Economic Stimulus Plan Hits Bipartisan Obstacles

On Tuesday, Capitol Hill played host to the historic Inauguration of President Barack Obama, with virtuous talk of bipartisanship, common good and putting aside "childish things" in promising the dawn of a new era in Washington. Less than 24 hours later, it was clear how little had actually changed, as Senators from both parties expressed growing frustration with Obama's top legislative priority, the $825 billon stimulus plan meant to jump-start the nation's ailing economy. (See pictures of President Obama's Inauguration.)

"This just can't be a grab bag of spending desires that have been unfulfilled for the last several years," Senator Evan Bayh, an Indiana Democrat, warned reporters in a corridor outside the Senate chamber. "It must create jobs."

"The bill really doesn't fit into what the Democrats [have] been talking about all along as timely, targeted and specific," Senator John Thune, a South Dakota Republican, lamented to another group of reporters around the corner, 20 minutes later. "It would take a significantly larger portion of tax relief to attract the support of a lot of Republicans."

The Senators' griping over the bill is evidence of how the newly minted President has painted himself into a corner, one that will take some unpleasant arm-twisting to get out of. To underline bipartisanship, the Obama Administration had hoped the stimulus plan would get 80 votes in the Senate, luring significant Republican backing rather than having to ram it through with a simple Democratic majority. But Senate aides on both sides of the aisle say that while the bill is likely to pass, such overwhelming support would be difficult if not impossible to garner. Even overcoming the Senate's 60-vote filibuster threshold would require convincing at least two Republicans to support the plan (unless the much contested Minnesota Senate race is suddenly resolved in the Democrats' favor, in which case Obama would need only one Republican).

If Obama pushes to move the measure to the right to gain more GOP support, he risks losing the Democrats who feel he has already given away too much in proposed tax cuts to win over Republicans. And if he moves to curtail the more open process he prefers and instead force the bill through over GOP objections, Obama could be accused of going against the bipartisan spirit he promised to foster in the nation's capital. In other words, Obama may quickly find himself forced to choose between betraying his party and betraying his principles. (See pictures of the best Obama Inaugural merchandise.)

Not helping matters is a report from the Congressional Budget Office (CBO) that came out Tuesday, which shows that only 38% of the $350 billion in appropriated funds — which includes $274 billion for infrastructure investments — would make their way into the economy within two years of enactment. While some Democrats defended the study, saying it did not look at large parts of the bill, it was still a topic of some contention at the caucus' weekly lunch meeting on Wednesday. "If [the CBO report] is right, it is a cause for concern," said Senator Ben Nelson, a Nebraska Democrat, after the meeting. "I'm troubled if the bill doesn't create jobs, if it's not an investment that creates or retains jobs."

The legislation as proposed by the House — the Senate version is expected later this week — includes several provisions not traditionally associated with a short-term stimulus, such as an expansion of college grants, investments in renewable energies and a measure to modernize health-care records. Those are all longtime items on the Democratic agenda and Obama campaign promises. Obama had hoped he could get away with such far-reaching measures by also making tax cuts a large part of the bill, but the House version ended up with fewer tax cuts than he had envisioned. Not surprisingly, Republicans in the Senate — where GOP support is more essential than in the House (where Speaker Nancy Pelosi holds a much larger majority) — have expressed disappointment. "We believe that, regretfully, the stimulus package seems to be drifting off as a result of the package that we've observed that the House Democrats approved, kind of drifting in a different direction from what President Obama seems to be suggesting," Senate minority leader Mitch McConnell told reporters. (See who's who in Barack Obama's White House.)

As if the notion of a bailout for Main Street didn't have enough hurdles to overcome, Obama may also need to ask for upwards of $50 billion more for the already approved bank bailout to deal with the continuing credit crunch. Considering that nine Democrats disregarded Obama's personal appeal last week and voted against giving his new Administration the second half of the $700 billion allocated by Congress in September, adding $50 billion more to the stimulus could poison the well for Dems adamantly opposed to further aid for Wall Street.

Senate Budget Committee chairman Kent Conrad said Wednesday the Senate version should take the CBO report into account and focus more on job creation. "One thing I think we have to look at is a redirection of some of this money," he told reporters tersely after the caucus meeting, "to things that will have more of an immediate effect." The Senate Appropriations Committee postponed its markup of the Senate version until next week after negotiators said they wanted to revisit some provisions.

Before taking office, Obama last Friday traveled to Ohio to make his case for a prompt passage of his stimulus plan, the first of what is sure to be many sales trips as members waiver. "The need for this action has never been more urgent," Obama warned in Bedford Heights, Ohio. "It's not too late to change course, but only if we take dramatic action as soon as possible."

The President will start to make sales calls in Washington as well. After meeting on Thursday with his key economic advisers, Obama is expected to host the Senate and House leadership of both parties on Friday. He has also pledged to, at their request, meet with House Republicans next week, so they can propose their ideas for the package. Despite the growing rumblings of both parties in the Senate, majority leader Harry Reid on Wednesday reiterated his pledge that Obama will have a bill to sign into law by President's Day on Feb. 16. But the question remains: Whose arms will the postpartisan President have to twist the hardest, Republicans' or Democrats'?

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