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The Honolulu Advertiser
Posted on: Thursday, December 18, 2008

Stimulus package Obama's first test

By Peter Nicholas
Los Angeles Times

WASHINGTON — President-elect Barack Obama's call for speedy adoption of a massive spending plan to "jolt" the economy will prove an early test of two major promises: that he will work in a bipartisan style with a skeptical Republican Party, and that he will purge the federal budget of wasteful projects.

Obama's aides are assembling a two-year stimulus package that could cost $850 billion — and potentially up to $1 trillion — with a blend of new jobs, middle-class tax relief and expanded aid for the poor and the unemployed.

Even conservative Republicans on Capitol Hill predict that, in the end, a substantial stimulus package will pass. Job losses and a deepening recession demand a quick infusion of money, they say.

But Republicans in the Senate, even with their ranks diminished, still possess leverage to tailor a package that fits certain specifications. They want public hearings on the stimulus, even if it thwarts Democratic ambitions to present the bill to Obama for his signature when he is sworn into office on Jan. 20. And they insist the bill be scrubbed of projects that, in their view, are aimed more at appeasing interest groups than creating jobs.

When the new Congress convenes on Jan. 6, Senate Democrats will still lack the 60-vote majority needed to stave off Republican delaying tactics — a reality that gives Republicans confidence they can win concessions.

Obama has identified the stimulus package as an urgent priority. He is promoting a recovery plan that would feature spending on roads and other infrastructure projects, energy-efficient government buildings, new and renovated schools and environmentally friendly technologies.

There also would be some form of tax relief, according to the Obama team, which is well aware of the political difficulty of pushing such a large package through Congress, even in a time of recession. Any tax cuts would be aimed at middle- and lower-income taxpayers, and aides have said there would be no tax increases for wealthy Americans.

In February, Congress passed an economic stimulus bill costing $168 billion and featuring $600 tax rebates for most individual taxpayers and tax breaks for businesses.

The upcoming effort would dwarf that earlier measure as well as a $61 billion stimulus bill the House passed just before adjourning for the elections. That measure died after a veto threat by President Bush and GOP opposition in the Senate.

The fate of the bill could shape the course of Obama's presidency. If it works, it could help lift the economy out of recession, giving him the space to enact his ambitious energy, education and healthcare programs.

Senate Majority Leader Harry Reid, D-Nev., said Obama has indicated that Congress will get his recovery recommendations by the first of the year.

"He's going to get that to us very quickly and so we would hope within the first 10 days to two weeks that he's in office, that is after Jan. 20, that we could pass the stimulus plan," Reid said. "We want to do it very quickly."

Behind Obama is a formidable array of interest groups eager to see a major national spending program unleashed. Business groups and organized labor, mayors and governors — all will be pressing lawmakers to pass Obama's spending plan.

New Jersey Gov. Jon Corzine, a Democrat, said yesterday that he wanted to see the bill signed by Obama on the day he is sworn in. In talks with his congressional delegation, Corzine said he has learned that the "goal is to have something on the president's desk on Inauguration Day."

Obama's methods may prove a revealing window into his governing style. Pushing for legislation by Inauguration Day would allow for just two weeks of public debate on a bill that could cost as much as the entire Iraq war.

Republicans would like to see the timetable slowed and more debate encouraged — which they argue would also be in keeping with the transparent and inclusive style Obama embraced as a candidate for president.

"There has to be transparency for a bill that big," said Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, R-Ky. "If it gets to be $800 billion to $900 billion, it's bigger than any single bill in the history of the country. It's going to take some work and need some oversight, and nobody's really talking about that right now."

Demanding that the bill be passed by Inauguration Day, he added, "is a pretty big ask."

Though no stimulus bill has yet been drafted, Republicans are wary of some of the proposals put forward by groups that are talking to Obama's transition team. They cite a report by the U.S. Conference of Mayors listing myriad projects cast as vehicles to create jobs and boost the economy. Those include a dog park in Hercules, Calif.; a bike path in San Diego; and a $1.5 million push to curb prostitution in Dayton, Ohio.

The Associated Press contributed to this report.