Image: Rep. Charles Rangel
Larry Downing  /  Reuters
House Ways and Means chairman Rep. Charles Rangel, D-N.Y., right, stressed Wednesday that many of the details of the stimulus bill have yet to be decided.
By Tom Curry National affairs writer
updated 1/7/2009 6:45:48 PM ET 2009-01-07T23:45:48

In spite of the Nov. 4 presidential election, Congress is still Congress.

The committee chairmen who write and shepherd tax legislation are still chairmen. They aren’t about to surrender their prerogatives to President-elect Barack Obama.

Since a large portion of Obama’s stimulus proposal will come in the form of tax cuts, the chairmen — Senate Finance Committee chairman Max Baucus, D-Montana, and House Ways and Means chairman Charles Rangel, D-N.Y. — will ultimately determine what form the bill takes.

The total cost of the bill is expected to be in excess of $700 billion.

Obama is seeking a tax cut for workers as an integral part of the stimulus. But Rangel emphasized in his briefing for reporters Wednesday how much is still unknown about the Obama proposal.

“The members don’t really know any more about the package except what we read” in news reports, Rangel said. He added, “The only thing I know is what I read in the papers. I hope that next week I won’t be talking this way …. We only know what (Obama’s) staff has told our staff.”

Rangel said, “All we have is the broad concepts, and we have the responsibility of putting that into legislative form.”

“We haven’t got any written plan (from Obama’s aides).” He mused that “maybe it’s better if they help us to write it and maybe we write it and give it to them and see whether they approve of it.”

'We're drafters'
So, a reporter asked Rangel, why not just call the Obama staff and ask them to e-mail him the draft of a bill? “I don’t think it’s necessary,” Rangel replied. “Hey, we’re drafters, what the hell?”

Obama might supply more details on his proposal when he gives a speech on the economy Thursday.

Baucus told reporters Wednesday that while Democrats, on the Obama team and in Congress, generally agree on tax cuts to spur economic growth, the specific provisions are far from certain at this stage.

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He added, “We just got back (from Christmas and New Year’s recess) — a lot of members are starting for the first time to think about all this. Senators are senators. They’ve got ideas too.” He quickly added, “Democrats are also part of the team, the Obama team.”

Baucus said his committee will have a markup — a formal public drafting session — in the next few weeks.

“There’s general agreement on what should be in (the stimulus proposal). We’re now at the stage of talking to Republicans,” Baucus told reporters, saying that he will confer with GOP senators on the Finance Committee at a meeting Thursday.

“The basic question is the degree to which we want to change the (Obama) proposal, as it seems to be emerging, and the degree to which we do not," Baucus said. "I think there will be general agreement. There may be a few little tweaks here and there.”

Adding energy production tax breaks
One specific add-on Senate Democrats want: energy tax breaks. “There’s a strong interest among Democrats on the committee for more energy production incentives than we’ve seen thus far,” Baucus added.

“Clearly we (senators) want leave our imprint too — although we’re part of the team. We’ll need a markup because there are going to be some modifications, but the basic thrust of the final result is going to be what you’ve been reading about in the newspapers.”

As of mid-week, it seems certain Congress will pass a very large bill to try to stimulate economic growth.

But there's much that congressional observers still don't know: exactly how big the bill will be, when it will pass, what specific tax provisions will be in it beyond those sketched by Obama, and how significantly the major players in Congress will change Obama's blueprint.

The congressional speculation about the stimulus came on a day that began with the Congressional Budget Office forecasting that the deficit for fiscal year 2009 will amount to 8.3 percent of gross domestic product, the largest deficit since World War II.

And the CBO forecast does not include effects of any stimulus legislation, which are bound to make the deficit even bigger.

On a positive note, Rangel said he had not heard any hint of unwillingness by Obama to negotiate on the stimulus.

“Our staffs have been working closely with the Obama people.” He said, “The staff has told us possible areas where they don’t yet have the answers. But I have yet to hear (from Obama) ‘It’s my way or the highway’ on anything.”

Meanwhile, in an indication of the uncertainty over the stimulus, there was some conflict between Rangel and Baucus about whether a tax cut for workers would or wouldn’t reduce revenue to the funds that pay Medicare and Social Security benefits.

“If what we’re talking about is getting disposable income in the hands of working people … we’ll have to deal with it where we see some problems in not getting the funds in the Social Security trust fund,” Rangel told reporters.

“You sure don’t want to take money out of Medicare or Social Security trust funds. You can’t do that,” he said.

'The trust fund is not affected'
But Baucus said a cut in taxes is “not a trust fund issue; that’s straight income tax. It’s not trust fund revenues, it's general revenues. It sounds like a payroll tax, but it is an income tax provision. Your withholding (of taxes in workers' paychecks) is reduced, but the trust fund is not affected.”

Asked when he would actually receive a specific draft proposal from the Obama staff, Baucus answered, “We’re working with them all the time. They basically want us to proceed while they talk to us about principles and concepts. They’re not giving us specific legislation.”

Wouldn’t it help if the Obama team sent over a draft? “No, it would not help,” he said. “The process we’re going through is working pretty well.”

Meanwhile, the Republicans face a strategic choice. In theory, they have enough votes in the Senate to stop the legislation. But do they want to be blamed by the news media, the public, and the Democrats for delaying a package that seems to offer hope of sparking growth in the economy?

A key Republican senator who is up for re-election in 2010, Sen. Judd Gregg of New Hampshire, indicated Thursday that he’d likely vote for a huge stimulus bill, despite his concern about long-term deficits.

“I’d support a stimulus package that is within the parameters of what I think is appropriate and it could be a pretty big number if the policy’s right.”

A vote for a stimulus bill would fiscally responsible, Gregg said, “because it will generate economic activity and temper this extraordinarily serious downturn ... and will give people the opportunity to have jobs.”

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