Omnibus Approval Seen, But Little Interest In New Stimulus

Key senators predicted Sunday that Congress will approve the $410 billion FY09 omnibus appropriations bill this week, but were divided about whether billions of dollars more should be spent to bail out U.S. financial institutions and automakers.

Speaking on the Sunday morning television talk shows, Senate Banking ranking member Richard Shelby and Sen. Evan Bayh, D-Ind., said the Senate should be able to break a logjam this week and pass the omnibus, which contains the nine unfinished appropriations bills needed to fund the federal government for the remainder of the fiscal year.

"I think ultimately they'll get the votes to pass the bill, but I think there are substantive and procedural problems with this bill" Bayh said on ABC's "This Week," who opposes it. "I think this is a time to show that we can economize, do better than across-the-board increases that are many times the rate of inflation."

"I think we ought to fund the government and move on," said Shelby, an Appropriations Committee member who has publicly defended the earmarks he has in the bill.

But some Senate and House Republicans continue to hammer the Obama administration over the bill because it includes more than $8 billion in earmarks, contrasting that with Obama's pledge to restrict such directed spending.

OMB Director Peter Orszag said in two separate appearances on CNN's "State of the Union" and CBS' "Face the Nation" that the bill would be different had the administration written it.

"Next month we're going to start the process on the fiscal year 2010 budget that'll be under our watch and the game's going to be a lot different," Orszag said on "Face the Nation."

But House Minority Whip Cantor fired back later on "State of the Union," charging that what Orszag said does not have any credibility.

"If you make a promise, people expect that you live up to it. And that's why this administration's refusal to go in and change this bill, I think, is a false position. There is no way anyone could take what Mr. Orszag has said with any credibility," he said.

Lawmakers were also divided over whether banks and the big automakers should be allowed to fail.

Sen. Lindsey Graham, R-S.C., said on NBC's "Meet the Press" he does not believe Congress has the political will to approve another multi-billion dollar round of spending for the Troubled Assets Relief Program.

"There's just not the political will unless something new happens," he said. "I think there's growing political will that we're not going to continue throwing good money after bad."

Shelby and Sen. John McCain, R-Ariz., both said on separate programs that some big banks should fail and troubled automakers should consider bankruptcy.

"We buried the small banks, we ought to bury some big ones," Shelby said on ABC's "This Week."

"Some of these banks have to fail," McCain said during a "Fox News Sunday" appearance. "You can't have zombie banks like the Japanese had and unfortunately that seems to be the path."

McCain added that "the best thing that could probably happen" for General Motors is to file for Chapter 11 bankruptcy.

But Sen. Charles Schumer, D-N.Y., did not rule out the possibility of nationalizing banks. "There's what I call good nationalization and bad nationalization," he said on "Meet the Press."

Under "good" nationalization, he said, the government would remove the current management of a bank and take over its bad assets, then provide it an injection of funding and see to it that the institution is taken over by a new, private-sector management team.

Schumer added that any new TARP funding should come with strings, such as strict federal oversight, limits on compensation for executives and guarantees that the financial institution will lend money.

Bayh also said that some banks and auto companies are too big to fail.

But lawmakers were in general agreement that it is too early to call for another economic stimulus package. They said the stimulus bill recently approved by Congress is only just beginning to affect the economy.

"There is a lag between when you put policy into effect and when it starts to have an effect in the real world," Bayh said.

"We should give it some time to work," Orszag said on his "Face the Nation" appearance. "The money just started to flow, so it will take weeks and months for it to start to have an impact."

If another stimulus bill is taken up, however, it should focus on tax cuts and incentives for small business, McCain said.

On another front, Graham also took aim at spending in Obama's FY10 budget. "The budget is a radical, reckless exercise that is scaring the hell out of everybody who is watching this country's financial situation," he said.

Orszag defended Obama's proposed deduction to reduce the amount that upper-income Americans can deduct for charitable contributions to fund the administration's healthcare agenda despite growing grumbling in both parties.

"I think as people start to look at that proposal in more detail and compare it to alternatives, they're going to come around to our proposal," he said.

But U.S. Chamber of Commerce President Tom Donohue predicted that that part of Obama's plan "is not going to fly. It's dead on arrival."

The plight of General Motors and Chrysler also got some attention, with House Minority Leader Boehner saying on CBS' "Face the Nation" that while General Motors could survive bankruptcy, "hopefully they can come to an agreement ... before they get to that point."

"I don't think the government should put any more money there until General Motors shows
that they can be a viable company for the long term and that there is a reasonable chance that any loans that the government would make would be paid back to the taxpayers," Boehner said. "Anything short of that is just throwing good money after bad."

Donohue said during his appearance on ABC's "This Week" that "I'd like to see the Big Three end up being two," and Shelby reiterated his position that GM should go through bankruptcy to restructure.

On "This Week," Sen. Claire McCaskill, D-Mo., also cast doubt on whether there are 60 votes in the Senate to break a Republican filibuster against card-check legislation. "I'm not sure that we have the votes," McCaskill said.