On Tuesday, Feb. 10, the Senate passed an economic stimulus bill of $838 billion. The bill passed with a 61 to 36 vote, only three Republicans voting in favor of it. The House of Representatives passed an $819 billion version of the package on Jan. 28 with no Republican support.
The Senate’s two-year package includes a $15,000 tax credit for homebuyers and $3.4 billion in repairs to public parks, in an effort to cushion the ongoing economic recession.
Economic stimulus refers to the use of fiscal policy-government spending or tax measures-to support or revive an economy in recession.
In his first prime-time press conference, President Obama said the stimulus plan “will save or create up to four million jobs over the next two years, ignite spending by business and consumers alike and make the investments necessary for lasting economic growth and prosperity.”
Both versions of the bill have come under intense criticism from numerous Republicans, referring to the plan as unfocused and wasteful.
According to the Washington Post, Senate Republican leader Mitch McConnell said in debates before Tuesday’s vote, “The president was right to call for a stimulus, but this bill misses the mark. It’s full of waste. We have no assurance it will create jobs or revive the economy. The only thing we know for sure is that it increases our debt and locks in bigger and bigger interest payments every single year.”
In monetary amounts, both packages are similar but there significant differences-over tens of billions of dollars in aid to local and state government, education programs, renewable energy and tax provisions-exist between them.
Medicaid and school construction were two top priorities in the House that the Senate skimmed on or dropped completely in their version of bill. In regards to taxes, the Senate proposed a temporary solution to the alternative minimum tax as well as several breaks that have the potential to fall off the table.
The nonpartisan Congressional Budget Office said Wednesday that this recovery package will do more harm to the economy in the long run than if the government had done nothing. They claim it will result in so much government debt, leading to a lower Gross Domestic Product over the next 10 years.
With both versions passed, the package will now head to a House-Senate conference to compromise the differences in hopes to reach a decision by the self-made deadline of Friday, Feb. 13.
Over the past few days, Obama has publically encouraged negotiators to reintroduce education provisions that were stripped from the Senate version in order to lower the overall cost of the bill.
In his Monday night press conference Obama said, “this plan will put people to work right now by making direct investments in areas like health care, energy, education and infrastructure-investments that save jobs, create new jobs and new businesses and help our economy grow again.”
This bill has the potential to be the most important piece of legislation written during Obama’s administration and will change our country forever.