House Passes $146B Stimulus Package but Senate Eyes Changes to Bill

We talk tonight to two of the senators who would like to see some changes: Democrat Blanche Lincoln of Arkansas, who is a member of the Finance Committee, and Republican Johnny Isakson of Georgia, who serves on the Small Business and Public Works Committees.

Senator Lincoln, we heard what President Bush said last night. He said, let's do it now. Let's not load it up.

Why not just pass the House-passed bill in the Senate?

SEN. BLANCHE LINCOLN (D), ARKANSAS: Well, for several reasons. And he's right. It has to be timely. It has to be targeted, where it's going to make a difference to the GDP of this country and really get our economy back on track.

But there are a few folks that were left out in that House bill. And I think Chairman Baucus has worked hard to make sure that we are not going to drag our feet, but we don't want to leave out seniors. And seniors were left out of the House package.

Senior retirees were left out. Also, disabled veterans were also left out of the House package. So, we want to make sure that without a doubt we are targeting it. We are doing it timely. We are going to mark it up in Finance tomorrow and get it to the floor tomorrow evening, but making sure also that we don't leave out some very vital people in our economy who want to participate in revitalizing this economy.

We know seniors will do it. We know that disabled veterans will as well.

GWEN IFILL: Senator Isakson, your take on that same thing. Why not just pass what the House sent you?

REP. JOHNNY ISAKSON (R), Georgia: Well, I think every member of the Senate would probably take a different approach than the House might have taken.

I certainly have introduced some legislation today which will be focused on tomorrow in terms of overall reform in terms of the mortgage market and targeting tax credit to buy those homes that are staggering and are staggering our marketplace and depressing our prices.

However, I must say, the House bill, agreed upon with the White House, is strategically surgical. It does put money in the hands of the consumer. It does advance both expensing and depreciation to small business. And it does partially address the mortgage industry problem by raising Fannie Mae, Freddie Mac, and FHA limits.

In the end, we should not protract the debate. We should move swiftly because in the end the people want the Congress of the United States to come to a bipartisan agreement.

GWEN IFILL: Senator Lincoln, I want to start with you, but ask you both about what you said is missing in your case, something for veterans, something for seniors. What is it that you would do to fix that, and how could you keep the bill strategically surgical, as Senator Isakson has said?

BLANCHE LINCOLN: Well, I think we have already begun to do that in the Senate Finance Committee.

We have been able to figure out a way through the Social Security income line on a tax reform that seniors could actually access it, because seniors don't really declare income lots of time, so they don't file a form. They would have to file a form in order to get the rebate.

With the veterans, we were able to work with the IRS to talk about -- there are 2.8 million veterans right now in this country that receive a disability payment. We would be able to also work through an extra line through the IRS where they could file on a file. They would have to file in order to get that rebate.

But I just think those are two sectors of our economy and of our constituency that are critically important to include in this process. Now, like Senator Isakson, I think absolutely home mortgages are something we should deal with. I don't think it provides necessarily the immediacy in terms of stimulating the economy.

But without a doubt we need to have a second bite at this apple and look towards capital investment in terms of stimulus, and put together another bill, move quickly on that as well, so we can see some of those types of investments that will really make a difference in the long-term strength of our economy. But those two individual groups in my opinion are very critical not to be left out.

JOHNNY ISAKSON: Well, in the mid-1970s, we faced this problem before, and Congress asked -- responded quickly by passing a $6,000 tax credit spread over three years for the purchase of any standing new house in America. We had a three-year supply, accelerating interest rates and a depressed housing economy, causing a recession.

What we are going to have to do now is find a way for the public and the consumer to absorb this large number of houses that will be coming on the market. If we don't, you're going to have a suppression in values. It is going to make the consumer confidence much lower and could have a compounding effect.

But I think, in the end, Blanche, Senator Lincoln, just hit on the second bite of the apple. I think, in the end, that's what you are going to see here, ideas crystallizing around what part two should be to address the long-term consequences of what may be in front of us.

GWEN IFILL: Let me bounce some of the other ideas off of you, Senator Lincoln. There has also been a proposal to increase food stamp coverage. There has also been a proposal to extend unemployment insurance benefits. Do you favor those or is that...

BLANCHE LINCOLN: I do. I think...

GWEN IFILL: ... loading it up, as the president was suggesting?

BLANCHE LINCOLN: Right.

I think -- well, I don't think it is a Christmas tree just because we are adding unemployment benefits. We are seeing an increase in our unemployment rates in almost all of our states. We certainly are in Arkansas. And we know that if we limit that amount and we limit the time that we provide that extension of unemployment benefits, it's going to help those that have traditionally been working families in America provide for their families.

They're going to spend those dollars out there in the consumption market. When you talk about food stamps, there is a tremendous need to update food stamps. But, in the meantime, this is an excellent way. Eighty to 85 percent of the food that we purchase or that people get in this country is either processed or grown in this country.

So, these are ways that we can look at stabilizing and investing in American jobs, and providing families a much-needed something in their Household, sustenance of life. So, I think nutrition and food stamp programs are a quick way. All of the analyses have told us that both food stamps and unemployment benefits, again, if it is limited in a way that we use it as an immediate stimulus, those are excellent ways to get dollars back into the economy.

And let's face it. Seventy percent of our GDP is consumption. We have got to get there.

GWEN IFILL: Pardon me.

Senator Isakson, one of the things when the president talks about loading things up, and, in fact, your House counterparts talked about today in trying to urge you to pass this without making changes, is that there are a lot of things which, in an ideal world, a lot of people would like to see get done. And the question is whether this is the vehicle to get them done in an economy that is struggling right now.

JOHNNY ISAKSON: Well, let me -- I will just take Senator Lincoln's points and give you a second perspective.

If you extend unemployment benefits at a time in which unemployment is 5 to 5.2 percent, then are you taking at approach you are going to have the extended benefits 80 to 90 percent of the time in America. And I think that is a far too liberal approach.

Secondly, we have got a farm bill that if we would finish greatly expands our nutrition programs, and deals with in fact what we need to do in terms of food stamps. The real pressure on this Congress is to begin to coming to some agreements to do something, rather than arguing about what everybody else wants to do.

We need the farm bill done. We need to come together on appropriations. We need to deal with this issue before us quickly and then look at the second bite of the apple during the course of the year as things develop.

BLANCHE LINCOLN: Well, that's one of the reasons we all believe that we should keep this package at a reasonable price; 150, I think was -- the House bill was 146 or something. Ours was 150. We have got to keep it at a reasonable cost, because you are right. Long-term problems that could occur through long-term debt is something we don't want to disrupt, putting an imbalance in the budget.

Senator Isakson knows he will not get an argument out of me in terms of getting that farm bill passed. It is a tremendous stimulus for rural America, in terms of working families and what they get out of that. It is tremendous in that farm bill. And he's right. We have got to get about coming together and moving some of this legislation, S-CHIP legislation, health care for -- and health insurance for children, looking at an energy package, making sure that we're seeing businesses that have the tax incentives to invest in new technologies and renewable energies.

There's a lot of things that we need to do that could be a part of that second bite of the apple. But you're right. It's not something that we're going to do without paying for it. We have to start looking for the ways that we are going to be able to afford those things.

GWEN IFILL: Let me ask Senator Isakson, then, how do you pay for it? It is one thing to say that you ought to and that you should, but she just -- you just unspooled a long list of wish lists there.

JOHNNY ISAKSON: Well, in the end, we need to continue to stimulate the economy and consumer spending to drive the U.S. economy.

President Bush, I think demonstrated, in '01 and '03, with surgical and tactical tax cuts, that we can really invigorate revenues and actually raise revenues while lowering rates. We are in a time now where there is uncertainty over that. And I think that is contributing to some of our economic uncertainty.

So, along the way, you need to stimulate the consumer and invigorate American free enterprise. That will bring in more text revenues, which, in the long run, will pay the bills.