or do you think there is going to be quite a bit of deference to him?

THOMAS MANN: A good deal of deference, but they will right the law. The plans now are, by the end of the week, early next week, they will have an action memo before them to make critical choices on the overall size, the balance between tax cuts and spending, the areas of spending. They're going to make that decision themselves.

MARGARET WARNER: And will this be negotiated between Republicans and Democrats? Or is this going to be a Democratic bill and then they try to get Republicans to buy in?

THOMAS MANN: You know, they're going to negotiate it. We're seeing right now on the Senate side, on the taxes, you've got direct involvement of Republicans and Democrats.

And you see the key committees for the spending, of course, are the Appropriations Committees. And David Obey and Daniel Inouye are meeting with their Republican counterparts to talk about the structure of this. And the same thing is happening with the authorizing committees.

MARGARET WARNER: And Pelosi seemed to be suggesting that. She suggested that they didn't expect to just spring it on the Republicans.

NORMAN ORNSTEIN: No, I think that's the case. And keep in mind we've got a president who comes out of the Senate, a vice president who comes out of the Senate, a chief of staff who was in the leadership in the House.

They, more than any president in recent times, more than since we had Lyndon Johnson and Hubert Humphrey, are very much aware of the prerogatives and pride of Congress and understand that, if you come up with a package, either out of the White House and demand that Congress accept it or among Democrats alone and then try and pick off stray Republican votes now, it simply will not work.

Whether you can make that work with a leadership in the House that has great difficulty pulling its own members along and a leadership in the Senate that's a little bit lukewarm about some of this, is going to be the interesting challenge.

But you've got a president who, while wanting to defer to President Bush up until now, now is acting like a president 11 days before he gets inaugurated.

Keeping earmarks out

Thomas Mann
Brookings Institution
There is a commitment by both Appropriation Committee chairs to keep specific earmarks out. I could see some sneaking in on the tax side of the package.

MARGARET WARNER: Finally, an issue that Barack Obama went back to again today: no earmarks, no pet projects. Now, you all have been studying Congress lo these many years. Do you think that's doable? Can they get a bill like this through without earmarks?

THOMAS MANN: Not perfectly, but there is a commitment by both Appropriation Committee chairs to keep specific earmarks out. I could see some sneaking in on the tax side of the package.

But the bigger problem is, you've got to get money spent. And sometimes they're going to have to write in specific, large projects for particular utilities. Some may see that as earmark; others see it as the only way to get these dollars spent quickly.

NORMAN ORNSTEIN: It all depends on the meaning of the word "earmark." And I think the fact is, whether they are written specifically in targeted terms into the law or not, there are going to be a whole lot of earmarks here.

Some of them will come from governors; others will come from members of Congress. But this isn't going to be done. You're not going to get $800 billion out there without having a lot of people have specific say.

MARGARET WARNER: For their districts. Tom Mann, Norm Ornstein, thank you both.

NORMAN ORNSTEIN: You bet, Margaret.

THOMAS MANN: Thank you.