Appropriations chief says prudence dictates looking into second stimulus

Just more than three weeks after a $787 billion economic stimulus package became law, the House Appropriations Committee is looking into drafting a second stimulus, just in case more action is needed to help turn the economy, Appropriations Committee Chairman David Obey, D-Wis., said Wednesday.

"Prudence would dictate that you would anticipate that you might need other things," Obey said. "It's a simple routine to prepare possible options if you have a next requirement."

His comments came one day after House Speaker Nancy Pelosi, D-Calif. -- following a meeting with economists -- said that she is open to the possibility if needed.

Obey threw some blame at the Senate for the situation, noting that the stimulus initially approved by the House -- an $819 billion bill -- had to be cut to $787 billion to win three Republican votes.

"I said from the beginning that we would probably undershoot," Obey said. "The Senate squeezed it by a couple of hundred billion dollars. I regret that, but that's democracy."

He also said Democratic leaders would wait to see what effect the first stimulus will have.

"It is spectacularly unreasonable to expect to see this stimulus package to produce any action any time soon," Obey said. "It takes a number of months to get out in the field and get moving ... [But] that doesn't mean that we shouldn't be thinking and preparing options for the time when it may become necessary."

Talk of a second stimulus left Republicans cold. Senate Minority Leader Mitch McConnell, R-Ky., compared it to Japan's Lost Decade, when in the early 1990s after a crash in real estate and stock prices, Japan enacted a series of stimulus packages, which did not pull the economy out of a deep recession.

"As we all know, they passed numerous fiscal stimulus bills throughout the decade of the 1990s," McConnell said. "And at the end of the decade ... the Japanese economy looked very much like it did at the beginning of the decade. So my members are highly skeptical that we can spend our way out if this particular problem."

Obey's comments also came after House Democratic leaders Wednesday issued two new initiatives to improve the earmark process, and after President Obama called for overhaul of the earmark process as he prepared to sign the $410 billion fiscal 2009 omnibus spending bill packed with thousands of earmarks the White House did not want.

One initiative would give the appropriate executive-branch agency 20 days to review a member-requested project to make sure the earmark is eligible to receive funds and meets the goals established in law. The second would require the executive branch to ensure that any earmark for a for-profit entity be awarded through competitive bidding.

As Congress considered the omnibus over the last few weeks, Republicans have hammered Democrats and Obama for the nearly 9,000 earmarks in the bill worth about $7.7 billion, although Republican members sponsored a large number of them. Republicans were pessimistic the Democratic earmark proposals would improve the process.

"I think the president missed a golden opportunity today to fulfill his campaign commitment to not sign bills that have a lot of wasteful spending and are overburdened with earmarks," said House Minority Leader John Boehner, R-Ohio. "When you look at the earmark reforms ... proposed today, the question I asked is, 'where is the beef, where is the reform.' I just don't see it."

Obey became irate when asked about Republican criticism of the proposals and pointed to the fact that the earmarks in the bill only comprised 1 percent of the total omnibus spending.

"I am tired of talking about doughnut holes," said Obey.

Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, in a statement, said that Democrats have brought down the level of earmarks since they won the majority in Congress in 2006.

"I very much appreciate President Obama's announcement today in support of reforming the practice of congressional earmarking," Inouye said. "The reforms we have already implemented ensure that the earmarking process now has an unprecedented level of transparency, accountability and openness."

Inouye, along with Senate Appropriations ranking member Thad Cochran, R-Miss., also sent letters to senators Wednesday reminding them that fiscal 2010 earmarks must be posted on their Web sites, the request must be made 30 days before any markup, and that earmarks to private companies are subject to competitive bid requirements.

"I will work with the White House and Senate leadership to identify and put in place any additional changes which may be required to ensure complete accountability," Inouye said.