Stimulus Bill Advanced by House Panel

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On a strictly party-line vote, the House Appropriations Committee last week approved the $550 billion spending portion of a mammoth bill aimed at spurring the U.S. economy.

The $825 billion overall stimulus measure, which also includes $275 billion in tax relief, would provide more than $120 billion for education, to help schools and colleges avoid drastic cuts because of state and local budget shortfalls amid the recession.

Republicans on the panel balked at the bill’s cost and argued that only a relatively small slice of the measure would go toward “shovel ready” projects, meaning infrastructure projects that can put people to work immediately.

And they worried that distributing so much money so quickly would lead to poor decisionmaking on the part of states and local governments.

“I don’t question the urgency of this package. I question [some of] the priorities and the price tag,” Rep. Jerry Lewis of California, the top Republican on the appropriations panel, said during the meeting. And he expressed his worry that “large increases in domestic programs could create unrealistic expectations in future spending.”

Rep. David R. Obey, D-Wis., the Appropriations Committee’s chairman and a leading author of the legislation, argued that one of the major purposes of the bill was to help local and state governments avert major budget cuts, including teacher layoffs.

He said he is also concerned about the bill’s bottom line.

“I’m sure that none of you are happy with the cost,” Rep. Obey said. “Neither am I. But the cost has to be measured against the size of the problem. And the problem is immense.”

Rep. Obey added that the economic crisis requires lawmakers to move more quickly than they normally would on such sweeping, costly legislation.

“This is an extraordinary circumstance,” he said.

Rep Obey left open the possibility for even more money to spur the economy later.

“This package may undershoot the mark, and we may have to make adjustments down the road,” Mr. Obey said.

The measure passed the Democratic-controlled committee late on Jan. 21, by a vote of 35-22.

Key federal education programs are among those that would receive major increases under the legislation. The Title I program, which serves disadvantaged students, would get an additional $13 billion spread over fiscal 2009 and 2010. The program received $13.9 billion in fiscal 2008. And the bill would provide an extra $13 billion for special education under the Individuals with Disabilities Education Act over fiscal 2009 and 2010.

In addition, the measure includes a $79 billion state fiscal relief fund, $39 billion of which is slated for school districts and public universities. Another $25 billion would be used for state and local priorities, including public safety, but could be directed to schools.

Republicans said that they were largely shut out of the process of developing the legislation. The package was crafted by House Democratic leaders and the new Obama administration.

But Rep. Obey contended that the Appropriations Committee took input from anyone who offered it.

At least one Republican on the committee expressed concerns about the $20 billion in school construction funding in the bill, $14 billion of which would go for K-12 facilities.

“The federal government has never gotten into the business of [financing] brick and mortar” for schools, said Rep. John A. Culberson of Texas.

He worried that districts might look to Congress to continue funding school construction into the future.

But Rep. Obey said he doesn’t expect such programs to continue when the economy improves.

“That program is easily dialed back,” he said.

Construction Tax Benefits

Democrats defeated a series of Republican amendments, including one that would have shifted some $60 billion in state and local aid slated for fiscal 2010, which begins next October, to immediate infrastructure projects. Some of the $60 billion is targeted for education programs.

Supporters of the provision argued that raising spending on programs such as special education won’t get the economy moving.

“What we seem to have done is gone in and said, ‘What are all the good things we could do if we had six or seven or eight hundred billion dollars to spend?’ ” Rep. Mike Simpson, R-Idaho, said. “And we’ve started to put money in every good thing, whether it’s economic stimulus or not.”

Rep. Simpson suggested that if Congress wanted to hike spending on special education and other programs, lawmakers ought to do so through the traditional appropriations process, not through a stimulus bill.

Rep. Obey said, however, that the extra money would prevent school districts from having to make major staff reductions.

“The fact is that every single one of the programs that you would take this money away from will indeed lead to jobs,” he said. “If you don’t provide this additional money to local school districts you will be laying off thousands of teachers, you’ll be laying off janitors, you’ll be laying off all kinds of other educational personnel, speech therapists, the whole bunch.”

The amendment was defeated on a largely party-line vote, 37-22.

Meanwhile, the House Ways and Means Committee last week also considered school construction as part of the $275 billion tax portion of the stimulus plan.

That panel’s portion of the bill includes $1.4 billion for the Qualified Zone Academy Bonds program, which permits states to borrow money for school repairs, with the interest paid by the federal government through a tax credit to bondholders.

And it includes more than $20 billion over fiscal years 2009 and 2010 in additional school construction tax cuts.

The full House is expected to consider the measure as early as this week.

Vol. 28, Issue 19, Pages 15, 17

Published in Print: January 28, 2009, as Stimulus Bill Advanced by House Panel
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