AUGUSTA, Maine — A stimulus package that could grow to $1 trillion by the time it becomes law will be fashioned with the help of Maine’s two U.S. senators, who are sitting on the two key Senate committees that will draft the measure.
“It means we can represent the interests of this state that really represents the country’s needs in so many ways,” Sen. Olympia Snowe said Saturday. “I have had several discussions this week with Vice President Biden and Larry Summers on what should be in this package.”
Summers is President Obama’s chief economic adviser. Snowe serves on the Senate Finance Committee, which will deal with the tax and Medicaid provisions of the plan. The other spending provisions will be considered by the Senate Appropriations Committee, to which Sen. Susan Collins was named last week.
“We are fortunate that Maine will be well represented when the package is marked up,” Collins said Friday. “It is important that we produce the legislation as quickly as possible. Every day that we delay is a day that we delay the shock to the economy that is needed to produce jobs.”
Collins said she also has been called by Biden and is impressed by the efforts of the Obama administration to talk with the GOP lawmakers who are working on crafting the stimulus package.
“While the Democrats are the majority, they will need Republicans, particularly in the Senate, to pass this stimulus package,” Collins said.
Collins and Snowe are Republicans.
Both senators sent lengthy letters to Obama before he took office outlining what they want in the stimulus package, and the details released Saturday by the White House press office indicate a lot of what they requested is in the draft being pushed by the president.
For example, both senators had urged that unemployment benefits be extended, that food stamp funding be increased, and that Medicaid be expanded to help the states cope with the recession and to help those who have lost their jobs have health care coverage. Both also have urged a major investment in infrastructure projects.
“I have pushed hard that we include a provision that will exempt unemployment payments from income taxes,” Snowe said. “I think that will be included.”
She also is pushing for more tax cut provisions than are outlined by either the House Democratic plan or are in the details released by the White House.
“We need to do more to put cash in the hands of families and businesses,” she said, “and we need to encourage businesses to invest to create jobs.”
Snowe said many companies are not investing in equipment and there need to be tax policies that encourage investment. She suggested allowing up to $250,000 in equipment to be written off in a single tax year, called “expensing,” and she wants accelerated depreciation for assets above that amount.
“We need to create jobs and get the economy moving again,” she said.
Collins said the $30 billion in infrastructure investments in the House Democratic plan is not enough. She has proposed a $50 billion package that will funnel money to the states for roads and bridges as well as power transmission and broadband expansion.
“These are good jobs that will build projects we need that will have a lasting impact on our economy,” she said.
Collins also will oppose spending that is not going to stimulate the economy. She said some of the spending items in the House Democratic plan resemble a “Christmas tree” of items wanted by some lawmakers, but will not stimulate economic growth.
“The temptation is going to be for everyone to add their favorite program to the stimulus,” she said. “We have to resist that.”
Collins said some of the proposals put forth by House Democrats have merit, but not as part of the stimulus package and should not be included in the package.
Maine Gov. John Baldacci had urged that the package include funding to reduce the nation’s reliance on foreign energy sources, and the plan released Saturday indicates it would double the generating capacity of renewable energy projects over three years, enough to power 6 million American homes.
The plan also envisions using loan guarantees and grants to leverage $100 billion in private-sector investment in what it described as “clean energy” projects over three years. And it would fund 3,000 miles of new or upgraded transmission lines for an expanded national electric grid.
Snowe said that while the numbers are fluid and depend on what is finally hammered out, she expects Maine will get “a very significant amount of money” to help the state weather the recession. For example, she said, the Senate Finance Committee plan is expected to include $87 billion for the one-time Medicaid matching rate increase to help the states over two years.
“Depending on what the final formula is, Maine could get $400 [million] to $500 million,” Snowe said.
In his first weekly address, President Obama acknowledged the concerns over the size of the plan and some of its elements. But he argued the recession calls for unprecedented measures and promised the money will be spent wisely.
“We won’t just throw money at our problems; we’ll invest in what works,” he said.
Both Maine senators say they will hold him to that promise.