Obama Seeks to Broaden Support for Stimulus Plan
WASHINGTON — The White House released new details of an $825 billion economic recovery package on Saturday as President Obama sought to broaden the plan’s appeal a day after stepping squarely into the fractious Congressional debate over the proposal.
In his weekly video address, Mr. Obama argued that the package of spending programs and tax breaks was critical not only to turn around the economy but to rebuild the nation for a new era.
In the address, posted for the first time on the White House Web site, Mr. Obama made the case that the package would help students go to college, protect workers from losing health care, lower energy bills and modernize schools, roads and utilities.
“This is not just a short-term program to boost employment,” Mr. Obama said. “It’s one that will invest in our most important priorities like energy and education, health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.”
The speech was part of a developing campaign by the White House to build momentum behind the plan and propel it to passage by mid-February. The report revealed new details about elements of the package, which would pay for everything from laying 3,000 miles of transmission lines for a new national electric grid to securing 90 major ports to guaranteeing health insurance for 8.5 million Americans in danger of losing coverage.
On Friday, Mr. Obama had moved to quell criticism from both parties and to retain leadership on an initiative that could define his term.
Through his budget director, Peter R. Orszag, Mr. Obama committed to seeing that three-quarters of the combined spending and tax cuts would be used within 18 months, to provide the fiscal jolt that economists say is needed to jump-start the economy.
Mr. Orszag’s letter of assurance to Congress sought to rebut some Republicans’ accusations that little of the spending in the House version of the package would get into the economy quickly enough to be effective.
For the first time as president, Mr. Obama also met with the leaders of both parties in Congress, in keeping with his campaign promise of bipartisanship.
Yet in a polite but pointed exchange with the No. 2 House Republican, Eric Cantor of Virginia, Mr. Obama took note of the parties’ fundamental differences on tax policy toward low-wage workers, and insisted that his view would prevail.
At issue is Mr. Obama’s proposal that his tax breaks for low- and middle-income workers, including his centerpiece “Making Work Pay” tax credit, be refundable — that is, that the benefits also go to workers who earn too little to pay income taxes but who pay Social Security and Medicare taxes. Republicans generally oppose giving such refunds to people who pay no income taxes.
“We just have a difference here, and I’m president,” Mr. Obama said to Mr. Cantor, according to Rahm Emanuel, the White House chief of staff, who was at the meeting.
Mr. Emanuel said that Mr. Obama was being lighthearted and that lawmakers of both parties had laughed.
Mr. Cantor, in an interview later, had a similar recollection. He said the president had told him, “You’re correct, there’s a philosophical difference, but I won, so we’re going to prevail on that.”
“He was very straightforward,” Mr. Cantor added. “There was no disrespect, but it was very matter-of-fact.”
The administration plans to press the lobbying effort in coming days. Vice President Joseph R. Biden Jr. will appear on the CBS News program “Face the Nation” on Sunday and Mr. Obama’s chief economic adviser, Lawrence H. Summers, will appear on the NBC News program “Meet the Press.” Mr. Obama will visit Capitol Hill in the coming week to talk with Republican lawmakers on their home turf.
But House Republicans are stiffening their resistance to the magnitude of spending in the plan developed by House Democrats on Mr. Obama’s behalf to create or save more than three million jobs. About two-thirds of the $825 billion is reserved for spending and the rest for tax breaks. In the Republican response to the president’s address, Representative John A. Boehner of Ohio, the House minority leader, pushed for deeper tax cuts instead.
Mr. Boehner, who will also appear on “Meet the Press” on Sunday, touted a Republican plan to lower federal income tax rates in the lowest two brackets rather than provide a $500 per worker tax credit, as Mr. Obama wants to do. The Republican plan also would provide tax breaks for small businesses, home buyers and the unemployed.
“Our plan is rooted in the philosophy that we cannot borrow and spend our way back to prosperity,” Mr. Boehner said. “Unfortunately, the trillion-dollar spending plan authored by congressional Democrats is chock-full of government programs and projects, most of which won’t provide immediate relief to our ailing economy.”
