logo
Plus   Neg
Share
Email
Comment

Congressional Democrats Plan Another Economic Stimulus Package

NancyPelosi-101308.jpg

Congressional Democrats are looking to craft a second round of economic stimulus measures to bolster the country's flagging economy. The proposal will largely focus on infrastructure investments and aid to the states, the top lawmaker in the House of Representatives said, though other proposals remain on the table as well.

Following the passage earlier this month of a controversial $700-billion financial relief bill that was proposed by the Bush Administration and passed by Congress largely with Democratic support, Democrats plan to push their own priorities in this stimulus plan, which could be on the docket for consideration when Congress meets after the election in November.

House Speaker Nancy Pelosi, D-Calif., who announced the plans following a meeting with several noted economists, offered few specifics of the proposal.

But, giving a broad outline of what was on the table, she stated that the proposal focused on infrastructure investment, aid to states and other measures that would have the greatest impact with the least cost.

Pelosi would also not rule out the prospect of direct tax rebate checks or tax credits that were contained in the first round of economic stimulus measures earlier this year, but seemed to approach the idea with caution.

Pelosi stated that the plan would contain proposals to assist states with infrastructure projects and to provide help with health care for seniors and children.

The proposal would also include measures aimed at stimulating so-called "green collar" jobs, or those dealing with the environmental sector. There might also be provisions to expand food stamp and unemployment benefits, Pelosi said.

"We're at a time when we have to tighten our belts, take ourselves into survival mode," Pelosi said. "We plan to go forward expeditiously, but not hastily. … We cannot be steamrolled into acting. We must have hearings into the size and nature and particulars of the recovery package."

Pelosi said the proposal would contain measures similar to an earlier bill that passed the House. The previous bill was eventually bottled up in the Senate and faced the threat of a presidential veto.

The House speaker said she hoped the deepening financial crisis would provide an opportunity to move the measure forward, "so we take advantage of the opportunities this crisis poses."

And although Pelosi said she hoped the proposal would draw bipartisan support, it was clear that in the aftermath of tough negotiations that marked the recent financial relief package, she had no intention of backing down from Democratic priorities.

"We would hope to do this in a bipartisan way but the last time we did that in a bipartisan way it was a largely Republican package with largely Democratic votes," she said.

The Democratic proposals, which seemed to garner the broad support of the economists assembled Monday, raise the potential of a "lame duck" congressional session held after the November election but before the new Congress and President take office in January.

However other items at the top of Democratic leaders' agenda, including revamping financial regulations and establishing rules for complicated financial instruments like credit default swaps, might have to wait until next year.

Rep. Barney Frank, the chairman of the House Financial Services Committee who will oversee the new regulatory proposals, said the results of the November elections might not sway many members of Congress who presently oppose such measures.

"Losing an election rarely has a good effect on one's personality. It doesn't generally tend to make a person more agreeable," he said.

Still, Frank predicted that Congress would eventually pass new regulation for financial institutions.

"I do think the country is ready for this. I think this is the issue; reality has bitten hard against this lack of regulation," he said.

Frank added, "After the election, in the next Congress, I do not think we're going to see totally unregulated credit default swaps or overly leveraged institutions. … I think you're going to see sensible regulation."

Earlier this month, Congress passed a massive financial relief bill as part of a string of government interventions in the financial markets. This came after a housing slump made it difficult for financial institutions to unload massive bets they had made on the U.S. mortgage market, leading to many high-profile collapses and leaving many other institutions teetering on the verge of bankruptcy.

The financial relief bill began as a proposal by Treasury Secretary Henry Paulson to buy up to $700 billion of mortgage-related assets in an attempt to relieve pressure on the country's battered financial institutions.

While the core of this plan remained intact, it was modified over the course of two weeks of negotiations between Bush Administration officials and House and Senate leaders on both sides of the aisle.

But in spite of the extensive negotiations the measure, and the support of Republican leaders, the bill failed in its first attempt to pass the House, due largely to a lack of GOP support. When it did eventually clear the House, by a vote of 263 to 171, it was still opposed by more than half of the House Republicans.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

comments powered by Disqus
Follow RTT