After repeatedly turning back the GOP’s efforts to redirect stimulus money to other purposes, Senate Democrats did an about-face this week as they dipped into the Recovery Act funds to try to pay for their own tax breaks and job-spending priorities.
It’s the first time Senate Democratic leaders have embraced undoing parts of last year’s $862 billion stimulus - though Democrats insisted it wasn’t a strategy change, but rather a last-ditch desperation move to try to entice Republicans to support another round of spending.
The move still fell short. Republicans led a successful filibuster to block the bill again Thursday, saying it still added too much to the deficit. But even proposing the cuts marked a turning point in the growing debate over the success of the stimulus, and left the GOP fuming over what they saw as a fiscal double standard.
“It’s OK when they do it; it’s not OK when we do it,” said Sen. Tom Coburn, Oklahoma Republican.
The fight broke out over a $110 billion bill to extend popular tax breaks and extend unemployment benefits, Medicaid assistance to states and summer-jobs programs, among other items.
This version was Democratic leaders’ third attempt to pass the bill. This time, they agreed to slice the bill’s cost in half and added offsets - including the changes to the 2009 stimulus act, to try to win some GOP votes. The economic stimulus plan is the centerpiece of the Obama administration’s strategy to fight the economic downturn and rising jobless rates, and its effectiveness has become a matter of fierce partisan debate.
But Republicans objected this week that the revised measure still added $33 billion to the deficit over the next decade, and that Democrats had also included some tax hikes in the package.
Senate Majority Leader Harry Reid, Nevada Democrat, said to block the bill a third time demonstrated that Republicans are trying to turn every bill into a political showdown.
“They want everything to be Obama’s Waterloo,” he said, accusing Republicans of protecting oil companies and special interests at the expense of 900,000 jobless whose taxpayer-funded benefits are running out.
Democrats fell three votes shy of overcoming the filibuster, 57-41, with 40 Republicans joined by one Democrat, Sen. Ben Nelson of Nebraska, in blocking the bill.
With the unemployment rate still hovering near 10 percent, Democrats argue last year’s stimulus package of spending and tax cuts - passed with almost no Republican support - helped but was not enough.
They are now trying to figure out ways to continue spending to create jobs, but have been increasingly stymied as lawmakers focus increasingly on cutting government deficits and debt.
Until this week, Democrats had been reluctant to dip into the leftover stimulus spending, even though more than $100 billion remains unobligated 14 months after the package was signed into law.
But as they sought for ways to pay for the $110 billion tax breaks and spending package, they turned to the stimulus.
Their plan would have cut more than $10 billion by lowering food-stamp payments raised in the stimulus law; $300 million by eliminating money in the Broadband Technology Opportunities Program; $300 million from cuts to a distance-learning program; and $260 million from unspent stimulus funds that were supposed to go to the military.
Just last week, Mr. Reid called Republicans’ effort to dip into stimulus funds an “abuse” of the money and said there were no stimulus dollars to spare.
“It wouldn’t be right, with the country still struggling to gain its economic viability, to cut the legs out from under this program that has worked so well,” he said. “I think this is the wrong way to go.”
Jim Manley, a spokesman for Mr. Reid, said Democrats were not eager to tap the stimulus for the current bill, but said it shows how far they’re willing to go to pass what they see as an important jobs-creating measure. He said the move has caused discomfort among some Senate Democrats.
“It was done very reluctantly. The fact is, this demonstrates how hard the Democratic leadership has worked to pick up Republican votes,” he said.
Democrats have turned back every previous effort to undo parts of the stimulus.
Last year, the Senate passed an amendment to strip out a Washington, D.C., summer-jobs program that the U.S. Forest Service funded from wildland firefighting money. But that amendment was later dropped from the final bill.
The White House, too, has been adamantly opposed to any changes in the stimulus.
“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,” press secretary Robert Gibbs told reporters last week. “We need to continue to implement the plan that we have, and not take money away from very important projects like education right now.”
But House Democratic leaders have said they are open to redirecting stimulus funds from low-priority programs to immediate job-preserving efforts, such as preserving local government jobs.
And Sen. Olympia J. Snowe of Maine, one of just two current Republicans in Congress to vote for the stimulus last year, said she thinks money should be redirected now to pay for immediate priorities. Democrats had sought her support for Thursday’s vote, but she stuck with fellow Republicans, arguing the bill’s tax increases on small businesses were unwise.
Republicans said they will take the billions of dollars in stimulus cuts proposed by Democrats and use them as a road map for their own future proposals.
“This is a remarkable turnaround from just the other day when they voted almost unanimously against a similar approach. And we appreciate them identifying those portions of the stimulus bill that they’re willing to jettison,” said Don Stewart, spokesman for Senate Majority Leader MitchMcConnell, Kentucky Republican.
Late Thursday, Mr. McConnell tried exactly that. He proposed a slimmed-down version of the Democrats’ bill, using their own stimulus cuts. Majority Whip Richard J. Durbin, Illinois Democrat, objected, saying the stimulus was producing jobs and that Democrats had worked carefully to craft their bill.
The country’s debt topped $13 trillion earlier this month and stood at $13.041 trillion as of Wednesday, the latest day for which figures are available.
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