Senate Approval of Stimulus Plan is “a Good Start” But There is Still Plenty of Work Ahead

Sources:
Wall Street Journal
Financial Times

Today, three moderate Republican senators crossed party lines to give the Democrats one more vote than necessary to defeat the filibuster and approve the economic stimulus plan. The final vote was 61-37. The deal accorded between the Republican and Democrat senators is extremely fragile, however, which gives rise to fear that this alliance may break when the House and Senate reconcile their different versions of the bill.

Most Republican senators refrained from approving the bill, contending that it was not the most effective way to stimulate the economy. Instead, they proposed more tax credits and less government spending. The three moderate Republicans approved the plan only after the Democrats cut more than $100 billion. Susan Collins, one of the three Republicans to support the bill stated that she will vote against the final legislation if the spending restrictions in the Senate bill are breached.

While both the House and Senate bills share the goal of stimulating the economy, each favors different methods to achieve the goal. The final Senate bill totaled $838 billion with a large focus on stimulating new car and home purchases as well as $45 billion flagged for transportation infrastructure. This amount is $15 billion more than the transportation infrastructure item in the $819 billion House bill. The House bill also earmarks more funds for state governments’ education budgets and favors medical insurance benefits for citizens who’ve lost their jobs. Another major difference is the source of funds; the House bill contains $100 billion more spending than the Senate bill, but the Senate bill makes up for this in tax cuts.

Congress and President Obama would like to have the final version ready within a week in order to get the funds into the economy as soon as possible. To do this, the House and Senate will have to reconcile the two different bills. House Majority Leader Steny Hoyer expressed concern over the fragile situation in the Senate: "obviously we're confronted with the reality that if you have three people say, ‘look, if you change anything we're jumping ship,’ that's going to affect the tenor of the conference." Despite the tremendous impending task ahead of Congress, President Obama remains hopeful calling the Senate approval “a good start.”

Questions:
1) Do you think that the three moderate Republican senators will have as great an influence on the final version of the bill as they did on the Senate version?
2) Is the goal of reaching an agreement within one week feasible? Will this time crunch lead to hasty decisions that will be regretted in the future?