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Democrats to Add Infrastructure Money to Stimulus, Schumer Says

By Brian Faler

Jan. 30 (Bloomberg) -- Democrats plan to add money for infrastructure projects to President Barack Obama’s economic stimulus package next week in a bid to win over Republican lawmakers, said Senator Charles Schumer of New York.

Schumer, the chamber’s third-ranking Democrat, said his party plans to offer at least two such amendments including one increasing mass-transit funds by $3 billion. Lawmakers also likely will add provisions to boost the housing industry and direct additional Medicaid money to more populous states, he said.

“We’re going to get more Republican support for the bill in the Senate than there was in the House,” Schumer said in a conference call today with reporters.

No Republicans joined the majority this week when the House approved an $819 billion stimulus plan designed to prime an economy that lost 2.6 million jobs last year. The package would provide a $500 payroll tax cut for individuals along with $600 billion for jobless benefits, education, infrastructure and scores of other programs.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said yesterday the House plan “doesn’t fix the main problem, which is housing,” and that his colleagues want to make changes “which will actually stimulate the economy.”

The Senate plans to take up the plan Feb. 2 with a goal of getting a bill to Obama’s desk by mid-February. The Senate version is already $70 billion larger than the House plan after the chamber’s Finance Committee voted to attach a one-year alternative-minimum-tax cut to the plan.

Highway Funds

The Senate plan currently includes $27 billion for highway infrastructure projects. Schumer didn’t put a price tag on the total potential increase, though he said, “There are Republicans as well as Democrats who think there ought to be more infrastructure spending.”

Senator Patty Murray, a Washington Democrat who may offer an infrastructure spending amendment, hasn’t decided how much to seek, her spokeswoman said.

Schumer said Democrats may also compromise with Republicans who say the stimulus plan wouldn’t do enough to boost the housing market. “There is some openness for changes on the tax side” of the package, he said.

Lawmakers are debating whether a $7,500 tax credit for homebuyers is large enough and whether those who get the credit should continue to be required to eventually pay the money back to the government, Schumer said.

Another Democrat, Senator Ben Nelson of Nebraska, plans to offer an amendment requiring businesses benefiting from the stimulus plan to use E-Verify, a government program used to ensure employees are U.S. citizens.

‘Intended Beneficiaries’

The stimulus “will be paid for by the American taxpayers and we believe that Congress should do all it can to ensure that American taxpayers are the intended beneficiaries of its efforts,” Nelson wrote in a letter to Senate Majority Leader Harry Reid, a Nevada Democrat.

The letter was co-signed by Senator Jeff Sessions, an Alabama Republican.

Senator Jack Reed, a Rhode Island Democrat, defended a “buy American” requirement in the plan, saying there are “real concerns here that these monies go to stimulating employment in the United States.”

Asked during the conference call whether the provision amounts to protectionism, he said, “I don’t think it raises the kind of concerns that some people are nervous about.”

White House spokesman Robert Gibbs said today the Obama administration “will review that particular provision,” which has raised concern among U.S. trading partners.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

Last Updated: January 30, 2009 18:08 EST

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