Democrats push 2nd stimulus plan

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By Sean Lengell THE WASHINGTON TIMES

Capitol Hill Democrats are pushing for a second economic stimulus package this year, saying that rebate checks handed out to American households this year helped prevent the country from falling into a serious recession.

But it's uncertain if such an election-year promise will become a reality, as the proposal so far has generated little enthusiasm among Republicans and the White House.

“We want to have a stimulus package that creates jobs, for economic development and also for disaster assistance,” said House Speaker Nancy Pelosi, California Democrat, who supports another stimulus plan worth at least $50 billion when Congress returns in September from its five-week summer break.

Sen. Robert C. Byrd, West Virginia Democrat, also this week announced plans for a $24 billion stimulus plan that includes about $10 billion for infrastructure improvements, such as highway and clear water initiatives, and $10 billion for natural disaster aid.

Democratic leaders in both houses of Congress have been soliciting support for another stimulus plan among Republicans and the White House — which both supported the year's initial stimulus package.

But Republican leaders say that finding a way to lower the price of gasoline — a theme they have hammered at Democrats in recent weeks — and not another massive government subsidy program would be the best way to improve the economy.

“I have serious doubts about whether we really need a second stimulus bill, and I have even greater doubts about what it would look like out of this Democrat-controlled Congress,” said House Minority Leader John A. Boehner, Ohio Republican. “It'll just be a giveaway that [is] well meaning and well intentioned, but a big waste of taxpayers' dollars, and I don't think that's what most taxpayers want.”

About 130 million U.S. households this year are scheduled to receive tax rebate checks of up to $600 a person or $1,200 for couples, with an additional $300 per child, as part of a $168 billion stimulus package designed to help jump-start the sluggish economy. Congress passed the measure earlier this year.

The package also provided businesses with tax breaks for investment in plants or equipment, which are intended to be an incentive to retain and create jobs.

The Commerce Department on Thursday announced the U.S. economy grew at a modest 1.9 percent annual rate in the second quarter — a rate that some analysts say would have been negative if not for the 2 percent growth they attribute to stimulus spending.

But Democrats are still debating whether tax rebate checks would be included this time, saying that any stimulus package must first address a long list of other needs, such as improving the nation's aging highway system and other infrastructure needs, aid for natural disaster relief and possibly an extension of unemployment benefits.

“There is no question we would like a second stimulus package — we think the economy needs it,” said Sen. Charles E. Schumer, New York Democrat. “But it should be deeper and put its tentacles more into the economy than just a rebate, which might be necessary as well.”

Mrs. Pelosi said that while rebate checks will be “on the menu,” the benefits must be weighed against any potential deepening of the national debt.

“A stimulus package by nature is counter-cyclical — you have to do it because you're having a downturn in the economy,” she said. “But if you do it in a way that weights you down with more budget deficit, then what are you accomplishing?”

Treasury Secretary Henry M. Paulson Jr. said Thursday the first stimulus plan provided a necessary boost to the economy, which he predicted would continue to grow for the rest of the year, even though it contributed to projections for a record high deficit in 2009.

“Clearly, the stimulus plan has supported the U.S. economy during this difficult period and couldn't have been timelier,” he said. “American families spent, companies invested and benefited from strong export growth.”

Senate Majority Leader Harry Reid, Nevada Democrat, supports another stimulus package but also says he is uncertain whether rebates should be included.

But President Bush, who backed the initial stimulus program, has dismissed Democratic calls for a second package, saying he believes the economy will keep growing on its own.