By Ben Pershing
Washington Post Staff Writer
Friday, March 13, 2009; A02
House Speaker Nancy Pelosi said yesterday that a second economic stimulus package is not "in the cards" in the short term, disappointing those seeking another quick infusion of federal money into the struggling economy.
Pelosi's statement came less than a month after President Obama signed the $787 billion stimulus measure into law and on the same day the administration warned state officials gathered in Washington that it will keep a close eye on how they spend the money allotted to them from that legislation.
Pelosi (D-Calif.) helped nudge the idea of another stimulus Tuesday when she said that Congress should "keep the door open" to the possibility. And House Appropriations Chairman David Obey (D-Wis.) said this week that he will begin "preparing options" for a second stimulus package.
But Democratic aides have cautioned strongly that another such plan is not a serious possibility in the short term, and Pelosi said yesterday that she "really would like to see this stimulus package play out" before contemplating another one.
"I don't think you ever close the door to being prepared for whatever eventuality may come," she said at her weekly news conference but emphasized that a second package is "just not right now something that's in the cards."
Some prominent economists have suggested that a second stimulus measure, costing several hundred billion dollars, may well be needed. Mark Zandi, the chief economist at Moody's Economy.com who has become a key adviser to House Democrats, said this week that "policymakers need to do more. I don't think we're done. . . . I think another stimulus package is a reasonable probability, given the way things are going."
The Wall Street Journal's most recent forecasting survey, a poll of 49 economists, found that more than 40 percent of respondents thought a second large stimulus package is necessary to jump-start the economy.
But several key Democrats have said they do not like the idea of another package so soon, and congressional Republicans -- who almost unanimously opposed the first stimulus bill -- have even less appetite for a second. "I think the fact that they are already talking about stimulus two indicates they already think stimulus one has failed," suggested House Republican Conference Chairman Mike Pence (Ind.).
Pelosi said that Congress has passed or would pass measures beyond the first package that would help create jobs, including the $410 billion omnibus spending bill that Obama signed Wednesday and the massive highway reauthorization bill the House will take up this year.
Pelosi said that a supplemental spending measure may be necessary to cover the costs of the wars in Iraq and Afghanistan, but otherwise, "my preference is that any appropriations that we do henceforth be in the regular order, under the regular hearing process, markup and the rest."
She said she expects that economists and others might continue to promote the idea of another stimulus package "but not from my initiation."
The debate over a second plan comes as the money from the first is only beginning to trickle into the economy.
At the Eisenhower Executive Office Building yesterday, the Obama administration gathered state government officials for a conference on implementing the stimulus. The meeting was designed to serve as a workshop and a warning on how they should use their billions of dollars from the package.
"And so I've said before . . . if we see money being misspent, we're going to put a stop to it, and we will call it out, and we will publicize it," Obama said.
Vice President Biden delivered a similar warning to the group earlier yesterday. "A little hint: no swimming pools in this money," he said, later adding: "If we don't get this right, folks, this is the end of the opportunity to convince the Congress that anything should go to the states."
Lower-level officials drove the same point home. Thomas Barrett, the deputy transportation secretary, told attendees that "there is no room for projects that are going to look stupid or be stupid" and warned against mistakes such as "buying the spa treatments and charging it to a federal contract."
More than 100 state officials attended the conference, peppering administration aides with questions about how the stimulus money will be distributed and how it can be spent. They represented every state but Idaho.
Jon Hanian, a spokesman for Idaho Gov. C.L. "Butch" Otter (R), said the governor has announced his recommendations for how the state's stimulus money should be spent. And because of the economic downturn, Hanian said, Idaho is restricting travel for state employees.
Staff writer Scott Wilson contributed to this report.