Pre-Christmas stimulus plan is tough sale

Senate Republicans said they are willing to work with Democrats on the stimulus.

McClatchy Newspapers

WASHINGTON — Washington is poised during the next 90 days to approve spending perhaps $100 billion to jolt the ailing economy.

The only questions are when it will happen and whether it would have much impact.

Democratic congressional leaders have suggested passing two separate stimulus plans, one this fall and the other immediately after President-elect Obama takes office Jan. 20. A pre-Christmas agreement could be tough, however, because President Bush and Republican congressional leaders may be reluctant to support one.

Delaying approval until late January would mean three months without new government help for the struggling economy. Analysts already are skeptical about how much a $100 billion stimulus, the figure most often discussed, would move a $14 trillion economy.

Brian Bethune, the chief U.S. financial economist at IHS Global Insight in Lexington, Mass., said that a useful package would need to add 1 percent to 1.5 percent to the gross domestic product. That would be roughly $150 billion to $200 billion.

“Anything smaller would be fairly inconsequential,” he said.

Stimulus backers argue that it’s important to look beyond the numbers. A broad-based plan would give the country an important psychological boost and signal that Democrats will act fast and differently in power.

“2008 really is the launch of a new era ... [and] I think you’re going to be seeing it in the way that we approach the stimulus package,” said Sen. Sherrod Brown, D-Ohio.

President-elect Obama made it clear Friday that he wants a stimulus fast.

“The one thing I can say with certainty is that we are going to need to see a stimulus package passed either before or after my inauguration,” he told a Chicago news conference.

The stimulus push shapes up as a two-part drama, with one chapter this fall and the next in January.

Nancy Pelosi, D-Calif., the speaker of the House of Representatives, and Senate Majority Leader Harry Reid, D-Nev., want Congress to reconvene Nov. 17 to consider a plan that could spend billions.

The House in late September passed a $60.8 billion stimulus that included new money for extending unemployment benefits, highway construction, aid to mass transit and public housing and help for low-income consumers to pay energy bills and job training. That’s the same approach that Pelosi hopes to pass anew.

Forty-one Republicans joined 223 Democrats in voting for the bill in September, suggesting its passage is possible again in November. A similar version died in the Senate when it fell eight votes short of the number needed to stop a filibuster, but 52 senators signaled their support.

The Bush White House is the key stumbling block. Bush opposed the September House plan, but spokeswoman Dana Perino last week wouldn’t rule out Bush’s backing of a new approach.

“I think we need to let them work that through and we’ll see what they come up with,” she said.

Senate Republicans, who were instrumental in blocking the September stimulus, signaled last week that they’d work with the Democrats. “If they want to work with us in a bipartisan way to help the economy, they’ll have no better ally,” said Don Stewart, the communications director for Senate Republican Leader Mitch McConnell of Kentucky.

With last month’s unemployment rate at the highest level since March 1994 and consumer spending in the last quarter plunging at its steepest pace since 1980, lawmakers feel new pressure to show constituents that they’re acting to jump-start the economy.