Stimulus Conference Deal: Winners and Losers

A House-Senate conference committee has come up with what will probably be the final version of the economic stimulus package.

From scattered media reports, it looks like the "losers" in the negotiations will be first-time homebuyers and house-flippers who won't get much of the Senate-passed tax credit for home purchases; and state governments, who will lose most if not all of the flexible federal assistance supplied in the House bill. The AMT "patch" in the Senate bill, that temporarily protects upper-middle-class taxpayers from a big hit on Tax Day, stayed in at a price of $70 billion.

There are garbled reports as to whether conferees did or did not scale back the Obama "Make Work Pay" tax credit, the centerpiece of his campaign's tax plan.

The one thing that is reasonably clear is that the package will be enacted. The only Republican senator even threatening to leave the reservation after the Senate passed its bill, Arlen Specter, will have a hard time rejecting the conference report unless he's willing to get deep in the weeds of the differences from the Senate bill. And we will soon see the Obama administration and congressional Democrats thumping the tubs for quick passage of the final bill.

THURSDAY MORNING UPDATE: There's still no text available of the conference agreement, but a summary from Speaker Pelosi's office can be found on the NCSL site. The main clarification of the above description is on Obama's signature "Make Work Pay" tax credit, which has been scaled back from $500 per individual (and $1000 per couple) to $400 per individual (and $800 per couple), with a tighter means test than in the House bill. It appears that the big fight between House Democrats and Susan Collins on school construction funding was resolved by making this an eligible activity under the education portion of the State Fiscal Stabilization Fund. The "flexible state funding" portion of said fund, zeroed out in the final Senate bill, was restored to $8 billion (as opposed to $24 billion in the House bill), in part through a reduction in the "state incentives grant" program, aimed at boosting state education goals, to levels below either bill ($5 billion). The COBRA extension for people who have lost job-based health insurance survived, but for a shorter period and with lower subsidy levels.

Politically, there's a lot of grumbling from House Democrats--both progressives unhappy with Senate-passed cuts and Blue Dogs who don't like unfunded tax cuts--about the AMT "patch," which survived conference intact (see this Tom Edsall piece for an assessment of the politics of this provision). But it's unlikely to develop into a revolt on the conference bill itself.

A House-Senate conference committee has come up with what will probably be the final version of the economic stimulus package. From scattered media reports, it looks like the "losers" in the negotiations will be first-time homebuyers and house-flippers who won't get much of the Senate-passed tax credit for home purchases; and state governments, who will lose most if not all of the flexible federal assistance supplied in the House bill. The AMT "patch" in the Senate bill, that temporarily protects upper-middle-class taxpayers from a big hit on Tax Day, stayed in at a price of $70 billion. There are garbled reports as to whether conferees did or did not scale back the Obama "Make Work Pay" tax credit, the centerpiece of his campaign's tax plan. The one thing that is reasonably clear is that the package will be enacted. The only Republican senator even threatening to leave the reservation after the Senate passed its bill, Arlen Specter, will have a hard time rejecting the conference report unless he's willing to get deep in the weeds of the differences from the Senate bill. And we will soon see the Obama administration and congressional Democrats thumping the tubs for quick passage of the final bill. THURSDAY MORNING UPDATE: There's still no text available of the conference agreement, but a summary from Speaker Pelosi's office can be found on the NCSL site. The main clarification of the above description is on Obama's signature "Make Work Pay" tax credit, which has been scaled back from $500 per individual (and $1000 per couple) to $400 per individual (and $800 per couple), with a tighter means test than in the House bill. It appears that the big fight between House Democrats and Susan Collins on school construction funding was resolved by making this an eligible activity under the education portion of the State Fiscal Stabilization Fund. The "flexible state funding" portion of said fund, zeroed out in the final Senate bill, was restored to $8 billion (as opposed to $24 billion in the House bill), in part through a reduction in the "state incentives grant" program, aimed at boosting state education goals, to levels below either bill ($5 billion). The COBRA extension for people who have lost job-based health insurance survived, but for a shorter period and with lower subsidy levels. Politically, there's a lot of grumbling from House Democrats--both progressives unhappy with Senate-passed cuts and Blue Dogs who don't like unfunded tax cuts--about the AMT "patch," which survived conference intact (see this Tom Edsall piece for an assessment of the politics of this provision). But it's unlikely to develop into a revolt on the conference bill itself.