| Pelosi brushes off candidate proposals |
| Posted: 01/17/08 08:04 PM [ET] | |
| Thanks, but no thanks. That’s the reaction House Speaker Nancy Pelosi (D-Calif.) gave to the stimulus packages being suggested by the 2008 Democratic candidates, two of whom are sitting senators. It’s not so much that they’re dead on arrival, Pelosi explained. It’s just that what works with the base on the primary campaign trail isn’t going to work with narrow majorities and a Republican White House. Pelosi is reaching out to Republicans in an effort to quickly pass a stimulus and rack up a badly needed win for Democrats. “I haven’t had an opportunity to review their proposals in detail,” Pelosi said at a news conference Tuesday. “While I respect the hard work that went into them, we will be working in a bipartisan way with Republican leaders of the House to find common ground.” House Majority Leader Steny Hoyer (D-Md.) said things might be different if the White House and Congress were all in Democratic hands. “When they become president, we look forward to working with them,” he quipped. |
Hopes Grow For A Quick Stimulus Plan To Try To Boost Flagging U.S. Economy
Jan. 17, 2008 (Investor's Business Daily delivered by Newstex) --
Just before Christmas, President Bush declared victory in a yearlong fight to cut $23 billion from Democratic spending plans for '08.
But the two parties may be ready to start singing from the same hymn book. Amid lackluster retail sales, rising joblessness and a tumbling stock market, optimism is running high that a quick agreement could come on an emergency spending package that may exceed $100 billion.
A Deal Within A Month?
House Majority Leader Steny Hoyer, D-Md., said Wednesday that he thinks a fiscal stimulus bill can be completed within 30 days.
"Bipartisanship is breaking out all over," Hoyer said.
Lawmakers are mulling various ideas, including more cash to the poor and unemployed, tax rebates for all, breaks for business and aid to the states.
The White House began publicly considering a stimulus package two weeks ago. In a speech last week, Bush suggested that his top economic priority was making his 2001 and 2003 tax cuts permanent.
By the end of the week, though, Treasury Secretary Henry Paulson was singing a different tune.
In an interview with Bloomberg Television last Friday, Paulson noted signs that the economy "is slowing down fairly rapidly."
From a policy perspective, he added: "We are looking at things that could be done quickly. Time is of the essence."
Paulson conceded that the Democratic Congress was unlikely to extend the Bush tax cuts.
"If something were to be done here, I think the focus would be on something that's temporary and that could get done and make a difference soon," he said.
The urgency expressed by Paulson is consistent with his increasingly aggressive role to stem the fallout from the housing crisis by twisting the arms of mortgage lenders to provide broad-based relief to subprime borrowers.
Lawrence Summers, a Treasury secretary under President Clinton, told Congress to pass a $150 billion stimulus.
"The risks here of 'too little, too late' are far, far, far greater than the risk of 'too much, too soon,'" Summers said.
Election-Year Response
Greg Valliere, chief political strategist at Stanford Washington Research Group, attributed the prospects for rapid action on a stimulus bill to two factors: "The economy seems to be decelerating rapidly, and it's an election year."
Polls of voters in the early primary states and across the country show that the economy has become the leading issue in 2008. In New Hampshire last week, 97% of Democratic primary voters and 80% of Republican primary voters said they were worried about the state of the economy.
The White House is fielding "a lot of calls from nervous Republicans who are justifiably worried about steep losses this fall," Valliere said.
While the exact shape of a stimulus bill is to be determined, the broad outlines are coming into view.
The liberal Center on Budget and Policy Priorities says that a stimulus package should target help to lower earners through an expansion of food stamps and an extension of unemployment insurance. A flat tax refund to all tax filers, similar to the 2001 rebate of $300 per person, also would be "effective as stimulus," the center said.
Experts disagree on the effectiveness of the 2001 rebate, sent out in the middle of the year's brief recession. One study found only 22% of those surveyed said they planned to spend the rebate. But a 2006 study found that two-thirds of the rebates were spent within nine months.
The Democratic presidential contenders have all laid out plans that include fiscal relief for state governments, which are facing cuts in health care spending and other programs in order to balance their budgets.
Some Democrats and like-minded groups are calling for other elements that may defy quick agreement, such as government spending on infrastructure and "green collar" jobs, a foreclosure bailout fund, and relaxed loan limits for government-backed mortgage finance firms Freddie Mac (NYSE:FRE) and Fannie Mae. (NYSE:FNM)
The Center on Budget and Policy Priorities says government-funded construction projects take too long to get going to make any difference.
Missouri Rep. Roy Blunt, the second-ranking House Republican, said a stimulus bill is doable as long as it doesn't include offsetting tax hikes "and doesn't become an excuse to do other kinds of things that don't have much to do with stimulating an economy."
A business component of the stimulus bill is also likely. It could include accelerated depreciation to give small businesses an incentive to make investments sooner than later.
Valliere said another "hot idea" would let companies write off more operating losses.
Newstex ID: IBD-0001-22311870
Originally published in the January 17, 2008 version of Investor's Business Daily.
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