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Pelosi, Boehner, Paulson on economic stage

The key players on Capitol Hill and in the Bush administration hashing out an economic stimulus package bring differing challenges and agendas to the table as they address an issue that's become the public's top concern.
Bush Economy Stimulus
House Speaker Nancy Pelosi, D-Calif., right, speaks to reporters at the White House, Tuesday, Jan. 22, 2008, in Washington, after meeting with President Bush about the global market turmoil. Ron Edmonds / AP
/ Source: The Associated Press

The key players on Capitol Hill and in the Bush administration hashing out an economic stimulus package bring differing challenges and agendas to the table as they address an issue that's become the public's top concern.

A Democratic House speaker out to prove she can govern is collaborating with a Republican president's treasury secretary who has roots on Wall Street and respect from both parties. Helping them is the House's top Republican, eager for a quick deal his party can support.

For Speaker Nancy Pelosi, D-Calif., one goal is to show that a Democratic Congress can respond quickly and effectively to a high-profile problem. She spent a frustrating first year in power watching many of her party's initiatives - ending the war in Iraq top among them - mired in partisan bickering and stymied in the closely divided Senate. She is determined not to let the same thing happen with the economic package, which is fast becoming a test of her leadership that voters will remember in November.

Rep. John A. Boehner of Ohio, the Republican leader - normally a vocal opponent of Democrats' ideas - is angling for a deal with Democrats that could also appeal to the majority of his party. Many GOP lawmakers worry over punishment at the polls if Congress fails to act.

"Both have an interest in the economy not collapsing on their watch," said Grover Norquist, a tax-cut advocate with ties to President Bush's White House. "Because neither team wants to be seen as saying, 'We're not doing something,' you'll get something that's 50-50."

Boehner has shown an unusual level of cooperation with Pelosi in putting together the package. He has posed for TV cameras sitting beside her, evoking a rare moment of chummy bipartisanship in a chamber where virtually every issue invites bitter squabbling.

Following a conference call last week between Bush and congressional leaders in both parties, it was Boehner who told Bush privately not to risk alienating Democrats by getting too specific too quickly with his economic proposals, according to a senior House leadership aide familiar with the conversation, speaking on condition of anonymity because the discussion was private.

"No one needs to needlessly push other people into corners that they can't get out of, or make this more difficult," Boehner later told reporters.

Treasury Secretary Henry Paulson is Bush's point man on the matter. A former CEO of Goldman Sachs, he is trusted by Wall Street and by members of both parties. Working the phones incessantly, Paulson has had dozens of private talks with leaders in both parties, keeping them apprised of Bush's thinking and trying to prevent partisan divisions from derailing an agreement.

"I have been very encouraged by the way both parties have come together, bipartisan support for moving quickly to do something that will make a difference this year in our economy," Paulson said Tuesday after meeting with congressional leaders in Pelosi's Capitol office.

Paulson came to the administration promising to take on the financial woes looming for Social Security and Medicare, but he has been unable to make a dent in either. With a bleak economic situation threatening to mark Bush's last year in office, Paulson has a chance to hand the president a recovery package that could help salvage his legacy.

Behind the scenes, Bush's top economic advisers, Edward Lazear and Keith Hennessey, are also involved in crafting the deal. Lazear, a labor economist, is helping to design an unemployment insurance component that could be part of the package. Hennessey, a former top Senate aide, chairs White House meetings on the measure and helps strategize about what can be achieved on Capitol Hill.

Bush and congressional leaders have agreed to move any agreement through the House first, with the more unruly Senate to follow. The thinking is that if the unlikely threesome of Pelosi, Boehner and Paulson can come to terms, their deal would come to the notoriously sluggish Senate with enough momentum to scale procedural hurdles and win quick passage.

Majority Leader Harry Reid, D-Nev., and Republican leader Mitch McConnell, R-Ky., will be in charge of putting together a bipartisan majority for whatever package emerges, stepping carefully through a minefield of presidential politics and competing proposals.

Reid acknowledged the challenge Tuesday when he said there are "too many cooks in the kitchen" to negotiate a stimulus package in the Senate.

Reid has chided the president for proposing a package of tax cuts and rebates before consulting with congressional leaders. Still, he praised Paulson's inclusive approach, calling the treasury chief's multiple telephone calls to Democratic leaders "a breath of fresh air."

Among Reid's toughest tasks will be keeping Sens. Hillary Rodham Clinton, D-N.Y., and Barack Obama, D-Ill. - who are on the campaign trail touting proposals laden with ideas Republicans detest - sidelined in the talks while Democrats seek broader agreement with the GOP.

McConnell also has a key role in quelling discontent among Republicans about the elements of the measure. For example, it won't include making Bush's tax cuts permanent - a top GOP goal - and is likely to feature some items most in the GOP oppose, such as raising or extending food stamp and unemployment benefits.

Sen. Judd Gregg, R-N.H., grumbled Tuesday about the emerging bipartisan agreement, calling it a product of politics rather than sound policy.

"We've got the leadership of both parties and the president chomping at the bit to make a political statement that they're more aggressively addressing this issue," Gregg said, questioning whether tax rebates and expanded unemployment payments would have any stimulative effect on the economy.

Influencing the process from outside is Federal Reserve Chairman Ben Bernanke, whose dire warnings about the economy's fundamentals and exhortations to quick action have put momentum behind the talks.