Thursday, February 5, 2009


The stimulus does not have enough votes to pass in the Senate -- and senators are scrambling to cut (gut?) the proposed measure. Susan Collins and Ben Nelson, two moderate Republicans, want to eliminate $200 billion from the package. But it appears that lawmakers have already inserted a new provision that makes the legislation more expensive (a new home purchase tax credit). Good luck!

I think it's pretty remarkable that Republicans have been able to hold up the stimulus, despite the sweeping Democratic victory in national and state politics this year. Clearly, some Democrats in the Senate disagree with the package in its current form. And, perhaps the release of a Gallup poll which shows that only 38% of the public supports passage of the legislation in its current format has something to do with the current stalemate.


Alcuria said...

As you pointed out (scale of the Democratic victory in the fall), that the bill is in trouble is amazing. And you have the moderate portion of both parties (Collins and Nelson) expressing concerns. Anger is going to be directed at Congress, less so towards President Obama if the bill is not cleaned up.

Darren Lenard Hutchinson said...

Hey, Alcuria. Thanks for posting. Given Obama's popularity, I can see how Congress would receive the blame. If the Republicans had derailed it alone, then they certainly would receive the blame. But, if it remains bipartisan, then members of Congress can blame "unreasonable" Democrats. The only risk for Obama is that he has made this legislation the centerpiece of his early presidency. If this does not work out, then he could come out politically damaged. How much - we never know. But certainly the GOP could feel emboldened to challenge him after such an early succcess.

Final word: I think it will pass - but receive substantial modification. Although a majority of the public hates the current version, a majority also wants some version to pass.

FLRN said...

Darren - I do like the idea of a tax credit - but it seems a bit high and this could encourage boomerang with unintended consequences. Here in Florida we do have a very effective program for homebuyers looking to save on their permanent residence, similar (but not the same) to the newly proposed tax credit ~ in Florida it is called Homestead Exemption and guess what? It works!
If congress wants to save taxpayers money and ensure good credit histories why not also consider a simple reform measure and add in mandatory education for everyone who applies for a home loan? The class should cover mortgage language and lending programs - kind of like having first time driver take a book and road test, or new mom go through parenting instruction before leaving the hospital with a newborn! Many of the existing fiscal problems today could have been avoided had the buyer understood what they were entering into with the lender. Ethics dictate that big business and our banks have a responsibility to make the process more transparent to the uninitiated by truly "explaining" the loan Sharking" credit burden and what it really means for the haul. After all the Ponzi scheme does come to an end and there are consequences as we try to survive the fiscal mess created by "the rob-Peter to Pay-Paul" behavior apparent in most homes across the country. This very phenomenon is what we are witnessing and is the lesson to be learned from the recession we have today~

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