[updated on Feb 11, 2009 as information has been made available]
Negotiators --including White House Chief of Staff Rahm Emanuel, Baucus (Sen Finance chair), Collins and Snowe of Maine, Specter of Pennsylvania and Ben Nelson-- apparently have agreed on cutting the economic stimulus package to $789 billion and expect to get the legislation to the President's desk by the end of the week. They claim they've got the votes, but they are still working out the details. See Donmoyer, U.S. Lawmakers Agree on $789 Billion Stimulus Plan, Bloomberg.com. See also Spangler, Agreement near on $790B economic stimulus package, Detroit Free Press, Feb. 11, 2009 (noting comments by Dave Camp, ranking Republican on the House Ways and Means Committee and member of the eight-member conference committee slated to hash out a compromise between the House and Senate on the legislation).
Ben Nelson, one of the Senators arguing for a smaller package, indicated that he didn't think anything in the proposed agreement was a "deal breaker." Among the changes were (i) scaling back the Making Work pay credit on payroll taxes from $500 to $400 for individuals ($1000 to $800 for families); (ii) eliminating, except for small businesses with revenues of up to $5 million, the extension of the carryback for losses, which as originally written would have allowed companies to claim about $68 billion of refunds over two years from taxes paid in years prior to the period currently allowed for carrybacks; (iii) reducing the write-off for interest payments on car loans from $11 billion to $2 billion (no details on how that works yet); and (iv) scaling back the homebuyer credit to $8000 from the $15,000 in the Senate version. The conferees have apparently agreed on this scaled back package, with the tax portion being cut from the Senate's $350 billion to about $280 billion. BNA DailyTax RealTime (Feb. 11, 2009 at 8:48 pm). The New York Times reports that the deal required slashes of spending to accommodate the Senate compromises--$35 billion is cut from the state fiscal stabilization fund and $16 billion from school construction assistance and "sharply curtailed" unemployed health subsidies. See Congress Reaches Deal on Stimulus Plan, New York Times, Feb. 11, 2009.
Will House Republicans come on board? Unlikely, according to New York GOP representative Peter King, who thinks a stimulus bill should have even more tax cuts and fewer spending provisions. See Nasaw, Congress reaches deal on economic stimulus package, Guardian.co.uk, Feb. 11, 2009; Benen, Political Animal: Done Deal, Washington Monthly, Feb. 11, 2009. That preference for tax cuts does not make sense, when we know that (i) tax cuts over eight years of the Bush administration did not give us the strong, job-creating economy that the proponents promised back then and (ii) most respected economists consider government spending, and the government jobs created by that spending, a fine stimulus that is generally better than tax cuts. The agreement as is already compromises away the core possibilities of a stimulus package--spending 9 percent of the bill on an AMT patch which has nothing to do with stimulus and everything to do with another tax cut like the ones that have been passed for the last 8 years, getting us nowhere; taking money from education, health, and other tangible and intangible infrastructure, and giving it instead to people who happen to have enough even in hard times to buy a house or a car. But that is where we are.
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