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Senate does not yet have votes to pass stimulus
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-- Timeline for Senate stimulus package:
Senate Majority Leader Harry Reid (D-Nev.) predicted Tuesday that the
chamber would work into this evening in an effort to complete the stimulus
bill (HR1) by the end of the week, with a hoped-for conclusion to a House-Senate
conference by the end of next week.
-- Senate Democratic leaders conceded yesterday
that they do not have the votes to pass the stimulus bill
as currently written and said that to gain bipartisan support, they will
seek to cut provisions that would not provide an immediate boost to the
Summers comments. USA Today reported that
National Economic Council Director Lawrence Summers said President Obama
is "willing to change elements of his economic stimulus plan to
meet objections in Congress, but he won't agree to increase its cost
significantly or weaken its impact."
-- Senate efforts to include a cut in fixed
rate mortgages in stimulus plan called too expensive: Senate
Majority Leader Harry Reid (D-Nev.) and Majority Whip Dick Durbin (D-Ill.)
said the GOP proposal to cut fixed rate mortgages to 4 percent would be
too expensive, costing at least $300 billion. But they signaled willingness
to compromise with Republicans on housing amendments and on a spending
cut. "I am the whip," Durbin said. "I count the votes.
I know the reality. We need Republican support to pass this measure. So
we are trying to find a way to reach 'yes.'"
Senate Minority Leader Mitch McConnell (R-Ky.) and other GOP
members said they want to heavily amend the bill to provide more tax
relief and help for homeowners. Lawmakers said the cost of
their plan would be $445 billion, including about $300 billion to help
the housing sector. McConnell declined to say how Republicans would
pay for those proposals, including whether they would be offset, but
he said the goal is to trim the bill and better target its provisions.
“Everybody agrees that there ought to be a stimulus package,”
McConnell said. “The question is, how big? And what do we spend
it on? The House bill is an embarrassment. The Senate bill on the floor
is not markedly better. Our goal is to pare it down and target it right
at the problem.”
Senate Budget Committee Chairman Kent Conrad (D-N.D.)
said he is scouring the bill for projects that do not meet the test
of job creation, with the goal of advancing an amendment that would
strip "in excess of $50 billion" from the package. "That's
our intention," said Conrad, who is reaching out to a wide number
of senators, including Republicans, in preparing the amendment.
-- Obama looking at altering 'Buy American'
language in stimulus package: President Obama on Tuesday
said he did not want to send a protectionist message on world trade and
would look at altering "Buy American" language in proposed economic
stimulus bills coming out of Congress. "I think it would be a mistake
... at a time when worldwide trade is declining for us to start sending
a message that somehow we're just looking after ourselves and not concerned
with world trade," Obama said on the Fox television network.
Background: The Senate’s version of the stimulus
(S 1) includes a House-passed provision that would require that only
US-made iron and steel be used in public works funded by the bill, with
certain exceptions, such as when the US product is not available in
sufficient quantity or quality, or would drive a project’s price
up more than 25 percent. The Senate version would also require that
only US-made “manufactured goods” be used in projects funded
by the bill.
The governments of both the European Union and Canada sent
letters to Congress on Monday urging the provision be dropped.
The European Commission said today that it had not agreed any deal with
the US to scrap its decision to subsidize EU dairy exports in return
for Washington dropping its "Buy American" provision. "There
is no deal. Barack Obama's decision to look at altering the Buy American
clause in no way affects the EU's dairy decision," a Commission
In a letter to Senate leaders, 100 companies and associations
warned Tuesday that the provisions “will backfire on the United
States.” The letter, whose signatories include Lockheed
Martin Corp., Northrop Grumman Corp. and United Technologies Corp.,
said the measures “will harm American workers and companies across
the entire American economy, undermine US global engagement and result
in mirror-image trade restrictions abroad that would put at risk huge
amounts of American exports.” In a Jan. 22 letter to leaders in
both chambers, 15 trade associations, including the Aerospace Industries
Association and the National Defense Industrial Association, argued
that the provisions risk shutting US companies out of stimulus packages
being written in other countries, violate US commitments not to erect
trade barriers during the global downturn and make public works less
efficient. If retaliation were to follow in foreign capitals, the $61
billion US defense and aerospace trade surplus — and the roughly
800,000 US jobs it sustains — could be at risk, said Cord Sterling,
a vice president at the Aerospace Industries Association.
