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Deal Struck on Stimulus Bill

POSTED: February 12, 2009, 12:00 pm

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The Democrats control the White House. They have control of the House of Representatives. However, they are a slim majority in the Senate. In the end, three Republican Senators – the “Three Amigos” – determined the fate of President Obama’s economic recovery package. Two Senators from Maine, Olympia Snowe and Susan Collins, and Arlen Specter of Pennsylvania, joined Senate Democrats to fashion a compromise bill that pared down the huge stimulus bill’s spending and tax cuts, and reduced the overall package by about $40 billion. The final package comes in at $789 billion.

The House is now set to vote on the bill on Friday, followed by the Senate so President Obama can sign the legislation by Monday. The President had called upon Congress to send him the recovery legislation to sign by the President’s Day recess.

It is a deal that House Democrats will begrudgingly accept, despite the fact that favored items such as $16 billion for school construction was eliminated and health care subsidies for the unemployed were significantly reduced. Just two days ago, Rep. Barbara Lee and Rep. Emanuel Cleaver sent a letter to the House leadership on behalf of the Congressional Black Caucus, detailing items the Caucus identified as priorities for the stimulus package. The Caucus too identified spending on school construction as well as $4.2 billion for the Department of Housing and Urban Development’s Neighborhood Stabilization Fund as priorities, among other items listed. School construction was a high priority for Caucus members because the public school infrastructure in most urban districts is over 100 years old, antiquated, and in some cases, simply unsuitable for the needs of 21st century instruction.

This bill was of utmost importance to Black members of Congress. With unemployment soaring to 12.6 percent among Blacks, and Black teenage employment at 36.5 percent, members of the Congressional Black Caucus rightly focused on those elements of the package that created jobs, saved jobs, prevented home foreclosures and strengthened the workforce development infrastructure. In many ways, CBC members are front and center in this crisis as their congressional districts are struggling with a multitude of issues affecting a wide swath of residents.

The elimination of funds for school construction and renovation projects from the legislation is also a blow to President Obama. Just yesterday, the President told an audience at a town hall meeting in Fort Myers, Florida that he saw rebuilding schools’ infrastructure as a key component of his job creation strategy. Many local school districts were counting on an infusion of funding for projects that they could not finance themselves during this difficult economic period. Those projects will now likely be deferred which means that they will become a more expensive proposition in the future as buildings age and the cost of renovations skyrocket.

This bill, by all accounts, is not what the White House or Democrats on the Hill envisioned. Fresh off the historic election of Barack Obama, Democrats began working on the bill at the end of last year. It was conceived as major jobs bills that would jumpstart the economy, and for Democrats, have the additional benefit of supporting many programs and constituencies that the prior administration had written off. Perhaps somewhat overconfident, the Democrats underestimated the ability of the minority party to frame the debate in a way that cast the bill as wasteful spending. The first sign of trouble emerged when House Republicans made clear their intention not to cooperate with House Democrats, and maintained their position throughout the debate. Their counterparts in the Senate, save the three moderates, cast a similar posture and would have sunk the bill had not the three Republicans chose to defy their caucus.

The difficulty President Obama had in moving the bill raise significant questions over other big-ticket items such as universal health care, another issue that the President has deemed a priority. A unified Republican Party can paralyze Mr. Obama’s agenda and recast the midterm elections as a referendum on a failed presidency. The fact that Republicans essentially would not compromise on a bill of such importance may be a sign that their strategy is simply to create roadblocks for the new administration. The President certainly learned the hard way that his appeal to bipartisanship and reason has its limitations. Mr. Obama expended significant political capital wooing Republicans and selling his plan to the American public. Despite the investment, the President was not successful in attracting Republican votes or protecting key provisions of the bill he favored.

Once he signs this bill, Mr. Obama will be the symbol of the nation’s economic fortunes. The stimulus package along with the reconstructed bank bailout program announced by Treasury Secretary Timothy Geithner will be wholly attributable to the Obama administration. For many of the President’s most ardent supporters, many of whom are fully aware that the economy will determine Mr. Obama’s place in history, the last two weeks have been far from what they envisioned while standing in the shadow of the Capitol on January 20.

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