Washington: Economic stimulus encounters GOP resistance

WASHINGTON — While the economic stimulus bill enacted last February received widespread bipartisan support, a second package, proposed by House Democratic leaders to reinvigorate the sagging U.S. economy, is not likely to enjoy such broad backing.

Rep. Zach Wamp, R-Tenn., said he prefers a Republican alternative to the stimulus package that addresses energy issues.

“Their idea of stimulus is some form of welfare,” Rep. Wamp said of the Democratic proposal floated this week, which includes aiding states on Medicaid programs, expanding food stamp assistance and unemployment insurance and funding infrastructure projects.

“It’s more of a handout than a stimulus,” he said. “If we’re going to do a follow-up stimulus, it needs to be something that stimulates economic activity, not just a transfer of wealth.”

With the faltering economy a top concern among voters, Democratic leaders say their package is needed to help ordinary Americans in the wake of a $700 billion Wall Street bailout passed by Congress earlier this month.

Democrats say they plan to hold hearings over the bill over the next few weeks and, when a final draft is completed, possibly vote on it during a lame-duck session of Congress after the Nov. 4 election.

The package reportedly could cost as much as $300 billion and include a second round of tax rebate checks.

The first stimulus bill included rebate checks of up to $600 for individuals and cost $150 billion.

Rep. Lincoln Davis, D-Tenn., said he is studying the Democratic proposal and would favor a bill that includes highway construction projects that could add thousands of jobs.

“I’m always cautious of and thoroughly analyze any proposal when there is talk about spending taxpayer dollars,” he said. “One thing I know for certain is our country is suffering from what I call an infrastructure deficit, especially in my rural district, and I believe this problem needs to be addressed on some level.”

House Republicans have countered with their own stimulus proposal that includes expediting offshore oil and gas exploration, suspending the capital gains tax on equities, lowering some business taxes and suspending the requirement that owners of Individual Retirement Accounts begin withdrawing money from them once they reach 70.

Rep. Nathan Deal, R-Ga., has not yet seen the Democratic proposal, a spokesman said.

“He would be more inclined to support such a proposal should the proposal include the extension of the 2001 and 2003 tax cuts,” said Chris Riley, his chief of staff.

Rep. Wamp said he would like to see the stimulus include a $2,000 tax rebate that owners of older cars that get less than 20 miles per gallon can use to purchase newer, more fuel-efficient cars.

“I would go further to incentivize energy efficiency,” he said. “That huge SUV you bought eight years ago, let’s incentivize through the tax code and give people a $2,000 rebate to trade in that gas guzzler for an energy-efficient car.”