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.WASHINGTON -- President Barack Obama's $819 billion economic stimulus package is headed for the Senate after a surprisingly partisan vote in the House in which Republicans united in opposition and 11 mostly conservative Democrats defected.
During Senate debate next week, the measure -- larger than the combined total cost of the wars in Iraq and Afghanistan -- is expected to pick up at least some GOP support. But Obama's hopes of changing Washington's partisan culture went unmet despite the president's separate high-profile meetings on Capitol Hill on Tuesday with House and Senate Republicans.
The $819 billion measure has attracted criticism from Republicans and, privately, from some Democrats for spending billions of dollars on Democratic favorites like education despite questions as to whether they would really put people to work.
But with unemployment at its highest level in a quarter-century, the banking industry wobbling despite the infusion of staggering sums of bailout money and states struggling with budget crises, Democrats said the legislation was desperately needed.
Obama hailed his recovery plan, saying it would "save or create more than three million new jobs over the next few years."
The House plan largely reflects Obama's desires, but after zero GOP support, he suggested the House plan was hardly perfect.
"I hope that we can continue to strengthen this plan before it gets to my desk," Obama said.
The 244-188 House vote registered 177 Republicans unanimous in opposition.
Tens of billions of dollars would go to the states, which confront deep budget cuts of their own. That money marks an attempt to ease the recession's effect on schools and poor people receiving Medicaid health coverage. There's also money for housing weatherization, school construction, road building and other provisions. There are big investments toward Obama's campaign promise of creating jobs that can reduce the nation's dependence on foreign oil.
The centerpiece tax cut calls for a $500 break for single workers and $1,000 for couples, including those who don't earn enough to owe federal income taxes. There are also tax breaks for businesses making investments in equipment and renewable energy production.
The House vote marked merely one of several steps for the legislation, which Democratic leaders have pledged to deliver to the White House for Obama's signature by mid-February.
Already a more bipartisan -- and costlier -- measure is taking shape in the Senate, and Obama personally pledged to House and Senate Republicans in closed-door meetings on Tuesday that he is ready to accept modifications as the legislation advances.
Democrats had already dropped provisions that Republicans had mocked, including money to resod the National Mall and expand family planning programs.
The Senate bill contains a plan that would cost approximately $70 billion to make sure that about 24 million mostly middle-class taxpayers don't get hit by the alternative minimum tax. Although welcome by many lawmakers, the move wouldn't do much to boost the economy since the AMT "patch" is expected anyway later in the year if it doesn't pass now
Spending our way out of a debt problem isn't going to work. Hyperinflation is going to set in by 2011. 20+% and unemployment off the chart too.
Spending our way out of a debt problem isn't going to work. Hyperinflation is going to set in by 2011. 20+% and unemployment off the chart too.
This is not going to help our economy in the least, in fact it's going to make things worse. The government has to get it's money through taxation, inflation, or borrowing. All three choices hurt the private sector by taking money away from the consumers. This means that the private sector has less money to spend or save, which means that countless jobs are lost because of it. This stimulus is not water on the fire, it's gasoline.
This is not going to help our economy in the least, in fact it's going to make things worse. The government has to get it's money through taxation, inflation, or borrowing. All three choices hurt the private sector by taking money away from the consumers. This means that the private sector has less money to spend or save, which means that countless jobs are lost because of it. This stimulus is not water on the fire, it's gasoline.
Borrowing from China is unlikely to hurt the private sector, at least in the way you suggest. There is a credit crisis. People can't borrow anyway, so it is unlikely that government borrowing is going to substantially crowd out the private sector. What it might do (fingers crossed) is expand the market for private sector products.
This is not going to help our economy in the least, in fact it's going to make things worse. The government has to get it's money through taxation, inflation, or borrowing. All three choices hurt the private sector by taking money away from the consumers. This means that the private sector has less money to spend or save, which means that countless jobs are lost because of it. This stimulus is not water on the fire, it's gasoline.
Borrowing from China is unlikely to hurt the private sector, at least in the way you suggest. There is a credit crisis. People can't borrow anyway, so it is unlikely that government borrowing is going to substantially crowd out the private sector. What it might do (fingers crossed) is expand the market for private sector products.
Borrowing represents a future tax on the citizens. The debt has to be paid eventually, and the government has no money of it's own.
Borrowing from China is unlikely to hurt the private sector, at least in the way you suggest. There is a credit crisis. People can't borrow anyway, so it is unlikely that government borrowing is going to substantially crowd out the private sector. What it might do (fingers crossed) is expand the market for private sector products.
Borrowing represents a future tax on the citizens. The debt has to be paid eventually, and the government has no money of it's own.
Yes. Borrowing does represent a future tax on the citizens (although if the GDP grows quickly enough, this might be a small tax). What is your point?
Borrowing represents a future tax on the citizens. The debt has to be paid eventually, and the government has no money of it's own.
Yes. Borrowing does represent a future tax on the citizens (although if the GDP grows quickly enough, this might be a small tax). What is your point?
Well if borrowing represents a future tax, then that means it's going to be taken from the private sector. Which as I explained before does not help the economy.
Yes. Borrowing does represent a future tax on the citizens (although if the GDP grows quickly enough, this might be a small tax). What is your point?
Well if borrowing represents a future tax, then that means it's going to be taken from the private sector. Which as I explained before does not help the economy.
If money is borrowed to build a bridge, a school, new energy transmission lines, highways, etc., then the return on that money to the public and the private sector may exceed the cost of borrowing. Under your reasoning, any borrowing is a bad thing. Why would you think so? Private enterprise borrows even though they have to pay it back with interest.
Well if borrowing represents a future tax, then that means it's going to be taken from the private sector. Which as I explained before does not help the economy.
If money is borrowed to build a bridge, a school, new energy transmission lines, highways, etc., then the return on that money to the public and the private sector may exceed the cost of borrowing. Under your reasoning, any borrowing is a bad thing. Why would you think so? Private enterprise borrows even though they have to pay it back with interest.
Well right now we're in a recession. The best thing the government can do is cut taxes and cut it's own spending. Taking money out of the private sector right now is not helping get us out of the recession, and this stimulus will only prolong and worsen it.
If money is borrowed to build a bridge, a school, new energy transmission lines, highways, etc., then the return on that money to the public and the private sector may exceed the cost of borrowing. Under your reasoning, any borrowing is a bad thing. Why would you think so? Private enterprise borrows even though they have to pay it back with interest.
Well right now we're in a recession. The best thing the government can do is cut taxes and cut it's own spending. Taking money out of the private sector right now is not helping get us out of the recession, and this stimulus will only prolong and worsen it.
We are in a recession. There is too little demand to maintain our rate of growth, or possibly to maintain growth at all. What is wrong with government spending? In addition to providing public goods which benefit the private sector (e.g., bridges), it also stimulates demand directly (e.g., purchasing the materials and labour to build those bridges). There is minimal crowding out of private investment, because there is no credit available anyway.
I honestly don't understand your reasoning. Yes, someday we will have to pay it back. So what? Do you encourage kids without money not to borrow for college because later on down the line, when they have jobs, they will be faced with debt?
In principle I am not opposed to Kensian economic solutions to DEflationary cycles.
However, the money has to be wisely invested.
Is it in this bill?
Frankly, some of the stuff looks rather porcine to me.
It's not entirely nuts, but some of us boggles my mind.
