by CHQ News Staff FEB. 6, 2009 - Failing to garner bipartisan support on its first go-around in the House, President Barack Obama's stimulus spending package is mutating as compromises and alternatives are proposed on both sides of the aisle in the Senate. Senate Republicans are proposing varying alternatives to Obama's spending plan. Additionally, the White House is engaging in talks of a compromise over a "Buy American" provision in the House-approved stimulus bill that has caused significant rancor among U.S. trading partners. Democrats and Lobbyists for American steel and iron companies are pushing hard for the provision to require their products be used in all stimulus-funded construction projects. In fact, the sponsor of the original "Buy American" provision that passed in the House version of the stimulus bill received more than $40,000 in campaign funding from steel lobbyists in his reelection campaign last year. In response to both domestic and international outcry, Obama says he will investigate alternatives to the current Buy American provision that do not violate trade rules. However, economists and business leaders say there is a grave danger in any type of protectionism built into the stimulus. "This Buy American momentum is bad economics, and by threatening to destabilize trade and capital flows, it risks turning a global recession into a 1930s-style depression," says Princeton economist Burton Malkiel in his Wall Street Journal editorial. "Buy American provisions and other forms of protectionism will destroy jobs, not create them. They are an irresponsible and self-defeating response to a downturn in world economic activity." Malkiel and others warn that Buy American provisions will spark a trade war with other nations, such as Canada and the EU, which will destroy thousands of American jobs. The stimulus plan has also ballooned to $900 billion—$75 billion more than originally proposed by the Obama administration—since the bill landed in the Senate. "There are a lot of sacred cows running around right now," says Sen. Ben Nelson [D-Neb.], referring to his term for the pet projects lawmakers are trying to fund in the bill. Politicians have taken the stimulus package as means of carving out hundreds-of-millions of dollars in porkbarrel spending for their districts. Such actions have given the stimulus package nicknames of "Porkulus," or "Spamulus." "I'm going to tell you what, the more that this kind of [spending] in this bill is learned, the more the American people are not going to want any part of this," conservative commentator Rush Limbaugh stated last week. "It's going to get even worse -- and they tell us, by the way, it's going to get even worse if this stimulus bill, porkulus bill goes to the Senate and the president signs it and so forth." Opposite the unity shown by House Republicans in opposing Obama's stimulus plan, Republicans in the Senate are proposing various alternatives for economic stimulus, with no one-plan yet to earn a majority of support. Senate Minority Leader Mitch McConnell has proposed a plan that provides government-backed mortgages at 4 percent to "credit-worthy" borrowers in an attempt to "fix" housing problems. In addition to McConnell's plan, Florida Republican Sen. Mel Martinez is proposing a $713 billion stimulus plan, which according to reports from CNN, include "$430 billion in tax cuts, $114 billion for infrastructure projects, $138 billion for extending unemployment insurance, food stamps and other provisions to help those in need and $31 billion to address the housing crisis." In his own alternative plan, South Carolina Senator Jim DeMint is proposing tax cuts instead of spending in his stimulus plan, earning some support from Republican Governor's Association Chairman Mark Sanford—one of the leading critics of spending-based stimulus packages. "We think Jim is on the right track with this plan," said Sanford in a statement. "If the goal is to stimulate the economy now, we need to do it with direct and permanent tax cuts rather than massive spending increases that drip into the economy over ten years' time. If a stimulus plan is indeed inevitable, we're hopeful that the Senate will move in this direction and away from what's currently contemplated." Some reports suggest the vote on the spending package will come late today or early next week, giving very little—if any—time for Senators to read the final version before it is voted on. The House's version of the stimulus package was more than 600 pages, and surely will be dwarfed by the Senate version. The rush to approve this bill, says Obama, is crucial to the economic stability of the nation. "Each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes," Obama stated in a recent op-ed. He added that if government didn't act immediately, "this recession might linger for years." Conservatives say spending-based stimulus packages are worse than doing nothing. -30-
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