Updated February 08, 2009
President's Economic Adviser Pushes for Speed, Social Spending in Recovery Bills
FOXNews.com
Larry Summers tells "FOX News Sunday" that Congress must move quickly on a spending and tax cut compromise that combines the best of House and Senate packages.
President Obama's top economic adviser on Sunday urged Congress to move quickly on a massive spending and tax cut plan that he says can combine the best of separate House and Senate packages yet to be finalized for a presidential signature.
National Economic Council Chairman Larry Summers said the two bills -- a House version unanimously opposed by Republicans and a Senate compromise still in the works -- are 90 percent alike. Differences, therefore, must be dealt with in an urgent manner so government can start rolling out cash for infrastructure, health care, education and tax cuts aimed at helping the economy recovery from a prolonged and far-reaching slump.
"We've got to work through the differences, find the best bill we possibly can, and get it in place as quickly as possible to contain what is a very damaging and potentially deflationary spiral," Summers told "FOX News Sunday."
"That's got to be the priority now. So yes, let's argue vigorously. Let's work through the differences. Let's make sure we scrub out any wasteful programs. Let's make sure we preserve key investments. Let's make sure we give incentives where those incentives can make a big difference. But you know, what's agreed between the House and Senate is, at the end of the day, much more important for preserving this economy than what's disagreed," he said.
The Senate is currently working on its 778-page, $827 billion package, which right now is scheduled for a test vote on Monday. Lawmakers hashed out a "compromise" on Saturday that cuts some of the spending and taxes that made it into the original version.
Two Republicans have said they would sign onto the compromise bill, which still has vigorous opposition from the GOP. That's enough to get it passed if all 58 Democrats in the chamber stick together to vote for the package.
Obama has urged bipartisanship in crafting the bill, but has slowly given up the notion that many Republicans will get on board on the package.
Arizona Sen. John McCain, Obama's opponent in the 2008 presidential election and a critic of the current legislation, said the ability to pick off a couple senators is not bipartisanship.
"In full disclosure, that's the way the Bush administration operated ... This is a setback in my view for all Americans because he promised bipartisanship," McCain told CBS' "Face the Nation."
"Well, the president has done a good job reaching out to Republicans, and he has said he wants to approach this crisis, like other problems the country has, on a bipartisan basis. That's good, and we're willing to work with him on that. But this bill is not the president's bipartisan plan," Sen. John Cornyn, R-Texas, said on "FOX News Sunday."
But Sen. Claire McCaskill, D-Mo., one of the president's top supporters in the Senate as well as a key negotiator on the bill, said the compromise was produced through bipartisanship.
"We did compromise ... we worked hour after hour and that door was open to every Republican
in the Senate," she said on NBC'S "Meet the Press." McCaskill noted that the tendency in Washington is to argue about the color of the fire truck when the building is on fire.
The agreement stripped $108 billion in spending from Obama's plan. The Senate kept $11 billion for a tax break on cars, $18.5 billion in a homebuyer tax credit and $70 billion for a fix to the Alternative Minimum Tax that annually snares middle class earners in an exception to the tax code aimed to make sure the wealthy don't skip out on their share. Overall, however, tax cuts were reduced in the compromise.
As for spending, $40 billion in aid to states was dropped, including $20 billion for school construction and $1 billion in addition funds for for Head Start early education.
The bill retained items that also probably won't do much for the economy, such as spending $1 billion to fix problems with the 2010 Census.
Summers said education is one of Obama's most important priorities and a good investment "in the competitiveness and the future of our country." He described aid to low- and middle-income families sending their kids to college as a worthy form of "social spending."
"If you prevent a family from selling its house to send their kid to college and keep that house off the market and from depressing the community, I think that's economic stimulus. If you enable that family to avoid cutting back on expenditures, that's economic stimulus," he said.
"I have kids myself in college, and I can tell you that if you put money in their pockets, it's very unlikely to be saved and it's very likely to be spent. And that's stimulus as well," Summers continued.
But the president's economic adviser would not say whether the administration would push to have school construction restored before the Senate vote or when the House and Senate meet to reconcile changes.
"It's an investment that can take place quickly. It's an investment that's labor-intensive in restoring schools and installing laboratory space that our kids need to compete. That's a place where we think there's very important investment to be made," he said.
For all the talk of cuts, the bill retains the core of Obama's plan, designed to ease the worst economic recession in generations by combining hundreds of billions of dollars in spending to boost consumption by the public sector with tax cuts designed to increase consumer spending.
Much of the new spending would be for victims of the recession, in the form of extending unemployment insurance through the end of the year and increasing benefits by $25 a week, free or subsidized health care and increased food stamp payments.
The cost of the House version of the bill is $820 billion and is weighted more toward sending money to states and local governments.
Obama will take his case to the American people Monday with his first prime-time news conference.
Summers said the president believes the legislation must be moved out as rapidly as possible, and the administration is urging Congress to stay in town to get it done even if it means giving up their annual President's Day recess, which is scheduled to begin in less than a week.
The Associated Press contributed to this report.
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