Consensus: Senate majority leader Harry Reid speaks Wednesday about the final version of the economic stimulus bill, flanked by Sens. Susan Collins (l.), Max Baucus, and Arlen Specter (r.).
(Joshua Roberts/Reuters)Photos (1 of 1)
Accord reached on final stimulus bill: $789 billion for 3.5 million jobs
House and Senate negotiators crafted a deal Wednesday, pushing for floor votes this week. Tax cuts make up about a third of the total expenditure.
By Gail Russell Chaddock | Staff writer/ February 11, 2009 edition
Washington
House and Senate negotiators settled Wednesday on a $789 billion package of tax cuts and new federal spending meant to save the US economy from a deep recession, or worse.
The agreement, coming 26 hours after the Senate approved its version of the stimulus bill, now heads for up-or-down votes in the House and Senate.
The final plan expends $20 billion less than the House’s original version and $39 billion less than the Senate’s. Tax cuts for workers, including those who don’t earn enough to pay income taxes, still make up about one-third of the overall expenditure.
Senate majority leader Harry Reid, in announcing the deal, said the package would create 3.5 million jobs – more than the Senate bill and at less cost than the House bill.
Most of the $789 billion would flow into the economy during the next two years, though some would take 10 years to filter out to recipients. Economists debate whether that is soon enough to bring the economy out of its tailspin, though many agree the federal government has become the consumer of last resort and must act.
The deal followed intense, tough negotiations involving key House and Senate Democrats, the White House, and three Republican senators, whose votes are critical for passing the bill in the Senate.
“I’m pleased to announce we’ve been able to bridge those differences,” said Senator Reid, who, in an unusual move, named himself one of the conferees.
One key issue was settling on a top line. President Obama had asked Congress to pass a stimulus plan of about $800 billion. The House bill came in at $819 billion; the Senate’s version maxed out at $838 billion.
But with the swing votes to make or break the deal, the three GOP senators held the final bill to less than $800 billion. In the end, the compromise struck last Friday by a bipartisan group of moderates led by Sens. Susan Collins (R) of Maine and Ben Nelson (D) of Nebraska set the template for the final agreement.
“We hung tough, and it was modified only in the case of absolute necessity,” said Sen. Arlen Specter (R) of Pennsylvania, who along with Senator Collins and Sen. Olympia Snowe of Maine gave the bill its only GOP votes in the Senate.
GOP moderates insist this new government spending is only temporary. Beneficiaries of the new federal spending include the following.
• States will get at least $54 billion in aid to stabilize their own wobbly budgetary positions. They will have latitude – but not complete freedom – in deciding how to spend the money. Using it to repair and modernize schools, for instance, is permitted, but building new schools is not.
• People who lose their jobs will be eligible for extended unemployment benefits and help with health insurance coverage, and the food stamp program will be expanded. In a nod to the House, Senate negotiators agreed to a $90 billion increase in the federal match for Medicaid, as a temporary option for unemployed workers.
• Workers will see their income taxes cut, but details were still being worked out at time of writing. In addition, middle-income families who might have been hit by the alternative minimum tax this year will be able to avoid it, thanks to a $69 billion patch included in the final bill.
•School districts can expect $11.5 billion in additional special-education funding through the Individuals With Disabilities Education Act and $10 billion in new money for serving disadvantaged students. For low-income college students, there’s an increase in the maximum Pell Grant of $281 per pupil in 2009-10 and $400 in 2010-11.
The agreement cuts back, but still includes, a tax credit for home purchases for a year after enactment of the law. It also includes an above-the-line deduction for purchases of new automobiles.
Comments
3. John | 02.11.09
$789 billion for 3.5 million jobs? Excuse me, but there are 300 million adults in the USA. The jobs issue is a devious red herring. The real issue is the fact that nobody knows how the companies who received the billions in bailout money actually used it. For all we know it all went to the top executives in those companies as bonuses. CONGRESS did not hold the companies accountable. We do not have this kind of money to spend as a nation much less throw away. Where is the money coming from? The US government has been going into debt to China. Also the Federal Reserve, which is comprised of unelected officials, is printing more money, leading us into a hyper inflation, ruining the value of the dollar. That’s where the money is coming from. CONGRESS has voted over 195 times to give the unelected Federal Reserve more power since the Federal Reserve Act was passed. In essence, Congress has voted away all their authority and power to protect us.
