House Republicans left their meeting with President Obama today largely opposed to the stimulus bill that the House will vote upon tomorrow.
But some members of the GOP leadership expressed optimism that after the bill is changed in the Senate -- where the minority party, by design, has more influence -- they may be able to vote for it in its second incarnation.
The meeting went something like the following, according to multiple attendees:
After Rep. Sue Myrick, R-NC, delivered the opening prayer, President Obama talked about how bad the economy is and that it is deteriorating rapidly.
Mentioning how Caterpillar and Microsoft recently announced layoffs, the president said the stimulus is just one leg in a multi-legged stool to get economy going . Other legs include getting credit lines moving, cleaning out troubled assets, restoring confidence to lenders and dealing with the housing market more aggressively. The idea being that the stimulus bill is just the first step.
"I would love to not have to spend this money," the president said, underlining that he has no interest in increasing the size of government just to increase the size of government.
But, he said, he has talked to many economists who told him almost uniformly that they needed to get a stimulus bill up and running as soon as possible to avoid double-digit unemployment, thus they put together a package with both direct spending and tax cuts.
Mentioning conservative economist Martin Feldstein, the chief economic adviser to President Ronald Reagan, Obama said this spending will have a more simulative affect than will tax credits. For every dollar of spending, we get 1.5 dollars' worth of stimulus, he said. For every dollar of tax cuts, we get 75 cents' worth of stimulus.
The president noted that House Democrats had included some provisions they opposed that Republicans want, including small business provisions and the ability for businesses to transfer their losses from year to year.
Acknowledging that some of the spending cannot be done in two or three years, the president said that he will offer a budget that makes some very tough choices.
"Everyone will have to get a haircut," he said.
The president insisted he doesn’t want to create programs that will last forever. He reiterated that he had no pride of authorship -- that a good idea is a good idea.
The president said if there’s a better way to do tax cuts for a small business he’ll look at it. The spending is what it is, but it's important to not focus on one small part of the immense legislation because we should not be playing politics with the bill. There are parts of the bill he thinks could be improved, but that will have to happen after tomorrow.
Rep. Dave Camp, R-Mich., asked the first question, pushing for tax cuts that he said would move money into the economy more quickly.
The president said that if there are new ideas that he hasn't seen, he would like to talk about them. But on the issue of offering tax cuts to people who pay payroll and other taxes but who don't pay income taxes -- refundability -- Obama said there is simply a philosophical difference between Republicans and Democrats, and he would not compromise on that issue. Tax relief for some working families must come from payroll so even families who don’t pay income taxes get relief and they will spend it.
"Feel free to whack me over the head because I probably will not compromise on that part," the president said.
Obama said that there will be time to beat him up and a time for politics.
"I understand that and I will watch you on FOX News and feel bad about myself," he joked.
Rep. Pete Roskam, R-Ill., told the president that he won the presidency by rising above "Republicans" and Democrats" but that House Democrats are not living up to the Obama standard , he said. They have written a bill that spends more on re-sodding the National Mall than small business tax relief.
The president said if we can do more small business tax relief, we should do it, but I am just as concerned about the long term impact of tax cuts as I am about the long-term impact of spending.
"The National Mall is kind of important," the president said, somewhat jokingly, prompting laughs.
Rep. Cliff Stearns, R-Fla., asked the president to re-think his decision to delay the transition to digital TV.
I have no ideological problem with that, the president said, but I have been told that a lot of people's TVs will go dark. People like their televisions to work, and added that he wants the transition to work as fast as is possible.
Rep. Kevin Brady, R-Texas, received some applause after asking if the president could assure the room that this stimulus will not be an excuse to raise taxes and have wasteful spending.
Spending can sometimes be like closing the barn door after the horse has already left, President Obama said. This recession is different, he said. It's deeper and global. "Nobody is more worried about the deficit and the debt than me. I will be judged by the legacy I have left behind. I don’t want to leave our children with a legacy of debt. I am inheriting an annual yearly debt of over 1 trillion."
"At the pace we are going, we are doing irreparable damage to our economy," said the president. "We are going to have to make some very painful choices. We will present a budget with a realistic approach to eliminate debt, and bring down spending."
Brady's fellow Texas Republican Jeb Hensarling then made a passionate appeal for the president to focus on reducing the national debt.
President Obama agreed, but said these are extraordinary circumstances. "We have to pass this bill," he said.
Rep. Todd Akin, R-Mo., challenged some of the economists' underlying assumptions about the merits of government spending stimulus effect versus tax cuts. He proposed capital gains tax cuts and tax cuts on dividends to give the people who create jobs the ability to invest in the economy and create jobs.
Obama disagreed, saying most economists say we really need government spending in this unique circumstance to fill the hole create by economic loss.
"I think we can find some common ground on the tax side," the president said. "I think we can lower the corporate tax rate," especially if he and the Congress can close some loopholes that corporations take advantage of. "Lets close the loop holes, push aside the special interests, and we could lower the corporate tax rate," he said.
Rep. Tim Murphy, R-Penn., asked about health care, prompting the president to say that we have to have cost controls in health care and that he looks forward to hearing Murphy’s ideas.
Said Rep. Roscoe Bartlett, R-Md.: "I remember when FDR beat Hoover. Don’t you think we should not solve our personal and local problems by burdening future generations of Americans?" he asked, prompting applause.
The only reason I am pursuing this plan is because if we don’t get the economy moving again soon, the situation future generations will inherit will be worse, the president said.
"Thank you for your outreach and the spirit in which you came here," said Rep. Mike Pence, R-Ind., the House GOP Conference Chair. "You mentioned that this bill had been negotiated in the House. Let me make it clear that there has been no negotiating in the House."
Democrats have shut them out of the process, he said, to applause.
Said Pence, "we promise that we will pray for you every day and the door of this conference will be open to you."
The most applause the president got came when he said he would extend Q&A for five minutes and make the Senators wait.