Tuesday, February 10, 2009

The Daily Strike-2/10/09-Into Conference and Off to Florida

Good Tuesday evening and welcome to the Daily Strike! The stimulus fight has somewhat of an end in sight, so let's get to it.

STIMULUS: The stimulus package officially passed the Senate today by a vote of 61-37. As expected, all Democrats voted for it, as did Republicans Snowe and Collins of Maine, and Specter of Pennsylvania. (also, John Cornyn decided to show up this time!). The vote on final passage followed a vote to waive budget rules. The result of that vote was the exact same. Each vote required 60 tallies for passage. The bill now moves on to a House-Senate conference, which apparently began this afternoon behind closed doors.

The House debated a motion to go to conference, which members used as a chance to laud or attack the stimulus. Basically, this motion declares that the House does not accept the Senate's version of the bill, and it wants to reconcile a difference in conference. This was agreed to by voice vote. The House proceeded to a vote to "Instruct the Conferees." This is a non-binding measure which serves to "advise the conferees" on the conference. This particular motion called for conferees to wait 48 hours after seeing the final bill before voting on it. The motion passed unanimously. Are they really gonna wait 48 hours after the conference issues its report to vote on the final bill? Who knows, but this vote wasn't binding, so it wouldn't break any rules to do so.

The House then proceeded to vote on some non-controversial measures under suspension of the rules. Both chambers are largely unsure of their business for the remainder of the week because they are waiting on the outcome of the stimulus conference.

THE CONFERENCE: I happen to believe that a House-Senate conference is one of the least democratic features of our system of government. Basically, each house appoints a few members who go into a room for a few hours and make a deal. I'm not even sure they show the conference on CSPAN. In the last Congress, there weren't many House-Senate conferences, for a variety of reasons. One, was that Jim DeMint of South Carolina would block unanimous consent requests to go to conference because he didn't like the content of various bills. On other occasions (like the bailout and the foreign intelligence bills), things moved so quickly that each House ping-ponged versions of the bill to each other until both houses approved something. The bottom line is that I know NOTHING about what will happen in this conference, how long it will take, or what it will ultimately produce. House Majority Leader Steny Hoyer said the process could take up to a week (which would cut into Congress' scheduled recess), but Senate Majority Leader Reid says that they can come up with something in the next 24 hours. My guess is that it takes a few days before they work things out.

In my view, there are two issues here: the policy and the politics.

On the policy side, the House bill seems to be a lot better to me. The Senate bill cut direct aid to state governments, which would enter the economy immediately and restore key services to people who have been hit by major budget shortfalls. The Senate also cut some of the spending on public education (just so the moderates could make an ideological point, more on that coming up from The Big Picture). Despite these crucial cuts, the Senate bill actually costs more than the House bill, because they've added in some questionable provisions. One was an amendment offered by Senator Isakson, Republican of Georgia, that gives a 15,000 dollar tax credit on the purchase of new homes. I don't see how that will provide immediate stimulus, nor do I think it will reach the people most in need, who would NEVER be able to purchase a home right now. The Senate also included a temporary fix for people affected by the Alternative Minimum Tax. The tax, originally designed to hit the very wealthy and make sure they didn't deduct their way out of tax liabilities, was (geniously) never adjusted for inflation. Congress keeps passing temporary fixes of this. I'm not ideologically opposed to this fix, and it is needed to help upper middle class families avoid huge tax bills, but again, I don't think this is as effective as government spending on job creations. Finally, the Senate has a tax credit for people purchasing a new car (seriously!?!??! I just bought a car three weeks ago!).

I would suspect that most Democrats in both houses would agree with me that the House package, on the whole, is better. But no matter what happens in conference, the bill WILL pass the House. The Democrats have some 39 votes or so to spare. The same can't be said for passage in the Senate. In order to overcome an expected Republican filibuster, the Democrats will need to hold on to those moderate Republicans. The calculation for the conferees is how much can you change the bill without losing the support of Collins, Snowe and Specter? (On this topic, why aren't the three of them in the room during these negotiations?)

In the Senate, the Democratic conferees are Senate Majority Leader Harry Reid, Senator Baucus of Montana (who is chairman of the Finance Committee) and Senator Inouye of Hawaii (who is the Appropriations chairman). The Republicans are Senators Grassley of Iowa and Cochran of Mississippi, the ranking members of the finance and appropriations respectively. The House has not announced its conferees. I'm not sure when we'll know about what happens in this secret society, but as soon as I find out the wheres and whens, I'll let you know.

OBAMA ON THE ROAD: Obama today held another town hall meeting, this time in Fort Myers, Florida. He was joined by Republican Governor Charlie Crist who supports the stimulus. Because Obama's people don't screen the questions (unlike Bush), there are some strange moments in these events. One woman, overcome by tears, asked Obama how to help her escape homelessness. It was a stark reminder that this isn't a game. There are real people suffering out there, and I think a lot of us in Washington forget that too easily. It was one of those "why am I writing a blog about Congressional procedure?" moments for me. But then I remembered that like Bill O'Reilly, I'm looking out for "the folks."

GEITHNER'S NEW PLAN: On top of all of this stimulus hubbub, Treasury Secretary Tim Geithner gave a very important speech outlining new strategies for the federal bailout money. The strategies include:

-First, federal bank regulators will be setting standards to strengthen bank viability, and will be conducting "stress tests" to make sure a bank can survive an economic downturn (what we should have done with the Lehman Brothers/CitiBanks of the world).

-Second, aiming to cure frozen capital markets, the Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation will create a new public-private investment fund that aims to incentive private companies to buy up toxic assets weighing down bank balance sheets. This would be slightly different than previous proposals to have the government buy all of the assets. Now, some of the purchases will be made by private companies, who could use this as an investment opportunity.

-Third, the Obama administration will "undertake a major expansion of a consumer-business lending program to kick start secondary markets and get much-needed credit flowing to consumers and businesses." This will help credit flow to people and businesses who would have no chance of obtaining credit otherwise in this market.

-Finally, the Fed and the Treasury will commit $50 billion to reduce monthly mortgage payments.

These all seem like reasonable measures, although not as ambitious as some had hoped. The Treasury isn't setting strict rules on how the banks can spend bailotu funds. The conventional wisdom in the media seems to be that Geithner's press conference lacked specifics. He was even criticized by members of both parties, and the editorial board at various newspapers.

PAY CUT: Finally, the House is going to vote to skip their scheduled pay increase once the omnibus budget bill reaches the floor this month. This will help them seem more sensitive to the cutbacks faced by American families. I'm excited to see how Republicans choose to oppose this.

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