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October 31, 2014

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Senate Passes Stimulus Bill

POSTED: February 11, 2009, 12:05 pm

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While President Bush stumped for his economic recovery package before an audience in Fort Myers, Florida, where he was introduced by Republican Governor Charlie Crist, the Senate was voting on the “compromise” bill crafted by Senator Ben Nelson (D-NE) and Senator Susan Collins (R-ME). The measure passed in a 61-37 vote with Collins joined by her Maine colleague Senator Olympia Snowe, and Senator Arlen Specter of Pennsylvania as the only Republicans casting votes in favor of the measure. The bill now heads to a House-Senate conference committee where the differences between the version just passed and the bill passed by the House of Representatives will be hammered out.

The day’s events were punctuated by news from General Motors that it would layoff 10,000 of its professional workforce worldwide. In the United States the automaker is expected to eliminate about 3,400 white collar positions or about 12 percent of its professional ranks. In addition, GM is temporarily reducing the pay for the majority of its U.S. white collar workforce. The move comes as General Motors prepares to report the progress it has made in stabilizing the company since it received assistance from the federal government. GM’s announcement was also framed by the news that its chairman Bob Lutz will be stepping down. His departure comes just days after President Obama signaled his intent to limit executive compensation at companies that receive emergency federal aid.

Treasury Secretary Timothy Geithner also announced the restructuring of the original financial industry bailout that took the form of the Troubled Assets Relief Program or “TARP.” Widely ridiculed for its lack of oversight and the unwillingness of firms that received funds to lend to consumers, TARP had few fans but legions of critics. Under the new plan Secretary Geithner indicated the goal would be to raise $2 trillion from the Treasury Department, private investors and the Federal Reserve to resuscitate the nation’s banking system. None of the news stirred excitement on Wall Street as investors expressed disappointment with the Senate’s version of the stimulus bill and the market closing trading almost 400 points down.

With President Obama failing to attract significant Republican support for the economic recovery bill, the battle is increasingly being fought on old, partisan lines. The very landscape that the President was seeking to redraw is the terrain upon which the battle over the stimulus bill is being fought. Republicans have dug their heels in and apparently are willing to take the calculated risk that any short-term hit the party takes in the court of public opinion is worth it for the long-term prospects of solidifying its base. For Democrats the challenge of being a majority just shy of having full control makes the still unresolved Minnesota seat, likely won by comedian and satirist Al Franken, that much more important for the party’s goal of open running in the Senate.

On the surface the conflict between the two parties appears to be a rehashing of old ideological positions. For Democrats, the stimulus bill represents its greatest single opportunity in decades to invest resources in constituencies that comprise the party’s base and complete projects that had been on their wish list. Republicans have fallen back on their tried and true call for tax cuts, and limiting government spending. Against this backdrop President Obama’s approval ratings have remained in the stratosphere but the GOP has managed to score some points in the debate over the last two weeks as polls have shown that skepticism has slightly increased about the economic recovery legislation.

President Obama is now trying to take the offensive as he is down to wire in trying to get Congress to pass the bill. The challenge he faces is that even if Congress does act the mood of investors has so soured over the stimulus package that there may not be the bounce he anticipates from hoped for buoyed consumer confidence. His mini-tour is being used to tout the bill but also to take back the “message” from Republicans. With the likelihood of an almost straight, party line vote the President will most likely paint Republicans as out of touch with the crisis impacting Americans from all walks of life, as he did in his stops in Indiana yesterday and today in Florida.

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