4. jo | 02.11.09
The only way to get the economy going is to raise minimum wage to a living wage of about $15 an hour with colas and use the community colleges to have a lot more vocational careers that people can learn within a year or two. Things that people can get jobs at or become self employed doing after they learn it like plumbers, electricians, practical things. Doing both of those things, raising the minimum wage with colas and more vocational education really would build the economy from the ground up.
6. Micheal Trautman | 02.11.09
If they had paid that money directly out to 3.5 million unemployed people, they would have received around $225,000 each. Instead, it will “trickle down”.
7. Randy | 02.11.09
Let Capitalism work by cutting taxes across the board. Let Small Businesses survive. Let the bankrupt ninnie, cry baby, whiners restructure and get into the mainstream.
It was the greed of the Democrats in power who caused this by too much government. President Bush saw this coming, check out your past current events since 2005. The stimulus is just more government who caused the recession and will prolong the recession…….Let Capitalisms Free Markets do their job of healing the economy.
9. Brad | 02.11.09
Let’s do the math. $54 Billion for State bailouts, $90 Billion for Medicaid increases, $69 Billion Alt Minimum tax increase cuts, $11.5 Billion special education increases, $10 Billion for disadvantaged students. Where is the other $554,500,000,000 Billion going ?? ‘…the package will create 3.5 million new jobs’, Harry Reid. Yeah right. The only thing this stimulus bill is going to do is to create hyper inflation. Three years from now we’ll be thinking back to the good old days when a 1/2 gallon of milk was $3.00 and a can of soda from a vending machine was only $.75 cents. For those who are watching its apparent the idiots in Washington are clueless.
10. Fred | 02.11.09
The bill is all about building infrastructure. Building a new electric grid is building infrastructure so that we will be able to get solar and wind power distributed through out the entire country! That is the equivalent of when they built the railraod tracks accross America in Lincoln’s time. If republicans then were like republicans today the railraods would have bever been built!
11. Viejo | 02.11.09
Well gosh, this “court of last resort” has spend and enormous amount!
I believe it could have spent far less to keep our institutions functioning, but government in our society is necessary desease. Hopefully we will still be able to cash checks, and state governments will continue to meet their obligations, for a while.
As I see it, we all payed dearly to bail out state governments and municipalites, but little else. I do not believe the citizen will see any job growth, except government jobs. I know you have to expect a lot of losses when things are in this state of desperation.
Frankly, there is a good chance this Stimulus spending will end in disaster.
But… Nothng ventured, nothing gained. And we had no choice. This behemoth was crammed down our throats to maintain order. The next several years will test our honesty and integrity as a people. See you in the bread lines, if there are any. I’m very broke and wiped out. How about you?
12. Tom | 02.11.09
I have the same question that dave had above. What are the details on the housing credit?
Who qualifies ?
How much ?
What restrictions?
13. chuck | 02.11.09
I am from Maine. If my senators are responsible for eliminating the $15,000 tax credit for purchasing a new home, then I will not only never support them again, I will always support anyone that runs against them. That tax credit would have been, in and of itself, all the stimulus we would have needed. Housing has been in the outhouse for three years. That tax credit would have resulted in an immediate and significant bounce to our economy. The net gain on the tax revenue side would be significant as a result of jobs created across the employment spectrum. Painters, plumbers, Truck dealers, landlords of recently employed workers, lumber yards, truckers, etc etc. this just establishes, without any doubt, that the people in Washington that we send to represent us are completely out of touch with the rest of us. SHAME on them again.
14. albert wainwright | 02.11.09
They should give every house hold in America 50,000 to kick start the economy.
15. Kevin | 02.11.09
A large portion of economist agree that this will have a moderate short term impact, but the sure volume of debt we are passing on will have a negative impact on the future gross national product. This amount of debt will cause a stall on our countries fiscal future. As painful as it sounds letting the market re-stabilize, cutting taxes, and giving purchase incentives on homes and autos would be a step in the right direction.
16. Bruce K Bowman | 02.12.09
I agree why do our politicans not understand how the economy works. Take all the money congress has spent in the last year for bail outs and stimulus plans(so called) I bet you would realize each household in america would have received a check for $400,000. Now imagine 115,000,000 household having $400,000 I know what i would do first pay off my house (money to the banks) did they not do that. I would then do a remodel of my upstairs ($40,000) that would have created at least 10 jobs. Now those people have more money they create 10 jobs also. Oh yeah i would also buy a new automobile probably a ford (money to them also) Do you see where I am going with this and guess what we would not have a nationalize banking system a nationalized home mortgages a nationalized insurance industry. Our Government is crazy but the reason they are crazy cause now they have the opportunity to do what they have always wanted to do for well over 200 years moving this country more to a socialist/communist government(country). America please wake up this is happening every day more they give to corporate america the less we have as individuals and the more we go back into bondage
17. Hillary | 02.12.09
Republican’s view of the economy could be summed up in a few short phrases:
If it makes lots of money, lower its taxes, If it makes even more money, lower
its taxes even more. And if it stops making money, subsidize it with trillions
of taxpayer dollars. If the taxpayers ask for a nickel an hour minimum wage
increase, call them a bunch of socialists and kick their sorry butts out the dam door!
