Congress, Eyeing Economic Woes, Weighs Another Stimulus Package

Economic conditions cause Congress to weigh another stimulus.

By + More

On the heels of the financial meltdown that felled Lehman Brothers and Merrill Lynch, expect a showdown in Congress as lawmakers wrestle over the need for a second shot in the arm for the ailing U.S. economy, one costing as much as $68 billion.

House Majority Leader Steny Hoyer said Tuesday that Democrats were assembling an economic stimulus package with money for infrastructure projects, unemployment insurance, help for low-income people to pay energy bills, aid to states to tackle Medicare and Medicaid costs, and possibly job training. Skeptical Republicans quickly labeled it a politically motivated move that would generate an even larger budget deficit.

But the Maryland Democrat said the country was facing the worst economic conditions in at least 50 years. "We believe a stimulus package is called for," he said. "It will be limited, simple, straightforward. It will deal with jobs and economic stimulus."

He would like the House to take up the package by early next week. The clock is running because lawmakers are scheduled to wrap up legislative business September 26.

Hoyer didn't put a price tag on the measure, which has been under discussion for several weeks, though other Democrats said Tuesday it would be in the range of $50 billion. [Rick Newman: What Obama Can and Can't Do to Create Jobs.]

But a top Republican aide in the Senate said he understood the package could balloon to $68 billion, and characterized it as an election-year ploy. Democrats have a 51-to-49 majority in the Senate and the measure's prospects are iffy there because it would need 60 votes to pass.

Last week, the nonpartisan Congressional Budget Office projected a near-record deficit of $407 billion for the year ending September 30 and signaled it could reach a record $438 billion in the year ahead. "Democrats ran to the microphones to scream about how not paying for things has driven us to the brink," the GOP aide said. "Here we are a week later, and they want to add $68 billion dollars to the deficit."

He noted the items on Hoyer's wish list already receive federal dollars. "There isn't $68 billion in a bank somewhere," he added. "This is all borrowed money." The aide singled out money for roads, bridges, and other infrastructure projects as a "payoff" to unions. [Check out a roundup of editorial cartoons on the economy.]

On the House side, the Blue Dog Democrats, who are fiscal conservatives, are eyeing developments amid concern about increasing the deficit.

The package would come on the heels of a $168 billion economic stimulus that saw tax rebates returned to many Americans beginning in April.