Thursday, March 05, 2009
Democrats Now Opposing Obama's Stimulus Bill
Some Senate Democrats shun huge spending bill
WASHINGTON (AP) - Senate Democratic leaders are working hard to suppress dissent within their party over boosting agency spending by 8 percent as the government runs whopping deficits and constituents are forced to scrimp on their own budgets.
A close vote is expected late this week to advance the sweeping spending bill, which wraps together the budgets for 12 Cabinet departments and other agencies, to President Barack Obama. The White House promises to sign it despite over the 8,000 or so homestate pet projects (pork barrel spending) it contains.
Democrats and their allies control 58 seats in the Senate, but 60 votes will be needed to close debate and free the measure for Obama's desk.
A few Democrats are voicing opposition to the bill, however, unhappy with its cost and changes to U.S. policy toward Cuba.
Most significantly, Democrats Evan Bayh (one of the Democrats considered for Vice President) of Indiana and Russ Feingold of Wisconsin announced Wednesday that they will vote against the bill. Both urged Obama to veto it.
"There's just a disconnect between what people are having to go through in their daily lives - tightening their belts, economizing where they can - and what they see the government is doing," Bayh said in an interview. "I just think it's tone deaf and, substantively, we do need to get the deficit under control."
"I just don't know whether we have enough votes to stop it," said Sen. John Ensign, R-Nev., the No. 3 GOP leader in the Senate.
The measure contains budget increases, on average, of 8 percent for the domestic agencies it covers, far more than they received under the Bush administration. But moderates such as Bayh are unhappy with the additional spending, especially after many agencies received huge infusions of money under the just-enacted economic recovery bill.
At the same time, Democratic Sens. Robert Menendez of New Jersey and Bill Nelson of Florida are weighing whether to oppose the legislation over a provision buried in it that would moderate rules on travel to Cuba and would make it easier for Cuba to pay for imports of food and medicine.
Democratic leaders hope to clear the bill - it passed the House last week - to meet a Friday deadline. That's when a stopgap funding law that keeps the government going, mostly at 2008 levels, runs out.
Senate Majority Leader Harry Reid, D-Nev., is also trying to keep the bill free of floor amendments that would force the measure into negotiations with the House that would delay enactment or kill the measure altogether.
But that means Democrats will have to cast some politically difficult votes. One of the most uncomfortable was expected Wednesday afternoon on an amendment by Tom Coburn, R-Okla., to kill 13 so-called "earmarks" requested by lawmakers for projects sought by PMA Group, a lobbying company at the center of a federal corruption investigation.
The PMA Group, which recently folded, had a reputation for funneling campaign money to lawmakers that obtained earmarks for its clients and is under investigation by the Justice Department over whether the company reimbursed some employees for campaign contributions to members of Congress who requested the projects.
On Cuba, Menendez is upset by a provision that would restore travel rules permitting people to visit relatives in Cuba once every 12 months. President George W. Bush imposed rules in 2004 that limited travel to just two weeks every three years and confined visits to immediate family members.
The omnibus bill also would lift restrictions on financing imports of U.S. food and medicine into Cuba and effectively reverse Bush administration rules requiring "cash-in-advance" payment.
"If the omnibus bill is signed by the president as is, he will be extending a hand while the Castro regime maintains its iron-handed clenched fist," Menendez said Monday.
The bill is HR 1105.
Obama tax hike meets Democratic resistance
WASHINGTON (AP) - President Barack Obama's proposal to limit itemized tax deductions for high earners is running into opposition from key Democrats in Congress who worry that charities and the housing market would be hurt.
Senate Finance Committee Chairman Max Baucus questioned Wednesday whether the proposal was viable, a day after his House counterpart also expressed reservations.
Treasury Secretary Timothy Geithner said tax increases on families making more than $250,000 a year are necessary to make a down payment on health care reform and to limit future budget deficits. But, he said, he was willing to work with lawmakers on proposals they objected to.
"We recognize there are other ways to do this," Geithner told the Finance Committee.
Baucus, a Montana Democrat, said he thought the administration would be flexible on the proposal. "They want health care reform as much as I do," he told reporters.
Geithner and White House budget director Peter Orszag returned to Capitol Hill on Wednesday for a second day of hearings on Obama's $3.6 trillion tax and spending proposal. Both faced tough questions about the tax package.
Obama's budget calls for setting aside $634 billion over the next 10 years as a down payment on health care reform. Half the money would come from tax increases on upper-income earners; the other half from cuts to Medicare and Medicaid.
Obama's budget calls for two tax increases on couples making more than $250,000 and individuals making more than $200,000. He wants to increase the top tax rates from 35 percent to 39.6 percent (a government that takes away 40% of what someone makes???!!! OUCH!!!) by allowing a tax cut enacted under President George W. Bush to expire in 2011.
He also wants to limit the deductions those families can claim for charitable donations, mortgage interest and state and local taxes. (so we are to discourage giving money to charities and state and local taxes don't count to the feds anymore, but they want the wealthy to instead give the money to them?!)
Without the new limits, a taxpayer in the proposed 39.6 percent tax bracket could save $396 in taxes from a $1,000 reduction in taxable income. Obama wants to limit deductions to the 28 percent bracket, starting in 2011, meaning the same taxpayer would save only $280.
The higher tax rates are a good bet to become law because Obama campaigned on the change and Congress would not have to do anything to enact them. Once the Bush tax cuts expire at the end of 2010, the higher rates would take effect.
But some key Democrats are wary of limiting deductions.
"I don't want to prejudge anything, but it is certainly one that I am having difficulties with," said Sen. Robert Menendez, D-N.J.
On Tuesday, Rep. Charles Rangel, chairman of the tax-writing House Ways and Means Committee, said he, too, had reservations about the proposal.
"I would never want to adversely affect anything that is charitable or good," the New York Democrat said.
Republicans have been even more critical of the proposal, saying it would reduce charitable donations at a time when many charities are struggling.
"There are people with the means to help. Why would you make it harder for them to do it?" said Rep. Thaddeus McCotter, chairman of the Republican Policy Committee.
Geithner said the change would merely restore the same deduction limits that were in place when President Ronald Reagan left office.