18. Cameron | 02.12.09
I sincerely believe this stimulus package is packed with money that is intended to make up for the loss of revenue that was the result of a failed bailout package. To expound further, the biggest problem with the bailout package was the fact that no one, to include the Treasury, could assess how much banks troubled assets are worth. Instead of doing the math and arriving at a real number, the Treasury department opted instead to throw money at the problem. How much? 254 billion dollars to be exact. This money was supposed to be given to companies in exchange for stock. Then came the golden parachutes and random bonuses. The result? Out of the 254 billion dollars in fresh capital we gave corporations, the government only got back 176 billion dollars worth of stock. The stimulus, whether anyone will admit it or not, has that net loss squeezed in here somewhere. Meanwhile, the dollar is strengthening (for now) causing international sales to plummit and endangering the dollar to the “nth” degree. This package has the potential to create more problems than it actually solves. The so-called “tax cuts” are overrated. Unless consumer confidence rises exponentially, the tax cuts are just going to sit in peoples savings accounts. I’m unconvinced this is going to work. I really hope I’m wrong.
19. hsr0601 | 02.12.09
The intelligent president Obama envisioned a great idea of ‘SMART GRID’ representing the long-awaited, much-needed Practical Energy Solution that can run the world to the stabilized energy base, job opportunities, and the prosperity. The U.S. has shown the world its willingness to change the course into the right direction through the enormous reinvestment. I think the other countries will be certain to hail the hard decision over energy freedom, to be sure, the global stock markets are going to move again sooner or later, shaking off the shock from the Gaza misery. I believe the energy independence would be the road to recovery, given the world-wide explosive overpopulation.
21. Uthor | 02.12.09
@John
Well, it’s a good thing we’ve been getting deflation lately, then.
@jo
How does raising minimum wage help people who have no jobs?
@Micheal Trautman
Man, I’d lose my job tomorrow if that happened. I could continue my current life style for 6 years without worrying about losing my job and could probably stretch that to 12 years if I lived frugally. By that point the ecomony is bound to be doing better and I could get to being a productive member of society.
22. Dave | 02.12.09
Let’s see, according to Republicans FDR caused the depression of 1929 and there was a boom economy during Hoover’s term. Bill Clinton caused the depression of 2008 and there was a boom time during the bush era. When wallstreet crooks need trillions from uncle sam it’s a good investment but when coomin folk need money from uncle sam then it’s welfare. I say we arm ourselves, march down to the capital and send about 30% of its occupents to **** where they belong!
23. Tom Cunningham | 02.12.09
So if the stimulus package works, do we really have a two party system any more? Will the Republicans become irrelevant. Will a new party emerge? Would there be independent voters that would even consider voting Republican if (aside from three)they vote as a block against a stimulus plan that is even just appreciated by the majority of the people. Have the Republicans just rolled snake eyes in the biggest vote of the party?
24. Bonnie | 02.12.09
It is “government as usual”….where’s the change? We the people don’t have a say, are not listened to, no matter how many congressmen we write to or blogs we participate in, where’s the “transparency”? I’m telling you, Mr. Obama is no different than all the rest, he is just very smooth, has a way with words to “move the crowds” in a direction he wants, and Hitler was able to do the same thing with his own charismatic personality. I merely stay cautiously optimistic and so far my optimism is fading.
Everyone is afraid to actually briefly “list” the amount of money, then state what is will be used for and then tally up the list at the end to show all money has been accounted for.
I sorta wonder why.
25. Sami | 02.12.09
I am an American and I DON’T love PORK. I don’t want to live in a socialist nation. I want to support the president, but he is making it very difficult. I don’t see jobs - I agree with several of the posts above, education will assist with jobs. However my son graduates with 2 degrees in May from a university and is very concerned he will be stuck working for Walmart due to the lack of work. As for health care. I don’t want the government to be involved in making decisions with my doctor in my care ( I am disabled) it is moving toward the point of just kicking older individuals and people like me (I am 52) to the curb as we have outlived our usefulness. What is America becoming.