Mr. Boehner cited his own numbers to counter those of Mr. Obama, saying the House Democratic plan includes $600 million for the federal government to buy new cars, $650 million for digital television coupons and $50 million for the National Endowment for the Arts. “All told, the plan would spend a whopping $275,000 in taxpayer dollars for every new job it aims to create,” he said.
In his speech on Saturday, Mr. Obama said he knows that some worry about the size of his plan. “I understand that skepticism, which is why this recovery plan must and will include unprecedented measures that will allow the American people to hold my administration accountable for these results,” he said. “We won’t just throw money at our problems; we’ll invest in what works.”
Mr. Obama spent Friday focused on the economy, attending what is now a daily economic briefing at the White House, met with his staff about his first budget, due next month, and conferred privately with Timothy F. Geithner, his Treasury secretary nominee, who is likely to be confirmed by the Senate on Monday.
As for the stimulus package, the president told reporters, “It appears that we are on target” toward adopting the recovery plan before Congress recesses for Presidents’ Day on Feb. 13.
As he opened the meeting with Congressional leaders, Mr. Obama told the lawmakers that “there are still some differences around the table and between the administration and the members of Congress about particular details on the plan.”
“But what I think unifies this group,” he said, “is recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with and dealt with rapidly.”
Having invited lawmakers to present their ideas for doing that, Mr. Obama is getting an earful. The process is shaping up as a first major test of his presidential leadership, with many of his campaign promises, as well as the livelihoods of millions of Americans, at stake.
Mr. Obama did not lay down a comprehensive plan but made clear his policy preferences, reflecting campaign promises on energy, education and health care, along with traditional stimulus proposals for aid to states and expanded unemployment compensation and food stamp benefits.
Mr. Obama left it to the Democratic-controlled Congress to fill in the details. His differences with his own party in the House are mostly minor, and the House Democrats’ package is expected to be passed next week. But a new Senate plan diverges in several ways from what House Democrats and Mr. Obama favor.
Under the House plan, workers who lose their jobs would receive health insurance subsidies for 12 months, under a law known as Cobra. The Senate version, unveiled by the Senate Finance Committee chairman, Max Baucus, Democrat of Montana, would cut the term of those subsidies to nine months. And while the House version would allow states to offer Medicaid to unemployed individuals who do not qualify for Cobra, the Senate version would not expand Medicaid eligibility, or include a House proposal to lengthen Cobra coverage for unemployed individuals age 55 and over.
The Senate bill would also restrict states from using a separate increase in federal aid to states for Medicaid costs included in the stimulus package to expand Medicaid eligibility.
The Senate version differs from the House bill in other ways as well. It would exclude the first $2,400 of unemployment benefits from federal income taxes for 2009, a provision not included in the House bill. And while the House version would provide a single extra payment to Social Security disability beneficiaries — roughly $450 for an individual and $630 for a couple — the Senate version would give a $300 payment to all Social Security recipients, including retirees and the disabled, as well as to disabled veterans.
Democrats are eager to help Mr. Obama succeed, knowing that their success rides on his. Still, they are refusing to cede their status as leaders of a co-equal branch of government, as they say Republicans did under President George W. Bush.
Republicans, for their part, do not want to be seen as obstructionists of a popular new president in a time of national distress. Yet especially in the House, where most Republicans hail from ideologically conservative districts, the opposition members view the stimulus debate as an opportunity to rededicate their divided, demoralized party around the one idea that unites it: big tax cuts, even if that means opposing Mr. Obama.
But House Republicans do not have enough votes to prevail. And events on Friday made clear they do not pose a united front with Senate Republicans.
In a speech, the Senate Republican leader, Mitch McConnell of Kentucky, countered criticism from party conservatives, like many in the House, who oppose compromise with Mr. Obama.
“Anyone who belittles cooperation resigns him or herself to a state of permanent legislative gridlock,” Mr. McConnell said. “And that is simply no longer acceptable to the American people.”
Senate Republicans have not signed on to the House Republican plan that Mr. Cantor and Mr. Boehner presented to Mr. Obama. It omits the Making Work Pay tax credit, which Obama aides have called “nonnegotiable,” in favor of reducing the two lowest income-tax brackets, to 10 percent from 15 percent, and to 5 percent from 10 percent, a move that would benefit even the richest taxpayers.
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