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Capitol Hill Reacts to Stimulus

Government Relations Update - Economic Stimulus

Reaction on Capitol Hill appeared both cautious and mixed yesterday after the House released details of the $825 billion American Recovery and Reinvestment Plan (ARRP), signaling that lawmakers on both sides of the aisle have yet to fully digest the myriad details of the massive spending bill.

House Appropriations Chairman David Obey (D-WI)—the chief architect of the legislation’s $550 billion spending portion—described the ARRP as “simply the largest effort by any legislative body on the planet to try to take government action to prevent economic catastrophe,” but grimly warned that it may be “insufficient alone” in turning around the nation’s crippled economy. 

On the Republican side, the strongest language yesterday came from House Minority Leader John Boehner (R-OH), who chastised his Democratic colleagues for its “flawed notion that we can borrow and spend our way back to prosperity,” calling into question a host of domestic projects that he considered extraneous spending. 

But conversely, several prominent GOP members praised the ARRP, especially for its inclusion of $275 billion in tax incentives, with Minority Whip Eric Cantor (R-VA) describing the tax package as “music to the ears of House Republicans.”  Senator Lindsey Graham (R-SC) also said “the package of tax cuts is probably the most important thing he [Obama] did in terms of getting Republican support.”

The varying reaction on Capitol Hill is exposing the President-elect’s delicate balancing act between appeasing rank-and-file Democrats with large-scale domestic spending and, at the same time, enticing Republicans with tax provisions in order to achieve his goal of garnering 80 votes in the Senate and signing a bill into law by mid-February.

During a meeting yesterday with Obama senior advisor David Axelrod, the incoming national economic adviser Lawrence H. Summers, and incoming chief White House lobbyist Philip Schiliro, Senate Democrats expressed sharp differences over the bill’s perceived emphasis on tax cuts over domestic investments such as building and repairing American infrastructure.  Joining the chorus were House Transportation and Infrastructure Chairman, James L. Oberstar (D-MN) and Ranking Member John L. Mica (R-FL)—who criticized the ARRP’s $63 billion transportation package for being significantly smaller than Oberstar’s earlier draft proposal of $85 billion.

However, Axelrod remained confident following the meeting that contrasting stimulus demands can be resolved through further negotiations. “Obviously, it’s a big answer to a big problem and there are a lot of component parts to it,” said Axelrod. “It’s a collective process, and we’re willing to listen to people’s ideas.”

Chairman Obey said he plans to mark up the ARRP’s spending portion on Jan. 21—setting up floor debate for the following week—while in the Senate, Appropriations Chairman Daniel K. Inouye (D-HI) said his panel will hold an ARRP markup on Jan. 22 with the hopes of drafting a reviewable bill by Friday.  Neither the Senate Finance or the House Ways and Means Committees have announced markup dates for the tax portion of each body’s respective bills. Democratic leaders have indicated that if the stimulus bill is not completed by February 13, Congress will remain in session.

 

Notice: The purpose of this newsletter is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This alert should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel