Lawmakers, Lobbyists Squabble Over Stimulus

Congress is back in Washington and is negotiating an economic stimulus package. House Speaker Nancy Pelosi hopes to have a deal reached within two weeks. But the already contentious relationship between the Democrats' and Republicans' competing visions for the stimulus is increasingly complicated by special interest lobbies, and presidential candidates.

Democrats are centering on a plan to boost government spending, most likely in the form of tax rebate checks, extensions of unemployment benefits, and assistance to homeowners struggling to pay higher mortgage bills. Those efforts have been taken up by the leading Democratic presidential candidates in a game of one-upsmanship to offer the biggest and broadest package of government help. On the other hand, Republicans are advocating tax cuts for corporations and small businesses as well as write-offs for business investment and losses. Some business groups, however, are clamoring for more.

The entire atmosphere surrounding the stimulus negotiation is beginning to resemble a feeding frenzy, with politicians and lobbyists alike jockeying to secure their spot at the trough.


The White House, too, wants to have a say in the direction Congress eventually takes. President Bush is expected to weigh in on the negotiations later today in a conference call with Congressional leaders. The White House is reportedly considering a stimulus package of its own, which is likely to focus on making the Bush tax cuts of 2001 and 2003 permanent. He is also on record as saying that he will veto any tax increase. Adding to the list of heavy hitters trying to influence the negotiations is Federal Reserve Chairman Ben Bernacke, who will testify before the House Financial Services committee today, and is expected to make the case for Congressional action on the economy.

On the campaign trail, the Democratic candidates are raising the stakes of the negotiations by putting numbers on their proposed plans. Sen. Hillary Clinton has proposed a $70 billion package of additional Federal spending as well as a freeze on foreclosures. Former Senator John Edwards has called for a total of $100 billion in jobs programs and additional Federal assistance. Not to be outdone, Sen. Barack Obama wants a $120 billion stimulus package along similar lines as his rivals. The Republican presidential candidates have been less eager to offer specifics on the economy, aside from making the tax cuts permanent or fundamentally changing the tax code.

Congressional leaders badly want to deliver on this highly anticipated economic stimulus. Congressional approval ratings are very low, lower even that the president's, and a package of economic initiatives, targeted at the Democrats' base, would be seen as not only boosting the economy, but the Democrats' electoral chances as well. Republicans, for their part, also have a political base to consider. Expect them to resist any attempts to increase spending in an effort to shore up their fiscally conservative image. So the pressure is on both sides. Speaker Pelosi acknowledged as much yesterday in a briefing with reporters at the Capitol, and tried to tamp down expectations. "This package is not going to be all things to all people," she said.