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White House, Congress clash over stimulus

Senate rejects second effort to pass tax, spending package

- The Washington Times - Thursday, June 17, 2010

The White House has begun a summerlong effort to rehabilitate the damaged image of the $862 billion Recovery Act, arguing that Americans are finally beginning to see the effects - even as the administration is struggling to get Congress to agree to another round of stimulus spending.

Voting late Thursday, the Senate rejected a second effort to pass a tax and spending package President Obama called for, even though Democratic leaders had pared it down by $35 billion after an earlier failed vote.

Republicans filibustered and were joined by one Democrat and one independent, forcing Democratic leaders back to the drawing board yet again as they seek to balance job creation with fears of the expanding deficit.

"There is going to be havoc in America starting tomorrow," said Senate Majority Leader Harry Reid, Nevada Democrat, warning that Medicare payments to doctors will be slashed and unemployment benefits will not be extended for those who have been jobless the longest because the bill didn't pass.

The stimulus, Mr. Obama's first major accomplishment in office, has become one of the major battlegrounds heading into November's elections as Republicans question whether it was worth it and even some Democrats argue that Congress needs to worry more about the deficit than job spending.

But with polls showing a majority of Americans don't think the stimulus has had much effect, the White House finds itself playing defense.

The effects of the first stimulus are expected to peak this summer before winding down, and Mr. Obama will travel to Columbus, Ohio, on Friday for groundbreaking on the 10,000th stimulus-funded road project.

Still, with the unemployment rate higher now than it was a year ago, the administration is pushing Congress to keep spending.

"This is not a time to take, to use the metaphor, take our foot off the accelerator here. We still need to continue to create jobs and spur job growth now," Vice President Joseph R. Biden Jr. told reporters at the White House as he checked off the thousands of stimulus-funded projects Americans will see over the summer.

To date, the stimulus has remained intact. Key Democrats, including House Majority Leader Steny H. Hoyer of Maryland, say they are now open to revisiting the stimulus and redirecting some of the unspent money toward new job-creating priorities, such as stopping states and local governments from laying off teachers.

"At the time we considered it in February of last year, nobody was saying there were going to be 300,000 teachers, because of continuing lack of revenue at the state level, that might be laid off," Mr. Hoyer said. "That, it seems to me, has been concluded by the administration, and I think most members I talk to, is a priority item."

Mr. Reid is not willing to take that step. He rejected a Republican offer Thursday to shift stimulus money to pay for the bill.

At the White House, press secretary Robert Gibbs said they are not ready to open up the stimulus and start redirecting money.

"We've got a plan you heard the vice president talk about that, we believe, is helping what was a very fragile economy become more stable," Mr. Gibbs said. "We need to continue to implement the plan that we have, and not take money away from very important projects like education right now," Mr. Gibbs said.

Mr. Biden said 2.5 million people are working today because of the Recovery Act and that it is on track to meet the original metric "of creating or saving 3.5 million jobs by the end of this year." At $862 billion, that works out to nearly $250,000 per job.

The vice president said the economy is recovering but that the key measure is whether Americans who want jobs feel like they can find them.

Given that the unemployment rate stood at 9.7 percent in May - three-tenths higher than it was last year - the administration is keen to see lawmakers spend more on jobs.

House Democrats heeded the advice on Thursday, passing a $30 billion government fund designed to spur banks to lend to small businesses. The bill passed by a vote of 241-182.

But across the Capitol, Senate Democrats fell four votes short of the 60 needed to overcome a filibuster on the $105 billion extension of stimulus programs, including aid to states that face layoffs or major budget cuts without the money.

A bigger version, totaling $140 billion, was soundly defeated by a bipartisan majority on Wednesday.

About half of the new $105 billion version is paid for, and the other half is added to the deficit. Those changes won over many wavering Democrats, but not all - and Republicans remained united in their opposition.

Sen. Tom Coburn, Oklahoma Republican, complicated matters by offering a 20-part amendment to cut spending to pay for the rest of the new spending. His parliamentary tactic caught Democrats by surprise.

"Borrowing money that we don't have to spend on things that we don't absolutely need is not the answer to solve the problems with our economy. The answer is for us to live within our means," Mr. Coburn said.

But after the Republican-led filibuster, Democrats will have to rewrite their bill, and it's unclear whether Mr. Coburn's proposed cuts will get a vote when the Senate returns next week.

The national debt topped $13 trillion earlier this month and stood at $13.073 trillion as of Wednesday, the latest day figures were available.

Mr. Biden said they are still searching for the 60 votes needed to cut off debate and force a final vote on the bill, but he challenged lawmakers to step up and said in the overall budget picture this one-time spending won't add that much to long-term debt.

"That's what leadership is about. Leadership is about making the right decisions based on what the facts are, even at the time when their viewed to be unpopular," he said.

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