ARRP Approved by House Committees Clearing First Hurdles for Economic Stimulus
Introduction
Last week, the House Ways and Means, Appropriations, and Energy and Commerce committees all marked up the American Recovery and Reinvestment Plan (ARRP). With the favorable reporting of the legislation by all three of these key House committees, Majority Leader Steny Hoyer (D-MD) has announced that the combined package (H.R. 598) will be considered on the floor on January 28.
The Senate Appropriations and Finance committees will hold markups of the upper chamber’s version of the legislation this week, both of which are tentatively scheduled for Tuesday, January 27. While the Senate version of the bill is expected to be similar to the House’s some significant differences are likely such as the inclusion of an Alternative Minimum Tax (AMT) patch, a provision that does not appear in the House bill.
President Obama’s plan to obtain widespread bipartisan support for the legislation appears to be in jeopardy as Republican opposition to the stimulus is mounting in both houses of Congress. Republican leaders objected to being shutout of the legislative drafting process as well as the inclusion of Democratic agenda items, such as federal funding for the arts, that they believe have no place in a bill intended to quickly revive a faltering economy. While it will be difficult for the GOP minority to derail the package, it appears Democrats are in store for a fight once the legislation reaches the floor and passage may come through a largely party-line vote.
In an effort to broaden support for the package and increase Republican support, President Obama will hold a meeting at the White House this afternoon with the House and Senate leadership of both parties. While President Obama acknowledged Republican objections and Democratic infighting over specifics, he called for Congress to unite in recognition that the bill must be passed to address the economic crisis. The president has asked Congress to clear the legislation for his signature by February 16, a date Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Mitch McConnell (R-KY) have pledged to support.
Summary of the House Appropriations Committee Markup
On Wednesday, January 21, 2008, the House Appropriations Committee marked up the Economic Recovery Package, H.R. 598. During the opening of the markup, both the majority Democrats and the minority Republicans declared their commitment to working in a bipartisan fashion to pass the spending legislation. Despite these declarations, the seven hour markup grew contentious at times. However, in the end the committee voted to report the bill by a roll call vote carried by the ayes, 35-22.
Almost every member of the minority used their time for opening statements to express their displeasure with the process by which the majority brought H.R. 598 before the committee for a markup. The Republicans complained that the bill did not go through regular order and that the members did not have sufficient time to review the bill prior to the markup. The minority noted that not a single subcommittee held a hearing regarding the bill and that they did not receive copies of the bill until the Friday prior to the markup.
Committee Chairman Dave Obey (D-WI) noted that the minority had boycotted a full committee hearing on the stimulus package.
Many members of the minority expressed concern about the total cost of the package, which comes in at $825 billion. Rep. Mark Kirk (R-IL) told the committee that the economic recovery package would create jobs at a cost of $400,000 per job, while the private sector created jobs at a cost of $50,000 per job. Other Republicans expressed concerns about the government’s ability to borrow enough money to fund the stimulus legislation and doubts about the efficacy of government spending.
Chairman Obey argued that while the economic recovery bill may not be perfect, Congress needs to act quickly in order to prevent the recession from deepening.
Summary of the House Ways and Means Committee Markup
On January 22, the House Ways and Means Committee passed by a vote of 24-13 the roughly $275 billion tax portion of H.R. 598, the American Recovery and Reinvestment Act (ARRP).
Although the committee session lasted nearly five hours, Chairman Charlie Rangel’s (D-NY) original draft proposal went largely unscathed following the amendment process, as only two Republican amendments were incorporated into the final version. The accepted amendments were one offered by Rep. Yarmuth seeking to prevent illegal immigrants from collecting the “Making Work Pay” (MWP) tax credit and a second amendment offered by Rep. Roskam requiring the GAO to report on the ARRP’s job creation effects.
Ways and Means Ranking Member Dave Camp (R-MI) began the hearing by echoing Republican criticism regarding the ARRP’s total $825 billion cost, lack of emphasis on tax incentives, and its effectiveness in spurring American job creation. More specifically, several Republicans lambasted the MWP tax credit due to objections that the number of taxpayers receiving more in refunds than they actually pay in payroll taxes would jump from 15 million to 22 million. Despite his caucus’s strong concerns, Camp did not offer a substitute bill for consideration, opting instead to discuss alternative ideas directly with President Obama when GOP leaders are expected to meet with the President tomorrow.
A notable exclusion to the Ways and Means bill was a one-year “patch” for the Alternative Minimum Tax (AMT), a $70 billion provision that would prevent 25 million additional taxpayers from being exposed to the tax. Although Rep. Kevin Brady’s (R-TX) AMT amendment failed on a party-line vote, Chairman Rangel predicted during the markup that the Senate Finance Committee would ultimately include the one-year patch following its upcoming markup, potentially raising the ARRP total to around $900 billion.
Other notable failed amendments included one offered by Rep. Paul Ryan (R-WI) that would temporarily freeze increases in the capital gains and dividend taxes, an amendment offered by Rep. Sam Johnson (R-TX) that would eliminate income tax liabilities for those collecting unemployment benefits, and an amendment offered by Rep. Camp that would eliminate the MWP tax credit and reduce the tax rate for the two lowest income brackets by 5 percentage points each.
Summary of the House Energy and Commerce Committee Markup
The House version of the economic stimulus legislation continued to advance through the committee process yesterday as the House Energy and Commerce Committee marked up the portion of the bill under its jurisdiction, which includes spending associated with broadband infrastructure, clean energy technology, and healthcare and health information technology. The dollar amount falling under Energy and Commerce jurisdiction is about $150 billion of the $825 billion total economic recovery package. Each title of the bill was reported out separately and then substituted it into another piece of legislation (H.R. 628). Most of the titles were reported out with a voice vote. However, the Medicaid title passed with a roll call vote of 32-11 and the title addressing insurance assistance for the unemployed passed by a roll call vote of 32-12.
In anticipation of expected Republican complaints, new Energy and Commerce Chairman Henry Waxman (D-CA) began the hearing by indicating that he too wished there was the opportunity for a longer timeline to review the legislation. However, with strict deadlines set by Democratic leadership to give floor time to the package next week, Waxman worked out a deal with Committee Ranking Member Joe Barton (R-TX) to allow a series of amendments within each area, but ensure that that markup was completed in one day.
During opening statements, Democrats lauded the bill. Most stated that not only were many of the provisions necessary to improve the lives of American citizens, but they were integral to restarting the American economy. Waxman’s comments at the beginning of the markup did not deter Republicans from complaining about the short timeline they were forced to deal with, including no hearings or subcommittee markups on the bill. However, both Republican and Democratic lawmakers complimented Waxman for insisting that the appropriate portions of the economic recovery package move through Energy and Commerce.
Notice: The purpose of this newsletter is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This alert should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel