Senate Passes Stimulus, Geithner Announces Bailout Plans
FINANCIAL
New Hampshire Union Leader
Jillian Jorgensen
Boston Washington University News Service
February 10, 2009
WASHINGTON—In an effort to turn around the nation’s struggling economy, the Senate passed its version of the$838 billion economic stimulus package Tuesday, while Secretary of the Treasury Timothy F. Geithner announced plans for a new financial bailout program to rescue troubled banking institutions.
Sen. Jeanne Shaheen, D-N.H., voted for the stimulus bill, which passed 61-37, with only three Republicans voting for it. Sen. Judd Gregg, R-N.H., who is awaiting confirmation as President Barack Obama’s Secretary of Commerce, did not vote.
“I’ve said from the very beginning of this process that our top priority in getting our economy back on track must be to create and save jobs, and I believe the recovery package we have passed today achieves that goal,” Shaheen said in a statement.
Now the Senate and House, which passed its version of the stimulus package last month, must negotiate an agreement on what the final bill will include.
The Senate stimulus package would cost $838 billion; the House version would cost $820 billion.
The Senate bill added a $70 billion “patch,” which the House version did not include, to spare millions of taxpayers from having to pay the alternative minimum tax. It also includes $11 billion in tax deductions for loans on new car purchases and a yearlong $15,000 tax credit for people purchasing homes, as opposed to the House-passed $7,500 credit, which would last only until June and apply only to first-time buyers.
Shaheen, who voted for the amendment providing for the housing tax credit, said that problems in the housing market and the “financial collapse of lending” were at the core of the current economic situation.
“Obviously, we’ve got to address the housing market and we’ve got to address lending in order to be successful at what we’re doing,” Shaheen said in the Capitol after the vote. “I think this is something that we’ve got to work on, and I’m committed to doing that. And hopefully we will see a package come out of the committee of conference that will provide some relief to homeowners.”
But U.S. Rep. Paul Hodes, D-N.H., said the stimulus package will come down to “a question of balance,” and homeowner help will have to be balanced against other areas that need money.
The Senate’s tax credit for homebuyers, he said, is “ a greatly expanded program, with a vastly increased cost.” .
He said there were “certainly arguments to be made for spending a lot of money in the housing sector” but warned that if too much money is spent there, other areas will be left wanting. “You take away the ability, for example, to help states who are facing cuts to essential services.”
“It would be wonderful to do everything for everyone, and that simply won’t happen,” Hodes said. “There will be, I expect, some substantial give and take in the conference process. I expect the president to weigh in about his particular priorities.”
Hodes said one way to “bridge the gap” between the two versions was to remove the Senate’s alternative minimum tax patch from the stimulus plan, with the understanding that it would be passed later. That would free up $70 billion stimulus money to be spent elsewhere, Hodes said.
“Right now, going into this negotiation, my preference is for the balance that the House achieved as opposed to the balance that the Senate achieved.”
“This is a good bill, although I wanted to see more money directed towards infrastructure and for nutrition and education,” U.S. Rep. Carol Shea-Porter, D-.N.H., said in a statement. “The House and Senate still need to work out the differences between the two bills, but I am hopeful that we will get money to the states and into our economy very soon.”
Tuesday also saw the announcement of Geithner’s new plan to rescue the nation’s banking industry. Geithner also said that in the next few weeks he would announce the details of a comprehensive plan to address the housing crisis.
Shaheen said early Tuesday afternoon that she had not had a chance to review Geithner’s proposals “I know that he talks about foreclosure mitigation in that,” she said. “They’re also talking about a $50 billion fund, which I again haven’t seen yet, but hopefully it’s going to go to help homeowners.”
Hodes said the Treasury Department and Congress should work harder to educate the American people about the interplay between the financial system and the economy.
“The issues are so complex, and the numbers so vast, that minds boggle. It’s trying to explain, often, the concept of infinity when you start talking about the multibillions of dollars that are being discussed,” he said.
Hodes, who voted against the release of funds for the Troubled Assets Relief Program last year, sent Geithner a letter Tuesday expressing his concern over the lack of accountability of the program’s funds. An oversight panel determined last month that the government overpaid by $78 billion for the financial assets it purchased as part of the bailout.
“I voted against the release of the funds and I said at the time that I hoped I was wrong. I hoped I was wrong about the lack of accountability and oversight, I hoped I was wrong that there were inadequate protections for taxpayers,” he said. “Unfortunately, this is one of those circumstances where I’m sorry that I was right.”
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