House OKs economic stimulus package

By Janet Hook

Jan. 29, 2009 12 AM PT

WASHINGTON — In the first major test of President Obama’s ability to push his ambitious agenda through Congress, the House on Wednesday approved the largest attempt since World War II to use the federal budget to redirect the course of the nation’s economy.

Obama had worked hard to gain bipartisan support for the $819-billion stimulus package, beginning to negotiate possible compromises with Republicans even before entering the White House. But the measure passed on a strict party-line vote, 244 to 188. Not a single Republican supported the bill, and only 11 out of 255 Democrats opposed it.

The real test is whether the president’s plan helps halt what has threatened to become an economic death spiral. The answer to that question will come not from Washington, but in cities, neighborhoods and rural areas across the country as the bill’s impact becomes clear among workers, employers, and state and local governments.

Despite Wednesday’s partisan outcome, the president praised the House vote and urged quick action in the Senate. “What we can’t do is drag our feet or allow the same partisan differences to get in our way,” Obama said. “We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do.”

With Obama and Democratic leaders intent on enacting an economic stimulus plan by mid-February, the Senate is expected to vote next week on its version of the bill -- broadly similar to the House plan but more expensive. A House-Senate conference will resolve differences, and Democratic leaders have pledged to have a final bill to the White House before the Presidents Day recess or to keep members in session until they act.

“We don’t have a moment to spare,” Obama said before the House vote.

Although solidly unified on the final vote, even some Democrats worried that the bill -- which was drafted by House Democrats working closely with Obama’s aides and approved just eight days after his inauguration -- might not achieve its enormous goals.

And some lawmakers, especially fiscal conservatives and freshmen, squirmed at having to approve so much deficit spending to attack a problem they blame on former President George W. Bush and the GOP.

What carried the day for these Democrats was heavy political pressure to take some bold action to alleviate the anxiety and misfortune their constituents face.

“There are a million reasons to vote against it, but the problem is there are a million and one reasons to vote for it,” said one freshman House Democrat who asked not to be named so he could speak candidly about his ambivalence.

For their part, Republicans showed remarkable unanimity. On major economic issues, typically a few moderate Republicans stray from the party line. This time, they seemed to be concerned chiefly with re-establishing their bona fides as fiscal conservatives, deriding excessive government spending while returning to their pro-tax-cut credo.

“Most House Republicans will oppose this bill tonight for one reason: It won’t work,” said Rep. Mike Pence (R-Ind.). Republicans unsuccessfully proposed an alternative that focused only on cutting taxes.

Rep. Earl Pomeroy (D-N.D.) dismissed their stance as a “tired old Republican formula.”

“We are moving the ship of state in a new direction -- in favor of the many, not the few,” said House Speaker Nancy Pelosi (D-San Francisco).

The bill contains an almost-bewildering array of provisions, many of them funded at all-but-unprecedented levels.

For the millions of Americans who have lost their jobs and are feeling the effect of the economic crisis most directly, the measure would provide at least $86 billion for expansion of the social safety net -- including deep subsidies for private health insurance, expanded access to Medicaid and more extensive jobless benefits.

About $275 billion in tax cuts for businesses and individuals, including credits of up to $500 for single workers and $1,000 for couples, are included in the bill. And it would prime the economic pump with $544 billion in direct spending, including aid to fiscally beleaguered states, subsidies for education and energy innovation, and funding for highway construction and other job-creating infrastructure projects.

Congress is moving with unusual dispatch at a time when the economy is shedding jobs at an astonishing pace. About 2.6 million jobs were lost in 2008, and 2 million more are expected to be lost in the next six months.

“The workers who are returning home to tell their husbands and wives and children that they no longer have a job, and all those who live in fear that their job will be next on the cutting blocks, they need help now,” Obama said Wednesday after meeting with corporate executives at the White House.

“They are looking to Washington for action, bold and swift.”

The bill aims to shore up the economy both in the short and long term by putting more money into the hands of consumers through various tax credits. It would try to spur job creation with tax breaks for businesses and the billions for infrastructure and construction projects.

The impact of those provisions will not be felt for some time -- not until taxpayers and businesses calculate their tax bills or until public works projects get up and running.

But for unemployed workers, the measure includes benefits that will be implemented almost immediately.

They include little noticed provisions that would greatly expand access to healthcare for the unemployed, who usually lose their insurance coverage when they are laid off -- measures that Republican critics view as a Trojan horse for Democrats’ hopes of expanding the federal role in healthcare.

“Things that should be debated in the context of healthcare reform are being rushed through in this stimulus bill,” said Rep. Michael C. Burgess (R-Texas), an obstetrician.

Under current law, the government allows people to keep their former employer’s health insurance for 18 months if they pay the full premium. That is prohibitively expensive for many, so only about 26% of people who are eligible take advantage of that option.

To make it more affordable, the bill would provide a subsidy of 65% of the premiums, at a cost of $40 billion.

The House bill also would allow anyone receiving an unemployment check to qualify for Medicaid, the federal-state program for low income people. The federal government would cover the full cost of that expansion to the unemployed. Those healthcare provisions would apply to people who lost their jobs after Sept. 1, 2008.

Other provisions of the bill would put more cash into the hands of the jobless and the needy. A $25-a-week increase in unemployment benefits was included, up from the average weekly benefit of $200. And up to $7 billion would be provided to encourage states to extend their unemployment coverage of low-wage, part time and other workers who do not now qualify.

Democrats estimated that could provide up to 650,000 more workers with benefits.

The bill also would provide an extra month’s check -- about $450 -- to 7.5 million poor and elderly recipients of Supplemental Security Income, as well as aid to states for emergency welfare spending.

[email protected]

Peter Nicholas, Jim Puzzanghera and Maura Reynolds in our Washington bureau contributed to this report.