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Senators Standing Vertically? Is This Some Kind of Trick?
Senate Allies Fault Obama on Stimulus
By PETER BAKER and DAVID M. HERSZENHORN, NY Times
WASHINGTON — President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.
Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.
Just hours earlier, Mr. Obama called for speedy passage of the stimulus measure, warning that the recession “could linger for years” if Congress did not pass his plan within weeks.
Further complicating the picture, Democratic senators said Thursday that they would try to attach legislation to the package that would allow bankruptcy courts to modify home loans, a move Republicans have opposed.
Parallel to its work on the stimulus plan, the Obama team has also been considering how to use the second $350 billion of the bailout program approved by Congress. A transition team official said Thursday night that the new approach would give government officials broader range to provide relief on consumer loans for homes, automobiles and education, while also doing more to address foreclosures and the problems of municipalities and small businesses.
For his recovery plan, meanwhile, Mr. Obama has been assembling a package worth as much as $775 billion over two years to revive the sagging economy, using the plan to define his presidency even before it begins and to foreshadow his broader approach to governing.
While relying on traditionally liberal notions of using government spending to spur growth, he has also tried to adapt it for a new era with investment in clean energy and technology. And he is trying to balance all of that with tax breaks that appeal to Republicans.
But the broad support he has enjoyed so far for the basic concept is now being tested as the specifics become clearer. While conservatives criticize the high spending, and moderate Democrats express concern about the swelling deficit, liberals are pushing for even more money devoted to social programs, alternative-energy development and road, bridge and school construction.
David Axelrod, Mr. Obama’s senior adviser, said the president-elect’s team was not concerned by the emerging pockets of criticism of his plan.
“Obviously, it’s a big answer to a big problem and there are a lot of component parts to it,” Mr. Axelrod said in an interview after meeting with balky Senate Democrats. “These folks are not potted plants. They’re elected officials, and they’re doing their jobs.”
He added, “It’s a collective process, and we’re willing to listen to people’s ideas.”
Asked if they were willing to adopt people’s ideas, Mr. Axelrod said: “We’ll see. It depends on the idea.”
Mr. Axelrod’s comments came after a spirited meeting at the Capitol where he and two other Obama aides, Lawrence H. Summers, the incoming national economic adviser, and Philip Schiliro, tapped to be the chief White House lobbyist, heard lots of frustration from Democratic senators.
“There is only one thing we have got to do in the stimulus, and that is how can we create jobs,” said Senator Tom Harkin, Democrat of Iowa, as he left the meeting. “I am a little concerned by the way that Mr. Summers and others are going at this in that, to me, it still looks like a little more of this trickle-down, if we just put it in at the top, it’s going to trickle down. A number of people in there said, ‘Look, we have got to have programs that actually create jobs and put people to work.’ ”
Senator Kent Conrad, Democrat of North Dakota and chairman of the Budget Committee, said lawmakers and the incoming administration had differences over how to focus the huge federal spending in a recovery bill. “Investment, investment, investment has got to be the central focus: energy, roads, bridges, waterways, housing,” he said. “Job creation is Job One.”
Mr. Conrad, who described the meeting as extremely positive, said Mr. Summers ended it by telling the senators, “Message received, loud and clear.”
Several Democrats on the Finance Committee earlier in the day questioned the proposal to give tax credits worth $500 to individuals and $1,000 to married couples. Several senators said that initiative would provide a token sum of money, which taxpayers were likely to save, not spend.
Senator John F. Kerry, Democrat of Massachusetts, and others also criticized a proposal to give businesses a $3,000 tax credit for each new employee they hire, saying it was unlikely to influence business decisions.
After meeting with Mr. Summers, Mr. Kerry said he expected adjustments to be made. “We are in a good dialogue,” he said. “I am very confident about some adjustments being made.”
The Democratic demands clash with those of Republicans who want more tax cuts and express doubts that heavy infrastructure spending would be the best way to stimulate the economy. “It’s very important as we go ahead that we find the right balance,” said Representative John A. Boehner of Ohio, the House Republican leader. “Yes, our economy needs help. But at the end of the day, how much debt are we going to pile on future generations?”
With the cascade of conflicting opinions, Mr. Obama’s allies pushed for quick passage. Representative Nancy Pelosi of California, the House speaker, said she would cancel the President’s Day recess in mid-February if lawmakers had not passed an economic plan by then. “If we don’t have a bill before the president’s recess, there will be no president’s recess,” she told reporters.
Mr. Obama reinforced that urgency in a speech at George Mason University in the Virginia suburbs of Washington. “For every day we wait or point fingers or drag our feet,” he said, “more Americans will lose their jobs, more families will lose their savings, more dreams will be deferred, and our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.”
The speech was his first since the election and indicated how fully he is stepping into the role of president when it comes to domestic issues even before his inauguration. His advisers have calculated that he cannot wait to begin a campaign to build public support and have mapped out a series of events to explain his economic approach, including booking him on the ABC program “This Week” on Sunday.
For the moment, the public remains strongly in Mr. Obama’s corner. The latest Gallup tracking poll this week showed that 65 percent express confidence in his leadership.
But Geoffrey Garin, a Democratic political strategist, said the Obama plan’s price tag is “an awfully big number that follows a financial bailout that’s strikingly unpopular with the public. Both of these things create a challenge to overcome, some nervousness on the Hill and among the public.”
Mr. Obama addressed that nervousness in his speech. “I understand that some might be skeptical of this plan,” he said. “Our government has already spent a good deal of money but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy.” But he said his plan “won’t just throw money at our problems. We’ll invest in what works.”
Known on the campaign trail for inspirational addresses, Mr. Obama on Thursday was sober and ominous, summoning the nation to meet a daunting task.
“Now, I don’t believe it’s too late to change course,” he said, “but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years.”
Some Democrats said they were not sure that Congress and the Obama administration would ultimately see eye to eye. Mr. Harkin pointed to Mr. Obama’s speech earlier in the day to promote the economic recovery package and said the rhetoric did not match the dollars in the plan.
“Obama said today that he wanted to double renewable energy in three years, well we can do it,” Mr. Harkin said, but he added that spending to jump-start that initiative would have to be included in the stimulus.