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Summers warns that stimulus battle not yet over
Steven Hurst The Associated Press
Issue date: 2/9/09 Section: News
WASHINGTON (AP) - One of President Barack Obama's top economic advisers forecast Sunday a difficult struggle with Congress over Senate cuts of $40 billion for state and local governments from the administration's massive spending and tax cut package to stimulate the failing economy.
The $827 billion Senate version of the plan - designed to bring the economy out of the worst downward spiral since the Great Depression - was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure.
Lawmakers were likely to begin reconciling those differences later this week, with Obama still pressing to have the stimulus measure on his desk for signing by mid-month.
But without the infusion of federal money to state and local governments, the country may still face "a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs," said Lawrence Summers, chairman of the White House National Economic Council.
Rep. Barney Frank, D-Mass., the chairman of the Banking Committee, chided Republicans for ignoring the outcome of the November election.
"We had an election last year which had pretty decisive results in the White House, the Senate and the House. And it did say that public spending for improved infrastructure, to keep bridges from crumbling, to keep cops and firefighters working is a good thing," Frank said.
The Senate measure was pared back from more than $900 billion to entice a handful of necessary Republican votes in support of the legislation. The House bill passed without a single Republican vote in its favor, a rebuke to Obama's vow to take the debilitating partisan heat out of Washington politics.
Republican Sen. John Cornyn of Texas said he expects Obama's stimulus package to pass the Senate, but he warned that it could damage the U.S. economy in the future.
A stark critic of Obama's approach to repairing the badly damaged economy, Cornyn said he believes passing the measure with minimal Republican support must be a major disappointment to Obama. He argued that the president's stimulus package is loaded with pet Democratic spending projects and is "just spending as far as the eye can see."
The $827 billion Senate version of the plan - designed to bring the economy out of the worst downward spiral since the Great Depression - was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure.
Lawmakers were likely to begin reconciling those differences later this week, with Obama still pressing to have the stimulus measure on his desk for signing by mid-month.
But without the infusion of federal money to state and local governments, the country may still face "a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs," said Lawrence Summers, chairman of the White House National Economic Council.
Rep. Barney Frank, D-Mass., the chairman of the Banking Committee, chided Republicans for ignoring the outcome of the November election.
"We had an election last year which had pretty decisive results in the White House, the Senate and the House. And it did say that public spending for improved infrastructure, to keep bridges from crumbling, to keep cops and firefighters working is a good thing," Frank said.
The Senate measure was pared back from more than $900 billion to entice a handful of necessary Republican votes in support of the legislation. The House bill passed without a single Republican vote in its favor, a rebuke to Obama's vow to take the debilitating partisan heat out of Washington politics.
Republican Sen. John Cornyn of Texas said he expects Obama's stimulus package to pass the Senate, but he warned that it could damage the U.S. economy in the future.
A stark critic of Obama's approach to repairing the badly damaged economy, Cornyn said he believes passing the measure with minimal Republican support must be a major disappointment to Obama. He argued that the president's stimulus package is loaded with pet Democratic spending projects and is "just spending as far as the eye can see."
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