27. Don | 02.12.09
Why can’t they break this thing down into its components and run it through the regular process, that way we could get the Tax Cut portion (that take effect immediately) agreed to quickly and get the money flowing.
Some of this complex bill looks like Porkbelly Payback for campaign contributions. Take for instance the $600 Million High Definition TV converter box coupons for $40.00. These converters cost $120.00 a year ago and are now selling for $60.00. With the coupon the net cost is $20.00. Well guess what, these same converters are selling in Europe for $20.00 US (10 Euro/#). So the $40.00 Coupon paid for by the Government is nothing more than a Kickback to ??? The electronics industry? Sony?
Health Information Technology (HIT) Yah! We get it WE take the HIT!
28. Smack Dab | 02.12.09
What will be the ultimate climate in 2012? Is it going to be the end of the world as we know it? Is it going to be the take-over of the world by the Neo-Cons or the Socialists? Is it going to be World War Three (Armageddon)? Is it going to be the greening of the planet due to a massive transformation of the Earth’s ice into water and water vapor?
No. Plain and simple. No.
So what is it going to look like in 2012?
Simple, so very simple.
The world will still be obeying the laws of momentum outside of the hype. The climate will have warmed and the ice will have melted more and deserts will have been created but not so much as new productive land that has been brought from under permafrost. Perhaps the single greatest observable change will be the absolute certainty by the people of Earth that GOVERNMENT, simple and straight, as an entity, is WAY out of touch with reality. As an institution it is archaic and needs to be regulated and reformed.
This will begin the ultimate revolution of the people. This will not happen just in the United States of America but in the whole world. The truth of the intentions of GOVERNMENT will establish those who participate in it as paying lip service to votes and doing whatever they want when elected and by whatever they want I mean they will tow the party line instead of listening to the American Public, which, while forced through attrition to vote D or R, are getting fed up with it all.
Economics is a science folks. The numbers don’t lie. Only people lie. That is why the numbers are never revealed even though they have an obligation to THE FOURTH BRANCH OF GOVERNMENT - YEP THAT’S YOU AND ME to reveal it.
So in the end what is going to be the climate of life in 2012? Simple. Fact vs long running fiction, FINALLY. Then the ugly chips are going to fall as they may and you will be surprised how easily the man behind the curtain exits stage left.
The universe is waiting for the clear indication that the majority of the citizens of this planet understand the truth concerning their own responsibility to work with change and move forward for the betterment of ALL and not just the monied or the titled while the rest of the world gets the crumbs from their tables. In the end there is true shame in not reaching out your hand, Mr. Rich Man, to help your brother and sister anywhere you are. Living your life to hoard things you cannot take with you when you die is assinine. The real impact in 2012 will be the reality that only the people of the world can make the choice to move beyond the politics that have tied them to one choice or another instead of being able to do what is so very clear that needs doing.
I believe that socialism/communism will ultimately fail and the responsible free market will take hold not as a rich man’s paradise but as a marketplace more like a world town square.
You have been smacked…
29. Tim | 02.14.09
the question is can we ever stop fooling ourselves in the myth of unlimited growth in a limited finite asset world. One time a mine was build or an industry, now most created wealth is ” conjecture” on derived values of certain asset classes mingled together with :formulas” and projections .Take real estate Prices only rose out of proportion on speculation of greater value in the future.The truth is basic - if you can’t build a mine or build an industry then build a system ,a con game so clever that even the con artist is conned, with cons of credit and values on things we give value to yet can’t lay eyes on. Believe me we have a two headed coin in this stimulus package.If it fails we lose big if it succeeds we lose bigger because the myth of unlimited growth will be carried forth
30. 1message | 02.15.09
$700 billion divided by 5 million people= $140,000 per person. or= 20 million people get $35,000(the median income). or 50 million people get $14,000 (”poverty level”).
31. Loretta | 04.03.09
Does anyone out there know anything about the food stamp increase for each household? A friend of mine said she read that each household ( no matter how many in it) that was on food stamps was supposed to get an extra $69.00 per month, but we can’t find anyone who has received that much.
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1. James A. Swanson | 02.11.09
America has been royally screwed by more than a quarter century of Reaganomics and GOP malfeasance, greed and incompetence.
The GOP’s balance sheet for America and its banks has two sides, with liabilities on the left and assets on the right.
The problem is that on the left, there’s nothing right, while on the right, there’s nothing left.
James A. Swanson, Los Altos, CA
“The Bush League of Nations”
http://www.bushleagueofnations.com [for FREE download of entire $25.95 book]