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House GOP objects to spending in $150 billion stimulus package

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  • NEW: House panel chairman urges support of states for sake of government jobs
  • Measures being considered would help states with budgets, pay for infrastructure
  • Top House Republican says measures will not create long-term growth
  • Republicans call for cuts to capital gains, insurance for inter-bank loans
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WASHINGTON (CNN) -- House Republicans on Monday objected to new spending measures that congressional Democrats are considering as they draft a $150 billion economic stimulus package.

House Speaker Nancy Pelosi met with Nobel prize winner Joseph Stiglitz and other economic experts Monday.

House Speaker Nancy Pelosi met with Nobel prize winner Joseph Stiglitz and other economic experts Monday.

In a letter to House Speaker Nancy Pelosi, Ohio Rep. John Boehner, the top Republican in the House, called the proposed spending "an irresponsible, business-as-usual approach that has earned this Congress the lowest approval ratings ever recorded."

A Democratic leadership aide said the stimulus package Democrats were drafting would include "a heavy emphasis on help to state and local governments."

But in their letter to Pelosi, Boehner wrote, "nothing currently being discussed by the majority as 'stimulus' will stabilize the economy long-term."

"Nothing being discussed will ease the uncompetitive nature of our nation's tax rates. Nothing being discussed will bring a single dollar of private capital into our markets, which would help stabilize and restore American families' savings and retirement accounts. And nothing being discussed will help small businesses compete and thrive," Boehner wrote.

Instead, House Republicans proposed a number of measures that, they say, will "turn the corner towards real economic growth," including:

  • Removing legal barriers to speed up new offshore oil drilling. A law banning offshore drilling expired October 1, but Republican lawmakers say lawsuits could block new offshore rigs and want judges to quickly rule on the cases.
  • Lowering taxes on income that U.S. corporations earn from their overseas subsidiaries.
  • Eliminating capital gains taxes on the sale of homes up to $500,000 for a couple.
  • Suspending capital gains taxes on securities purchased during the next two years.
  • Extending government deposit insurance to business transaction accounts.
  • Directing the government to guarantee inter-bank loans.
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    The GOP letter was released as Pelosi met Monday morning with a group of economists, including Larry Summers, a treasury secretary in the Clinton administration, and Nobel Prize-winning economist Joseph Stiglitz.

    After meeting with the economists, Pelosi, a California Democrat, said the goals of the stimulus package would be "to provide relief for the middle class, to encourage consumer confidence and to have regulatory reform by re-writing the rules for financial institutions."

    Congress passed a $170 billion stimulus package in February after the economy showed signs of weakening. That package included a measure that sent a stimulus check of up to $600 to taxpayers who made less than $75,000 a year. The checks were mailed out this summer.

    The stimulus package the Democrats are now working on would work differently: It could provide states with funds to cover mandatory Medicaid spending, which would help state governments avoid cuts to education and other programs, Democratic leadership aides said.

    The aides also said the stimulus package could provide funds to help states struggling with their own budgets, as well as infrastructure money, an extension of unemployment benefits, food stamps and more money for low-income energy assistance -- all measures that have passed the House before.

    Rep. Barney Frank, D-Massachusetts and the chairman of the House Financial Services Committee, said government jobs were one of the few bright spots in the economy.

    "The only good sign on jobs for the year has been that state and local governments have been adding jobs, which only mildly offset the great loss in the private sector," Frank said. "If we do not go to the aid of state and local governments now, they will now become an added factor to the job loss rather than something of a mitigating factor."


    The stimulus package would be separate from the $700 billion bailout package passed by Congress this month to help solve the credit crisis in the financial sector that has disrupted credit markets worldwide.

    A Senate Republican leadership aide on Friday said Senate Republicans are skeptical of a second stimulus but did not suggest there is outright opposition to one.

    CNN's Deirdre Walsh and Scott J. Anderson contributed to this report.

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