Summers warns that stimulus battle not yet over
One of President Barack Obama’s top economic advisers forecast Sunday a difficult struggle with Congress over Senate cuts of $40 billion for state and local governments from the administration’s massive spending and tax cut package to stimulate the failing economy.
The $827 billion Senate version of the plan — designed to bring the economy out of the worst downward spiral since the Great Depression — was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure.
Lawmakers were likely to begin reconciling those differences later this week, with Obama still pressing to have the stimulus measure on his desk for signing by mid-month.
But without the infusion of federal money to state and local governments, the country may still face “a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs,” said Lawrence Summers, chairman of the White House National Economic Council.