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Senate Leader Calls for Economic Stimulus Package After Elections

00:00AM Oct 16, 2008

via a special arrangement with Informa Economics, Inc.

Fate of stimulus proposal depends on election results, and President Bush

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Senate Majority Leader Harry Reid (D-Nev.) joined the Democratic House leadership in urging Congress to return following the elections to take up another economic stimulus proposal.

The latest package would center on spending for infrastructure projects, aid for states, energy assistance for the poor and extended unemployment benefits.

House Speaker Nancy Pelosi (D-Calif.) has asked House committee chairmen to hold hearings on what could be included in the stimulus package and the Budget, Ways and Means, Education and Labor, and Joint Economic panels plan to hold sessions in the coming weeks.

Reid also emphasized a desire to reform bankruptcy laws to prevent housing foreclosures, to cut taxes for middle class families, as well as his proposal to use the tax code to encourage companies not to move operations overseas.

Reid’s office said he would like to see a package costing about $150 billion considered during the lame-duck session. The latest House Democratic proposal would cost up to $300 billion, but House leaders are said to favor a plan around $150 billion. Importantly, Republicans and the White House do not support moving a stimulus bill that large, and the fate of any stimulus package being enacted yet this year is murky at best.

Background: In late September, Senate Republicans objected to considering a $56.2 billion package (S 3604) with spending for many of the items Democrats would like to include in a larger economic measure. An economic stimulus package was enacted in February that focused heavily on rebates (PL 110-185), and Pelosi expressed reservations Monday about including them in a new stimulus package. “We have done that,” she said. “There’s some discussion as to how effective it was, how much bang for the buck. But certainly they would be in the mix of consideration. But first we want some of the issues that were not dealt with in the last package, because we want this to truly be a recovery package.”

Comments: President Bush’s resistance to an economic stimulus package could lead Democratic leaders to allow a vote on the U.S.-Colombia free trade agreement (FTA) to win his support for the stimulus measure, some say. However, a lame-duck Congress is rarely productive. In April, the House voted 224-195 to no longer require quick action on an FTA once the president submits it to Congress. At that time, Pelosi said a vote on the pact was contingent on Bush supporting her economic initiatives.

But should the Democratic Party win as many congressional House and Senate seats as current election polls suggest, any major topic could wait until the new Congress.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.