The Presidents Stimulus plan hits the skids

Feb 3,2009

With public opinion turning sour over a big-government economic recovery package, some taxpayer advocates and officials are posing the question that seemed verboten in Washington just a week ago:

Who needs a stimulus?
said Michael Steele, newly elected Republican National Committee chairman, in an interview with FOXNews.com Tuesday.

A Gallup poll released Tuesday finds a strong majority of Americans want Congress to pass some form of stimulus, but have severe doubts about the measures currently being considered to boost the economy.

Though Republican senators are trying to negotiate an alternative bill with Democrats as debate gets underway in their chamber, the unanimous opposition of the House GOP last week to a $819 billion bill signaled that some lawmakers are prepared to reject a stimulus outright, rather than engage in what appears to be an uphill fight for significantly reduced spending.
Most Americans are now looking for major revisions in the way the government is approaching the recession.
A Gallup poll out Tuesday showed that a majority of Americans want Congress to either reject or make "major changes" to the economic stimulus package on Capitol Hill.
The poll, conducted from Friday through Sunday, found that 75 percent of Americans want Congress to pass some version of the plan. But the survey reflected deepening doubts about the effectiveness of the programs and spending items currently being considered by federal lawmakers. Only 38 percent of those polled favored the existing stimulus proposal, down from a slight majority holding that view in the Jan. 28 Gallup survey.
Thirty-seven percent want major changes and 17 percent reject the plan outright.
"This idea that the public is not excited about this package ... is really having an effect on Capitol Hill," Sen. Lindsey Graham, R-S.C., told FOX News, adding that most of the Senate suffers from a "herd mentality" and is swayed by public opinion.
"There's nothing inevitable about this," said Phil Kerpen, director of policy at Americans for Prosperity. "The American economy is enormously resilient and it's always recovered in the past."
Americans for Prosperity has launched a petition on the Web site called NoStimulus.com to oppose what it calls the "big-government pork-barrel spending bill."
The conservative Cato Institute also recently took out a group of ads with a statement, signed by 200 economists, saying they "do not believe that more government spending is a way to improve economic performance."
The Senate is currently debating a nearly $890 billion version of the bill, and top Democrats wanted to add $25 billion in highway and mass transit funds during debate Tuesday. Republicans want more provisions to make housing more affordable.
President Obama said Tuesday that the nation can't afford the "same partisan gridlock" on the measure, and assured that the "vast majority" of investment would be made in the next 18 months.
With such a clamoring for the bill, Kerpen said, realistically, he expects a stimulus of some form to pass. But he said the bill in its current form was dealt a "severe and perhaps mortal blow in the House" that could lead to a much different version on the Senate side.
Steele said his party members could possibly sell the program to their constituents if it contains more tax relief. Steele said he wants the plan to eliminate the capital gains tax, for instance. But he told FOXNews.com that Republicans should continue to lock arms against the bill if it retains the "wacky spending" items in the bill now.
Steele said the economy would likely recover within a couple years anyway, and government actions like the first stimulus package last year and the $700 billion financial bailout have produced, "In a word, nothing."
"I think if the government were to get out of the way and let the small business community and corporations of America weed themselves through this process, it's survival of the fittest," Steele said.
The Washington Post reported Tuesday that banks have generally not used the money they received through the financial rescue package to increase lending as was intended. The article reported that banks receiving government money on average cut back on lending more sharply than those that did not receive funding. However, Citigroup announced Tuesday it will make $36.5 billion available for credit cards and home loans.
The Gallup poll also found that even with a stimulus package, only 10 percent of people think the economy will improve this year as a result of the plan. Fifty-three percent said the plan will either have no effect on their families or make their financial situations worse.
The poll reflects a substantial partisan divide, with 59 percent of Democrats calling for passage without changes while 43 percent of Republicans want major changes and another 35 percent reject it.
But even Democratic leaders on the Hill are calling for significant changes. Nebraska Sen. Ben Nelson told FOX News he's looking to strip out "tens of billions" of dollars worth of spending items from the bill.
Sen. Claire McCaskill, D-Mo., a top Obama ally, told FOX News Tuesday that some of the spending is uncalled for in this package.
"We've got to cut some of the spending for programs," she said. "This is not the place to increase spending on programs."
She criticized billions for programs like alternative energy loans and the Census Bureau.
"We may have to fund the Census Bureau but not in a stimulus bill," she said. "That's the problem here. We have got to be disciplined about making sure this bill does only two things: Get money directly into the economy and create jobs. Period. That's it," McCaskill said.
FOXNews.com's Judson Berger contributed to this report.