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Fallout: The Financial Crisis

House and Senate reach stimulus deal

Marketplace Staff Feb 11, 2009
Fallout: The Financial Crisis

House and Senate reach stimulus deal

Marketplace Staff Feb 11, 2009


KAI RYSSDAL: This might be too high to set the bar, but when the economy eventually does recover the events of this Wednesday might well have been the turning point. The House passed its stimulus package two days ago. The Senate just yesterday. Less than 24 hours later — boom — there’s a deal.

Our Washington Bureau Chief John Dimsdale is on stimulus patrol today. Hi, John.


RYSSDAL: I almost didn’t believe it when I saw the news break that this deal had been reached. Crazy fast.

DIMSDALE: Pretty fast. Pretty fast. Well, it seemed like all sides just sort of locked themselves in a room late yesterday afternoon and started going through the proposals line by line. They resumed again this morning. But, you know, in the end the two bills were close in size and the bulk of the spending was the same. There really was only a $40 billion difference that had to be hashed through.

Harry Reid, the Senate majority leader, referred to that when he announced this agreement.

HARRY REID: The bills were really quite similar. I’m pleased to announce that we’ve been able to bridge those differences. Like any negotiation, this involved give and take and, if you don’t mind my saying so, that’s an understatement.

So, it looks like this bill is headed now for a conference committee approval. And then on to the House and Senate floors.

RYSSDAL: All right, down to brass tax, though, John. What’s in, what’s out? Who wins, who loses?

DIMSDALE: Well, the agreement was that they would be below $800 billion, so they’ve settled on $790 billion, which is a cut of $30-$40 billion. And they want to keep the support of at least three Republican senators. So, despite some lobbying by governors, the final deal slashes $35 billion from aid to states. It eliminates $16 billion in aid for school construction. But the president will have his make-work, pay-tax break for individuals. Although, it might not be quite as large as he first proposed at $500 an individual. The final bill will keep a tax credit for home buyers, although, again, maybe not the full $15,000 that the Senate approved. The House is apparently willing to accept the fix for the Alternative Minimum Tax. That doesn’t really stimulate the economy but it does shield upper-middle-class workers from higher taxes.

RYSSDAL: Prognosticate for me for a minute here, John. The president got shut out in the House — 188 Republicans voted against this thing. All of them. Any chance he’s going to pick up some votes this time around?

DIMSDALE: Probably not. There’s not much here for the House Republicans to sign on to. He will keep the three Republican senators — Olympia Snowe and Susan Collins of Maine, and Pennsylvania Republican Arlen Spector. All three of them were at the announcement of the deal this afternoon. Sen. Snowe said the agreement satisfies her bottom line.

OLYMPIA SNOWE: The key is making sure that we provide everything in this legislation that isn’t just a matter of spending federal dollars, but every dollar is spent efficiently and effectively, and that is geared for stimulus.

RYSSDAL: Last thing, John, before we let you go. . . . Now what happens? I mean, just because we’re spending $790 billion doesn’t mean the economy’s fixed, right?

DIMSDALE: Well, the promise of this is that it will, first, give consumers some cash in their pockets to spend at the mall. It’s supposedly going to create 3.5 million jobs, as well as build some necessary infrastructure and transportation and energy and education. Which, in the president’s vision, creates a more efficient and smoother-running economy in the long run.

RYSSDAL: Marketplace’s John Dimsdale in Washington, talking about the stimulus bill. Thank you, John.

DIMSDALE: You’re welcome, Kai.

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