WASHINGTON — Congress laid the foundation for President-elect Barack Obama’s economic recovery plan Thursday with remarkable speed, clearing the way for a new infusion of bailout cash for the financial industry while majority Democrats proposed spending increases and tax cuts totaling a whopping $825 billion.
Two days after Obama personally lobbied for release of $350 billion in bailout funds, the Senate narrowly turned aside a bid to block the money.
Across the Capitol, House Speaker Nancy Pelosi, D-Calif. said “immediate job creation and then continuing job creation” were the twin goals of the separate $825 billion stimulus legislation.
It recommends tax cuts for businesses and individuals while pouring billions into areas such as health care, education, energy and highway construction.
She and Senate Majority Leader Harry Reid, D-Nev., have pledged to have the economic stimulus bill ready for Obama’s signature by mid-February.
Both houses debated Obama’s call to release another $350 billion from the bailout package, but the Senate vote was the triumph he had sought.
Despite bipartisan anger over the Bush administration’s handling of the program to date, Democratic allies of the president-elect prevailed on a 52-42 roll call.
The vote followed a commitment by Obama to use as much as $100 billion of the funds to help homeowners facing foreclosure proceedings. The money will be available in less than two weeks.
The president-elect, who travels to hard-hit Ohio today to promote his economic program, announced he would convene a “fiscal responsibility summit” in February to focus on long-term problems with the economy and the skyrocketing costs of benefit programs such as Social Security and Medicare.
“We’ve kicked this can down the road and now we are at the end of the road,” he said in a Washington Post interview posted on its website.
Earlier, he hailed the stimulus blueprint as “a significant down payment on our most urgent challenges.”
The outlines of the economic stimulus measure reflected a change in political priorities, with an emphasis on spending and tax breaks designed to encourage production of alternative energy sources, make federal buildings more energy-efficient and weatherize homes.
In all, the outline called for $550 billion in new spending and $275 billion in tax cuts. The $825 billion total is virtually certain to grow as the legislation advances through Congress.
Initial Republican reaction was negative.
“At first glance, it appears that my Democratic colleagues think they can borrow and spend their way back to prosperity with a half-trillion dollars of new spending and less tax relief than President-elect Obama has been talking about,” said Republican Rep. John Boehner of Ohio, the party’s leader in the House.
Democrats hold expanded majorities in both houses as the result of last fall’s elections, and enactment of the stimulus measure is scarcely in doubt.
Recovery plans
Highlights of the $825 billion economic recovery plan. Most provisions are temporary.
Energy: $32 billion to fund a so-called “smart electricity grid” to reduce waste; $20 billion-plus in renewable energy tax cuts and a tax credit for research and development on energy conservation, energy efficiency and renewable energy.
Infrastructure: $32 billion for transportation projects; $31 billion to build and repair federal buildings and other public infrastructure; $19 billion in water projects; $10 billion in rail and mass transit projects.
Aid to the poor and unemployed: $43 billion to provide extended unemployment benefits through Dec. 31, increase them by $25 a week and provide job training; $20 billion to increase food stamp benefits by 13 percent.
Education: $41 billion in grants to local school districts; $79 billion in state fiscal relief to prevent cuts in state aid.
Health care: $39 billion to subsidize health care insurance for the unemployed and provide coverage through Medicaid; $90 billion to help states with Medicaid.
