House Democratic leaders are pushing for Congress to return for a lame duck session after the Nov. 4 election to take up a second economic stimulus bill, which will likely include infrastructure grants for state and local governments that could total nearly $300 billion.
However, in order to pass any package they put together, they will have to overcome a separate proposal from House Republicans, a skeptical Bush administration, and a divided Senate that has balked at passing such legislation in the past.
House Speaker Nancy Pelosi, D-Calif., and other House Democratic leaders convened Monday with economic advisers to discuss calling representatives back into session for a lame duck session focused on a new economic stimulus package. She said at a news conference following the meeting that hearings will be held on various aspects of a potential package during the coming weeks.
It is expected that House Democrats would include in the new package many provisions from a $61 billion stimulus package they approved last month, which failed to gain traction in the Senate. Among other items, that bill contained $12.8 billion in funds for highway infrastructure, $600 million for the Airport and Airway Trust Fund, $3.6 billion of transit capital assistance grants, and $500 million for Amtrak.
Michael Bird, federal affairs counsel at the National Conference of State Legislatures, said additional funding for infrastructure would be welcomed by state governments, but that it could have been used even earlier to help finance needed projects.
"Back in the spring when they did the first economic stimulus package, we heartily suggested that infrastructure grants ... be part of the package," he said. "If we had done that back then, right now we would be reaping the benefits of that economic activity. We've already lost half of a year."
But Barry Bosworth, senior fellow in economics at the Brookings Institution, said the bill should mainly consist of simpler, more direct tax relief in the form of rebate checks sent directly to individuals and families like in the first stimulus package.
"As a stimulus measure, infrastructure spending is not effective, the lags are too long," he said. "It's a good thing to do ... but trying to do it as part of a program to stimulate the economy is the wrong reason."
A second set of rebate checks could be included in the new stimulus package, as well as an extension of unemployment benefits, an expansion of the food stamps program, and additional aid to states struggling to come up with needed funds.
Meanwhile, House Minority Leader John Boehner, R-Ohio, argued for a parallel Republican package Monday, and said in a letter to Pelosi that the Democrat's pending package was "an irresponsible, business-as-usual approach that has earned this Congress the lowest approval ratings ever recorded."
Boehner instead called for a stimulus package driven by a cut in the corporate and capital gains taxes and a modification in offshore drilling laws to encourage domestic oil drilling. In a nod to Democratic interests, his plan would also include more incentives for renewable and alternative fuels.
The Bush administration had threatened a veto of the House's previous stimulus package, saying it would fail to stimulate the economy or create jobs, and would just be a vehicle for increased government spending. It is unclear if the administration would echo that concern regarding another package.