Obama team, Congress fleshing out stimulus bill

Published 4:32 pm Friday, December 19, 2008

WASHINGTON — President-elect Barack Obama ‘s team and congressional staff are scrambling to come up with details of a plan to pump up the droopy economy with $650 billion or more in government spending over the next few years.

The aides met in the basement of the Capitol on Friday to devise ways to pump public money into science, energy, education, health care and infrastructure programs, as well as to help the poor and unemployed.

They hope unleashing a torrent of spending in the near term will create jobs and lift the economy.

But the amounts of money under consideration are so enormous — larger than either the Pentagon’s annual budget or the entire domestic budget passed each year by Congress — that it’s likely to prove challenging to spend so much without wasting taxpayer dollars.

Obama and his Democratic allies in Congress want to enact the still-emerging plan as soon as possible after he takes office on Jan. 20. They hope to agree on an outline by Christmas, said a House Democratic leadership aide, who requested anonymity to discuss the ongoing talks.

The plan, which some Obama aides think could swell to about $850 billion after negotiations with Congress, would be the largest investment in public infrastructure since the federal highway system was established in the 1950s. It also would provide tens of billions in dollars of aid to financially strapped states.

Obama declined Friday to put a price tag on his plan, but said the economic problems require a bold approach.

“I’m not going to give you a number because we’re still making these evaluations,” he said in response to a question at a Chicago news conference where he named four new members of his administration. “But you are exactly right that what we’ve seen, in terms of the evaluation of economists from across the political spectrum, is that we’re going to have to be bold when it comes to our economic recovery package.”

Obama said he is a taxpayer, too, and doesn’t want to see money wasted.

“Every dollar that we spend, we want it spent on projects that are there not because of politics, but because they’re good for the American people,” he said.

Other items in Obama’s spending plan include middle-class tax cuts that have yet to take shape, roads and bridge construction and repair, funding to make federal buildings more fuel efficient, huge investments to modernize information systems across the health care sector, boosting access to broadband, school construction, and cleanup of superfund sites.

The Obama team and congressional Democratic leaders hope the measure won’t devolve into a “Christmas tree” bill decorated with individual lawmakers’ spending wishes, but Congress members are being inundated with requests from interest groups.

“Only those items that spend out quickly, create jobs, and constitute sound national policy should be considered for inclusion in the package,” said a memo from the office of Senate Majority Leader Harry Reid, D-Nev., that characterized the views of the Obama transition team.

Key Obama advisers have cautioned that the economy can only absorb so much public investment without running the risk of diminishing returns.

The Obama transition team and Democratic aides caution that they have not settled on a specific grand total. But with every passing day, it seems the measure’s price tag is growing. Just on Monday, House Speaker Nancy Pelosi upped her estimate of a potential package to about $600 billion, a $100 billion increase above the half-trillion-dollar estimate previously blessed by her office.

Balancing the upward pressure on the cost is a need to get moderate “Blue Dog” Democrats to vote for the measure, as well as Republicans in the Senate.

The evolving measure will blend immediate steps to counter the slumping economy — such as tax cuts, aid to states, an additional extension of unemployment benefits and a boost in food stamp allotments — with longer-term federal spending such as modernizing the electrical grid, and building roads, bridges and water projects that could take many years to finish.