Obama, lawmakers to meet on economic stimulus

[January 23, 2009]  WASHINGTON (AP) -- Congressional leaders and President Barack Obama are having a hard time finding common ground on an economic recovery plan as Republican resistance to the stimulus package emerges in the House.

The president and top Democrats and Republicans from the House and Senate planned to meet Friday to discuss the status of the spending and tax cutting legislation that Obama has demanded to confront an ever weakening economy.

The stimulus legislation, priced at about $825 billion and likely to grow, advanced in House committees this week. Republicans, who are in the minority, were unable to make inroads with their proposals.

The House Ways and Means Committee on Thursday approved $275 billion in tax cuts on a party-line vote of 24-13. The House Energy and Commerce Committee, also working on the bill, cleared $2.8 billion to expand broadband communications service. And on Wednesday night,the House Appropriations Committee approved a $358 billion spending measure on a 35-22 party-line vote.

Democratic leaders have promised the measure will be ready for Obama's signature by mid-February.

On Friday, Senate Finance Committee Chairman Max Baucus was expected to unveil a Senate version of the tax cutting portion of the bill. The legislation could have a more bipartisan look in the Senate, where it takes 60 votes out of 100 to overcome procedural blocks.

Obama is scheduled to meet with House Republicans next week, at the their request. But by then the House bill could be on the floor awaiting a vote.

"Yes, we wrote the bill. Yes, we won the election," House Speaker Nancy Pelosi said Thursday. "But that doesn't mean we don't want it to have sustainability and bipartisan support, and the president is working hard to get that done."

House Minority Leader John Boehner, R-Ohio, protested: "While we appreciate the chance to work with the president, it appears that House Democrats are going to continue to barrel ahead without any bipartisan support."

Obama's meeting with the bipartisan leadership Friday comes in the midst of increasingly grim economic news. Government reports showed the number of new jobless claims was up and new home construction hit an all-time low in December. Microsoft Corp. said it would slash up to 5,000 jobs over the next 18 months, while chemical maker Huntsman Corp. said it would cut more than 1,600 employees and contractors combined.

Republicans have been seeking deeper tax cuts and have said there was no reliable estimate of the bill's impact on employment.

"Our plan offers fast-acting tax relief, not slow-moving and wasteful government spending," Boehner said, referring to a study by the Congressional Budget Office that questioned administration claims that the money could be spent fast enough to reduce joblessness quickly.

In response to the study, Peter Orszag, the director of the White House Office of Management and Budget, sent a letter to Senate Budget Committee Chairman Kent Conrad, D-N.D., late Thursday pledging that at least 75 percent of the stimulus package would be spent in 2009 and 2010.

On a key vote Thursday, Democrats preserved a tax break for this year and 2010 that would mean $500 for many workers and $1,000 for millions of couples, including those whose earnings are so low that they pay no federal income tax. They also voted down a Republican effort to eliminate a health insurance subsidy for laid-off workers.

"We need to be dealing with people at the bottom of the income scale," said Rep. Jim McDermott, D-Wash. He also noted that the legislation would provide a $25-per-week increase in unemployment benefits.

But Rep. Dave Camp of Michigan, the top Republican on the tax-writing committee, cited a report by the nonpartisan Congressional Research Service that he said showed lower- and middle-income workers already would have received most of the benefits from the proposal to eliminate the tax on unemployment benefits.

Separately, the House Energy and Commerce Committee late Thursday approved a $2.8 billion program that would expand broadband service into underserved areas. It also approved various programs costing an estimated $27 billion to promote energy efficiency.

The panel also passed a $20 billion effort to speed the creation of electronic health records, and it approved more money to help states afford increased enrollment under Medicaid, the health care program for the low income. In all, the additional spending for health care programs totals about $150 billion over five years.

On another aspect of Obama's economic plan, lawmakers from both parties in the House got to vent about the $700 billion rescue plan for the financial sector.

In a symbolic vote, the House voted to reject Obama's request for the unspent $350 billion in the bailout fund. The 270-155 tally was a moot point because the Senate had refused to block the release of the money last week. That effectively made it available to the new administration.

[Associated Press; By JIM KUHNHENN]

Associated Press writers Andrew Taylor, David Espo, Stephen Ohlemacher and Kevin Freking contributed to this report.

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