Will bailout crimp Democrats' spending plans?

‘Investing in the future’
And if the bailout bill ends up costing the Treasury money, she said, “the financial services industry and those affected by this would have to make up that shortfall.”

Turning to new spending, Pelosi used the word “invest” or “investment” five times in response to a question, using it in the accepted Capitol Hill sense: federal spending on items that Congress deems useful and likely to encourage economic growth.

“Nothing brings more money back to the Treasury than investing in the education of the American people,” she said.

She also argued for “investing in the future, whether it is infrastructure, whether it is investing in innovation to create good paying jobs in America, whether it is investing in our health care system in a way that reduces costs, reduces harm and improves health care.”

The spending would, she predicted, have the salutary effect of “creating good paying jobs, bringing jobs to America.”

Democrats won’t let the fiscal picture discourage them, Pelosi said.

And yet she also said, “We have said all along that when we go forward we do not want to increase the deficit.”

The paradox: How to spend more — much more — and yet not increase the deficit and borrowing at a time of sluggish income growth and with $800 billion in revenue potentially already spoken for?

Evoking Ronald Reagan
Using the phraseology of Ronald Reagan, Pelosi spoke of “subjecting the spending of the federal government to the harshest scrutiny to remove waste, fraud and abuse.”

And Pelosi assumes the $120 billion per year being spent on Iraq will go away fairly quickly.

But one longtime Pelosi ally, Rep. George Miller, D-Calif., the chairman of the House Education and Labor Committee, did not sound quite as bullish as the speaker.

Miller said, “I don’t know yet” when asked whether the bailout and tax extenders bill might inhibit Congress’ desire to spend more on domestic items.

“When you’re inheriting an $11 trillion debt, you have to have a fundamental conversation," Miller said. "The new administration and the Congress have to decide, because there are so many unmet needs. Whether it will inhibit or not, or whether we’ll have to figure out another way to finance it, I don’t know yet.”

He added, “There’s a pent-up demand in the country for infrastructure, for research and development dollars. We’re falling way behind here.”

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