Congress Sends Obama $787 Billion Economic Stimulus Package

By Brian Faler

Feb. 14 (Bloomberg) -- An economic stimulus package worth $787 billion is headed to President Barack Obama’s desk after Congress passed the plan that Democrats say is critical to helping pull the U.S. economy out of recession.

The Senate late yesterday voted 60 to 38 to approve the package of tax cuts and more than a half-trillion dollars in new federal spending. Three Republicans joined Democrats in favor of the measure. Earlier in the day the House passed the bill, 246 to 183, with no Republicans in favor. The votes give Obama the first major legislative victory of his presidency.

“The jobs the American people care about most -- their own -- will be dramatically safer the day that President Obama signs this plan into law,” said House Speaker Nancy Pelosi, a California Democrat.
The measure will reach the president’s desk “no earlier than Monday” because of paperwork that still needs to be done, said White House spokesman Robert Gibbs.
Democrats predict the plan will save or create 3.5 million jobs. Its costliest item is a $400 payroll tax cut for individuals and $800 for couples. Retirees, disabled veterans and others who don’t pay payroll taxes will get a $250 payment.
Republicans argued that the bill contains too much government spending and, because of that, won’t do enough to boost the economy.

‘Spending, Spending’ 

“I think everyone in this chamber on both sides of the aisle understands we need to act,” said House Minority Leader John Boehner, an Ohio Republican. “But a bill that’s supposed to be about jobs, jobs, jobs has turned into a bill that’s all about spending, spending and spending.”

The measure needed 60 votes to pass the Senate. The three Republicans voting for the bill in that chamber were Arlen Specter of Pennsylvania and Susan Collins and Olympia Snowe, both of Maine. Senator Edward Kennedy, a Massachusetts Democrat who is battling brain cancer, didn’t vote and one of Minnesota’s Senate seats remains vacant.

Most senators had left the chamber’s floor hours before the final tally was announced. The vote was held open for five hours until Senator Sherrod Brown, an Ohio Democrat, returned from his home state to cast the deciding vote for the bill. Brown had been in Ohio following the death of his mother earlier this week.
Businesses won several tax breaks, including faster write- offs for equipment purchased in 2009 and incentives for companies that produce and invest in renewable resources such as solar and wind power. A business tax break pushed by the U.S. Chamber of Commerce will ease near-term tax burdens on companies and buyout firms that restructure debt without entering bankruptcy. The bill also includes an alternative minimum tax cut.

Judd Gregg 

Senator Judd Gregg, the New Hampshire Republican who withdrew this week as Obama’s commerce secretary nominee, voted against the plan. In a statement, he called it a “so-called stimulus plan” that “has become sidetracked by misplaced spending and a lack of attention to the true problems facing the nation.”
The stimulus plan provides a half-trillion dollars for jobless benefits, renewable energy projects, highway construction, food stamps, broadband, Pell college tuition grants, high-speed rail projects and scores of other programs. It raises the nation’s debt limit to about $12 trillion.

The package restricts executive compensation at all companies receiving assistance from the Treasury Department’s Troubled Asset Relief Program, not just those receiving “exceptional” aid as the Obama administration announced last week. The legislation limits bonuses and other incentive pay at those companies on a sliding scale according to how much federal aid they take.
Executive Bonuses
Bonus restrictions will be imposed on senior executive officers and the next 20 highest-paid employees at companies that receive more than $500 million from TARP. Companies receiving between $250 million and $500 million will face restrictions on bonuses to their senior executive officers and their next 10 highest-paid workers. The limits will apply to the top five employees at companies receiving between $25 million and $250 million.


Other details of what provisions survived negotiations between the House and Senate were still emerging even as the plan headed for congressional passage.
Lawmakers dropped provisions barring funds from going to museums, arts centers and theaters. A ban on money to casinos, golf courses, zoos and swimming pools was retained. Lawmakers deleted provisions requiring businesses receiving stimulus funding to use E-Verify, a government program used to ensure workers are in the country legally.

CBO Report 

The nonpartisan Congressional Budget Office said the stimulus package will cost $787 billion, rather than $789 billion lawmakers estimated earlier this week. The plan will pump $185 billion into the economy this year and $399 billion next year, the agency said.
“This country faces the greatest crisis that we’ve seen in terms of the economy since the ‘30s,” House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, said as he urged passage of the bill. “The other tool normally available to us is monetary policy in the form of low interest rates through actions of the Federal Reserve. We’ve already fired that bullet - - the only bullet left is fiscal policy.”
Democrats released the text of the plan late the night before the vote, prompting complaints from Republicans they didn’t have enough time to review the legislation before voting on it.
“It is over a thousand pages,” said Representative Tom Price, a Georgia Republican. “It is physically impossible for any member to have read this bill.”

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net.
Last Updated: February 14, 2009 00:00 EST