WASHINGTON – Senators began talks with the House on Tuesday to determine which tax breaks and spending provisions will survive as part of a final stimulus package, but despite the optimism leaders in both chambers expressed about quickly resolving their differences, the negotiations are expected to be contentious.
Senate Democrats won passage of their version of the legislation yesterday by the narrowest of margins, leaving little room for negotiators to maneuver.
The 61 to 37 vote on the $838 billion package included three Republican “aye” votes, drawing the same three moderates – Susan Collins and Olympia Snowe, both of Maine, and Pennsylvania’s Arlen Specter – who provided the only GOP support Monday on a procedural motion to bring the bill to the floor.
Democrats in the House and Senate remain broadly unified around the central provisions of the legislation, which is intended to create or save up to 4 million jobs, but several disputes could extend negotiations beyond their goal of having a finished product by the weekend.
The shuttle diplomacy had already begun before the Senate vote Tuesday afternoon. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., paid an early morning visit to the White House to discuss the bottom lines of the two versions with President Obama. The leaders continued meetings into the evening, and both sounded optimistic that a deal could be struck quickly.
“We have a clear idea of what the differences are and hope to resolve them as soon as possible,” Pelosi said after meeting Tuesday afternoon with House Democrats. She said a final bill could emerge “hopefully before the end of this week.”
The Senate’s package is about $19 billion more than the $819 billion House package. It provides less in federal spending and more in tax breaks.
On the spending side, likely flashpoints include Medicaid and school construction, both top priorities in the House that the Senate scaled back or dropped. On the tax side, the Senate included several breaks that could fall off the table, including incentives to buy homes and automobiles, along with a temporary fix to the alternative minimum tax.
The homebuyer provision, a $15,000 tax credit for the purchase of primary residences, has received substantial attention since it was added last week on a Senate voice vote. But its primary sponsor, Sen. Johnny Isakson, R-Ga., voted against the Senate bill Tuesday, giving Democratic negotiators little incentive to retain the provision, which was estimated to cost nearly $40 billion over 10 years. Democratic negotiators said the tax measure may also be scaled back drastically.
Republicans continued to protest the bill’s size and content, suggesting that the House and Senate vote totals are unlikely to grow on final passage.
“We all know this is an emergency. We’re all in favor of taking some kinds of action,” said Senate Minority Leader Mitch McConnell, R-Ky. “But I do think it’s important to focus on the larger question of: Where are we going to leave the country in two years if we take all of these steps? We will have made a dramatic move in the direction of, indeed, turning America into Western Europe.”