On the international front, “If Buy America
becomes part of the stimulus legislation, the United States will lose
the moral authority to pressure others not to introduce protectionist
policies,” Michael Wilson, the Canadian ambassador to the US,
wrote in a Feb. 2 letter to Senate leaders. “A rush of protectionist
actions could create a downward spiral like the world experienced in
the 1930s.” “If we are going to handle the economic crisis
in a protectionist way, we are going to get less effective action,”
John Bruton, the European Union’s ambassador to the US, said in
an interview with Congressional Quarterly. “Protectionism simply
defeats the purpose of stimulus.”
A new study by the Peterson Institute for International Economics
found that the Senate bill’s Buy American provisions
would create about 9,000 US jobs. But the resulting retaliation overseas
would hurt US exports, costing at least 6,500 US jobs and perhaps upwards
of 65,000, the group said. “The Buy American provisions would
violate US trade obligations and damage the United States’ reputation,
with very little impact on US jobs,” the study concluded.
-- Price tag grows for Senate stimulus
package: Republicans agreed late Tuesday to an amendment
from Sen. Tom Harkin (D-Iowa) that would add $6.5 billion for the National
Institutes of Health, pushing the cost of the bill to $901.7 billion –
before interest costs are included. The House’s version, passed
without any Republican votes on Jan. 28, cost $819.5 billion, but did
not include a $70 billion alternative minimum tax “patch”
that Democratic leadership signaled the House would accept – nor
does it include around $335 billion in interest costs.
-- Car loan provision approved as Senate
amendment: Over the objections of Senate Finance Chairman
Max Baucus (D-Mont.) Republicans helped adopt an amendment from Barbara
Mikulski (D-Md.) that would create a temporary federal income tax deduction
for interest payments on car loans and for state excise and sales taxes
paid on new cars. The deduction would be available to individuals making
less than $150,000 or married couples making less than $250,000. Senators
voted, 71-26, to waive a budget point of order against the amendment.
Mikulski said her plan, adopted by voice vote after the procedural vote,
would spur auto sales, giving a boost to struggling auto manufacturers
and dealers. It would be available for purchasers of any cars made in
the US, whether by the Big Three automakers in Detroit or by foreign companies
operating US production plants. Baucus said the tax break, estimated to
cost $11 billion, was too expensive and encouraged consumer debt. “I
think there are other, better ways to help the auto industry,” he
-- Senate effort to boost infrastructure
spending defeated; another attempt ahead: A proposed infrastructure
spending amendment offered by Sen. Patty Murray (D-Wash.) was defeated
largely due to opposition from Republicans. The amendment sought to boost
the bill’s highway funding from $27 billion to $40 billion, its
transit funding from $8.4 billion to $13.4 billion, and its water and
sewer funding from $6 billion to $13 billion. Many Republicans objected,
saying they supported adding money for infrastructure but wanted it offset
with cuts elsewhere. Two Republicans — Kits Bond of Missouri and
Arlen Specter of Pa. — voted with the Democrats. Sen. Mary Landrieu
(D-La.) voted with the Republicans. Sens. Edward Kennedy (D-Mass.) and
Judd Gregg (R-N.H.) did not vote. Baucus, one of the floor managers of
the bill, said he expects another attempt to increase infrastructure funding.
“It’ll come back again,” he said.
-- Movie production company benefit defeated:
By 52-45, senators adopted an amendment by Tom Coburn
(R-Okla.) that deleted a provision allowing movie production companies
to benefit from bonus depreciation, like other companies.
Repatriation provision defeated: The Senate rejected an amendment to its
economic stimulus package that would have given a tax break to multinational
companies that brought foreign earnings back to the US.
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