Despite near unanimous Republican opposition, Democrats on Friday pushed through both houses of Congress a $787 billion stimulus bill aimed at helping the country escape from the worst recession in decades, and perhaps avoid another Great Depression.
The vote in the House was 246 to 183. 7 Democrats joined all 176 Republicans in opposition.
In the Senate, the vote was 60 to 38. Three centrist Republicans (Sens. Olympia Snowe and Susan Collins of Maine and Arlen Specter of Pennsylvania) joined 55 Democrats and two independents in voting for the bill.
President Barack Obama is expected to sign the bill in a public ceremony on Monday.
At a news conference, House Speaker Nancy Pelosi said:
“The president requested swift bold action. The American people are feeling a great deal of pain. They have uncertainty about their jobs, about health care, about the ability to pay for the education of their children, and sad to say in our great country, even to put food on the table. And today we have passed legislation that does take that swift, bold action on their behalf.”
Still, there was no bipartisanship in this bill, a worrisome fact. Despite the call from the GOP and conservatives for tax cuts ONLY, an excellent treatise at Newsweek shows, given common sense, why such a bill would not work:
What happens if you cut this worker's payroll taxes (assuming she's on somebody's payroll and isn't a contractor or self-employed)? Well, she might spend the increased cash flow. But given everything that's going on, a fearful but still rational person might not rush out to spend or invest the money. She might be far more likely—and well-advised—to save it, to build up a cash hoard that would allow her to remain solvent should she lose her job, or to prepare for the eventuality that she might have to buy her own health insurance. Or she might start shoveling that extra $100 per week into her 401(k) to make up for some of the huge losses she's suffered.
Psychology plays a big role in all sorts of economic decisions. And at times like these, when people are gripped with fear, it plays an even larger role. In such a climate, cutting taxes can't hurt. But should we expect it to have the same effect it would have in a period when people are generally confident and secure?
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