Divided along party lines, Congress neared final passage of President Barack Obama's $787.2 billion recovery plan Friday night, a huge political gamble for Democrats but also a vital beachhead for the new administration as it tries to turn around the collapsing economy.
House passage came on a 246-183 vote—with no support from Republicans. The Senate began voting shortly before 5:30 p.m. but the roll call stretched on for hours in a near-empty chamber awaiting Sen. Sherrod Brown, who was flying back from his mother's wake in Ohio.
At 7 p.m., the vote stood at 59-38, making Brown the 60th vote Democrats need to waive a last budget point of order and have complete passage of the legislation. Three Republican moderates—Sens. Olympia Snowe and Susan Collins of Maine and Sen. Arlen Specter of Pennsylvania—voted as promised with the majority.
Sen. Edward Kennedy (D., Mass.), who despite his illness has returned at some risk to himself on earlier votes this month on the bill, was not able to vote today, requiring Brown to fly back-and-forth from Ohio where his mother’s funeral is being held Saturday.
Friday’s continued partisan divide in the House was extraordinary given all the changes made in the package since it first left the House in January. New tax breaks were added in negotiations with the Senate, spending substantially reduced and the overall cost of the package scaled back by more than $30 billion.
Republican aides had predicted this week that 10 to 20 party moderates could join in supporting the bill. But the grassroots pressure from conservatives has been immense, raising fears of Republican primary challenges. The result appears to be a hardening of positions—dramatized Thursday by New Hampshire Republican Sen. Judd Gregg’s withdrawal as Obama’s nominee as Commerce secretary.
The mood in the Senate was more tempered, given the three Republican defections and the huge influence they had on reshaping the Democratic package. But Obama’s old rival, Sen. John McCain (R., Ariz.) was given the role of raising the crucial budget point of order against emergency spending in the bill. Gregg, just a day after withdrawing his name for the Cabinet, supported McCain. And even as McCain congratulated Obama on his anticipated victory, he was scathing in his comments.
“That this is bipartisan legislation is simply not accurate,” he said. “We want to work with the other side, and this is not the example that I think the American people wanted.”
Liberal Democrats accused the GOP of waging a war to weaken the new president even as he is struggling with a dangerous economy. Punctuating the partisan split in the House was the fact that fewer of the Democratic “Blue Dog” fiscal conservatives opposed the revised bill.
Just seven Democrats opposed the bill, compared to 11 last month, and those seven included at least one liberal, Rep. Peter DeFazio of Oregon, who was upset with the adjustments made in negotiations with the Senate.
Rep. Jim Cooper (D-Tenn.), who has been a thorn in the side of the leadership and sharply critical of the first House bill, voted for the measure Friday, describing it as “better and more targeted than the original bill and it is much closer to the president’s original request.”
“Congress has a lot to learn from President Obama about transparency, accountability and bipartisanship, but this is a vote to keep that dialog open.”
In the Senate, as well, there was growing dismay among Democrats, not just at the level of opposition from Republicans but the failure of anyone to step forward and ease the situation for Kennedy by offering themselves as a proxy vote.
Severely ill with cancer, Kennedy’s presence had been vital in the earlier rounds to ensure 61 votes—and give some political protection to the three Republican moderates. The fact that he would not e there Friday raised anxiety, even to the point that his wife, Victoria, called the Republicans to ensure their support if her husband did not return.
For Obama, the massive bill, filling close to 1,000 pages, is a much needed victory, both as he tried to stabilize the economy but also begin to lay the foundation for long-term savings in energy and health information technology.
Final estimates by the Congressional Budget Office, released Friday, brought down the cost slightly to $787.2 billion from prior assumptions this week. But more importantly, CBO projects that 74% of the taxes and spending will be pumped into the economy in 18 months and 91% by October 2011.
An estimated $287 billion would be distributed in the form of tax cuts, targeted heavily toward middle and lower income families in the lowest three income quintiles of income. The administration argues that this approach increases the likelihood that the tax breaks will be spent to stimulate the economy. But the White House is clearly proud to have had a broader progressive impact on the tax system—a theme in Obama’s campaign.
Included is the president’s “Making Work Pay” initiative, a $116 billion tax break to offset payroll taxes for working families worth $400 per individual and $800 for couples. And the bill expands the Earned Income Tax Credit for families with three or more children and also makes it easier for very low income workers to qualify for the refundable child credit.
Another $150 billion is broadly targeted toward infrastructure, running from highway and transit construction to new investments in renewable energy. These include Obama priorities such as $8 billion for high speed rail, $11 billion to improve the nation’s electrical grid, and $7.2 billion to expand access to broadband.
Governors will benefit from $90 billion in added Medicaid funds over the next two years as well as an estimated $53.6 billion fiscal stabilization fund to be shared with local governments.
Unemployment benefits are extended for the long term jobless and increased by about $25 a week. At a cost of $20 billion, food stamp benefits are increased temporarily by 10% and a new $25 billion initiative seeks to help workers, laid off recently, to meet COBRA payments required to maintain health insurance for their families.
“I hope this bill works, I really do,” said House Minority Leader John Boehner, but the Ohio Republican warned the rushing to act had ignored less costly conservative alternatives. “We owe it to small business and we owe it to ourselves to get this right,” Boehner said. “Bad process leads to bad policy, and that’s what we have here in by view.”
“Bad policy that will drive up the debt and put all of this cost on our kids and grandkids….I hope it works, but I surely have my doubts.”
Democrats countered that Congress, stymied by veto threats in the last year of the Bush administration, had already waited too long to pass a stimulus, and warned that the deepening recession had become the worst economic crisis in the post-World War II era and threatened to slip toward the hardships of the Great Depression in the ‘30s.
Speaker Nancy Pelosi (D-Calif.) read excerpts from the famed historian Arthur Schlesinger’s account of those years, when then President Herbert Hoover suggested a good joke, good song or good poem could shake the country from its decline. And the 82-year-old dean of the House, Rep. John Dingell (D-Mich.), recalled serving as a page in the chamber when his father was a congressman in the 1930s.
“Hardship was terrifying. It was the worst economic experience in the history of this country,” Dingell told the House. “Let’s learn from history, my dear friends and colleagues.”
“Those who have studied that Depression tell us that had Congress acted, or the administration aced with vigor, that the Depression would have been much shorter and much less severe. We have a chance to learn from that experience.”