AUGUSTA, Maine — Among the receptions and celebrating, Gov. John Baldacci says there will be a lot of intense politicking over the planned stimulus package that will go on throughout the inauguration of Barack Obama as president.
“There will be a lot of politics and I think there will be a lot of man-made wind energy heating that area,” Baldacci joked on Friday. “There are a lot of exciting things that they are looking at doing, frankly, in my first read of this.”
House Democrats released their $825 billion stimulus plan last week that was developed in consultation with staff of the president-elect. It contains $550 billion in spending and $275 billion in tax cuts.
“There are a lot of good things in that proposal,” Baldacci said. “I hope Congress can move quickly and pass a plan.”
He said that with most of the nation’s governors, Congress and members of the incoming administration mingling at social events, he is sure a lot lobbying on the measure will be done as they munch on hors d’oeuvres at the scores of receptions and formal dinners.
“It’s the talk of the town now, and it will be for a while,” 2nd District Rep. Mike Michaud, D-Maine, said Friday. “This package is the first step but we have to make sure that what is in it is going to stimulate the economy and is not just somebody’s pet project.”
He said the package has some good provisions, but he is concerned about its increasing cost. He said all of the stimulus spending is financed through borrowing, and that means it must be paid for eventually.
Most of the items Baldacci outlined in a letter to the president-elect are included in the House plan. It includes $87 billion to help pay for expanded Medicaid aid for the states and more than $100 billion for infrastructure spending. It also includes $79 billion for higher education aid for students and $41 billion aimed at helping local school districts. It also would spend $30 billion for road and bridge repairs and construction.
Of particular importance to states are the $43 billion for increased unemployment benefits, $20 billion to increase the food stamp benefit and $30 billion for highway construction. There also is $19 billion for clean water infrastructure, flood control and environmental cleanup programs, plus $4 billion for state and local anti-crime programs which Maine Public Safety Commissioner Anne Jordan hopes will ease budget cuts at her agency.
“I still don’t have all the details on that proposal, but transportation construction jobs are a good way to stimulate the economy,” Michaud said. He serves on the House Transportation Committee.
First District Rep. Chellie Pingree, D-Maine, said she wants the package to include items that economists have stated will provide a quick and direct boost to the economy. She said that includes increased food stamp benefits and an extension of federally paid unemployment benefits.
“We know that works and that should be part of any stimulus package,” she said.
Both of Maine’s U.S. senators went on record last month with detailed proposals for both short-term stimulus and to help with a long-term recovery. Sens. Olympia Snowe and Susan Collins want an extension of unemployment benefits, a significant transportation infrastructure investment, and some level of help to the states through temporary Medicaid match-rate increases.
Snowe, a member of the Senate Finance Committee, will play a direct role in fashioning the package the Senate considers. She believes the package should include a broad mix of spending and tax cut provisions.
“We have to not only provide for an immediate stimulus,” she said, “we need to make the investments to grow our economy and create the jobs President-elect Obama has pledged to do.”
Collins said the final package adopted by Congress needs to go beyond the immediate need to stimulate the economy. She agreed that growing jobs and retaining existing jobs are important.
“We must build upon what has given America its competitive edge, innovation,” she wrote Obama last month. “It is only by doing this that we can raise our productivity rate, and ultimately, continue to create the high-paying jobs that Americans need and deserve.”
Both Snowe and Michaud expressed concern about the cost of any stimulus package and suggested there are “offsets” that could be used to pay for at least part of the package, including windfall profits taxes on oil companies.
“We can’t just go on borrowing,” Michaud said. “That is how all of this is being financed, by borrowing.”
Congress passed a $168 billion stimulus package last February, backed by President Bush, which sent out rebate checks of up to $600 to individuals and $1,200 to couples. Most economists do not believe it worked as the recession deepened and many saved the tax rebate instead of spending it as hoped by lawmakers.
The House passed a second $61 billion economic aid plan in September, but it failed in the Senate after Republican senators opposed it and Bush threatened to veto it.
Democratic leaders have announced they want to pass a new stimulus package by mid-February.