The 61-37 roll call followed a last Republican effort to derail president’s initiative by raising a budget point of order against the massive bill for adding to the deficit. This also failed on an identical 61-37 vote waiving the rules.
Just three Republicans—Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania— crossed the aisle to back the president. Going forward, Obama’s challenge will be to retain this support while also bridging a rural-urban divide in his own party that could delay a final agreement.
To a remarkable degree, the administration has skirted by until now, promoting the competing House and Senate bills and never making public its full requests for new spending and tax breaks. Leading Republicans like Mississippi Sen. Thad Cochran have complained most about the situation, but over time it has also worked against Democrats who have borne the brunt of the criticism while Obama sails above the fray.
That is now changing, just as the last 24 hours have seen the administration take a much more aggressive posture in putting forward its economic program.
Obama himself stumped for his recovery plan in the industrial Midwest Monday, used a prime time White House news conference in the evening to speak to the nation, and was back on the road Tuesday in Florida, where Republican Gov. Charlie Crist has been supportive of his stimulus efforts.
At the same time Tuesday, Treasury Secretary Timothy Geithner moved center stage as never before, outlining an ambitious plan to improve the flow of credit by leveraging the remaining $350 billion in the bank rescue package approved by Congress. The Federal Reserve, which Geithner previously served with in New York, will be a major partner, and pooled with private funds, the Treasury plan could grow to as large as $2 trillion over time.
Obama’s stimulus plan and Geithner’s proposals are each of a piece to try to restore are not just jobs and credit but also confidence in the economy. Down the road, regulation will be the third leg of Obama’s famous “three-legged stool” metaphor for his agenda, but without either of the first two, the whole effort is doomed.
“It is essential for every American to understand that the battle for economic recovery must be fought on two fronts,” Geithner said in his speech in Treasury’s historic “Cash Room.” “We have to both jumpstart job creation and private investment, and we must get credit flowing again to businesses and families.
“Without a powerful Economic Recovery Act, too many Americans will lose their jobs and too many businesses will fail. And unless we restore the flow of credit, the recession will be deeper and longer, causing even more damage to families and businesses across the country.”
Mindful of this Obama used his White House press conference to begin to stake out his positions going into the talks now with the House and Senate on the recovery bill.
He aggressively defended a $16 billion school construction initiative which had been cut at the insistence of Senate Republican moderates. At the same time he showed some irritation with critics who dismiss the long term savings—for the government and consumers—in using the stimulus bill to also make investments Obama wants in energy conservation.
Going forward, at least four major issues face him:
---Both House and Senate bills provide close to $87 billion in increased federal aid to help states meet their healthcare bills under Medicaid. But the House bill is much more tilted in favor of larger urban states, which have experienced the greatest increase in unemploymen, while the Senate bill takes a more across-the-board approach that helps rural states.
---The Senate bill is more tilted toward tax breaks, including a $15,000 homebuyers’ tax credit that has proven more costly than first advertised and seems sure to face challenges in the negotiations. Senators also used their bill to address the perennial problem of protecting middle and upper middle income families from the alternative minimum tax –an issue that House fiscal conservatives argue should be dealt with separately.
---State and local aid is a major part of both bills, but the final round of cuts imposed by Republican moderates fell heavily on these accounts, including a $40 billion cut from the a state fiscal stabilization initiate favored by Obama.
--The school construction issue remains a ticklish one since it was a cut that both Collins and Specter insisted upon in the negotiations. At the White House Monday, Obama defended the proposal, saying it would generate construction jobs and be a long term commitment to education important to the economy, In fact, the New Deal saw like-minded investments in local schools. But Collins and Specter argued that in today’s environment, it represents a new federal role in public schools and ought to be debated outside of the stimulus debate.
Obama’s goal has been to complete negotiations before the Presidents’ Day recess that begins this weekend. Most observers believe that will be very difficult. But to speed the process, the leadership has opted for a very limited number of senators to be represented in the talks: Reid; Finance Committee Chairman Max Baucus (D-Mont) and his ranking Republican Sen. Charles Grassley of Iowa; and Appropriations Chairman Daniel Inouye (D-Hawaii) and his ranking Republican, Cochran.
Just five senators will represent the chamber, for example: Reid; Finance Committee Chairman Max Baucus (D-Mont) and his ranking Republican Sen. Charles Grassley of Iowa; and Appropriations Chairman Daniel Inouye (D-Hawaii) and his ranking Republican, Cochran.