The Stimulus Package (House) Versus The Tax Cut Package (Senate)

There are some notable differences between the two economic stimulus packages proposed by both houses of Congress.
The House of Representatives, which already passed their version of the economic stimulus package. The House version would invest $550 billion into the economy plus provide $275 billion in tax cuts. The House version would create or save three to four million jobs.
But the Senate's version of the economic stimulus package is very different. Initially, the Senate Democrats increased the size of the package before realizing that they didn't have the votes to pass that package. In order to pass it, they needed a few Republicans to help them out. After negotiating with these Republicans, the Senate came up with a deal that fully or partially cut funding for several elements of the package.
The Senate's version also cut back on President Barack Obama's proposed middle class tax cut even though tax cuts are a main part of the Senate's package.

By comparison, one-third of the House package was made up of tax cuts (approximately $275 billion). The Senate version is said to include $350 billion in tax cuts, which means that in a package that costs approximately $780 billion, tax cuts are nearly half of the whole package.
So what does this all mean? It means that we are in for quite a week. The Senate has yet to vote on their package, but that vote should happen some time this week. It will be interesting to see how the states react, considering that $40 billion in funding set aside for states was slashed from the Senate's version of the stimulus package. Many states, including New York, would have benefited from that money. But now, much of it has been cut away.
The best plan is the House plan, but it was easier for the House to pass this bill. With such a solid majority, the House did not need (and did not receive) a single Republican vote. In all, 244 Democrats supported the bill. But the Senate does not have that luxury.
The Senate needs 60 votes. There are 56 Democrats and two Independents who caucus with the Democratic Party. That means they needed two votes. So instead of talking tough, they folded. They cut a stimulus package down to $780 billion and loaded it up with tax cuts for two votes. There might have been some deal-making that needed to be done, but the Senate Democrats went too far.
Economists say that we do need a stimulus package. And they also say the sooner, the better. We need a stimulus package. But we also need leaders who realize that we are in an economic crisis. This isn't time to take a hard-line stand solely based on politics. If a majority of economists say that we need a stimulus package, we should listen to those calls and implement a package that will be in the best interests of the American people.
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Top Obama Economic Adviser Admits Stimulus Bill Might not Create Jobs

The great secret about President Obama’s stimulus bill is that it is not a stimulus bill. With only 12 cents on the dollar going to actual stimulating projects this bill is actually the biggest spending bill ever proposed in congress. And people wonder why Democrats are called tax and spend liberals. A close look at this bill is justification of that label.
One of the claims that then president-elect Obama claimed was that this stimulus bill would create 3 million jobs. This claim was later amended to the less aggressive claim that the bill would create or save 3 million jobs.
Now that has changed again because according to this article President Obama’s top economic adviser is admitting that there is “considerable uncertainty” in regards to any of Obama’s claims of job creation. And this is coming from the woman who created that number in the first place.
It should be understood that all of the estimates presented in this memo are subject to significant margins of error,” they said. “There is the obvious uncertainty that comes from modeling a hypothetical package rather than the final legislation passed by the Congress. But, there is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity.
Let me sum up that statement for you.
President Obama had no real plan, that is evidenced by the phrase, “There is the obvious uncertainty that comes from modeling a hypothetical package”, he has to wait to see what congress sends him. There is a huge margin of error calculated into the number of jobs that would be created even though the administration promoted these numbers as facts, so in other words, either President Obama, or more likely Christina Romer, pulled these numbers out of his/her ass.
I think they can put these numbers right back where they came from.

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