Mass. lawmakers weigh in on second stimulus

With President Obama pushing another $200 billion plus infusion into the economy, Massachusetts congressional leaders have no shortage of ideas on how the money should be spent. Most propose a scaled-back version of the first $787 billion plan, but with the new money concentrated on some of the same major targets: transportation, clean energy projects, and local government services. One new point of emphasis: tax breaks for businesses.

In interviews with the Globe, members of the Massachusetts delegation said a second stimulus is necessary to reduce persistently high unemployment. They provided broad outlines of their proposals, without specific cost estimates, because many are still refining details as debate picks up in Congress. Many said they want the initiative funded at least partly from the $210 billion still in the bailout fund the government created last year to help banks through the credit crisis.

“At this point, the best thing we can do with the money is use it to create jobs,’’ said Capuano, who wants bailout funds spent on roads and bridges, as well as invested in the science, education, and health care industries.

Obama floated one plan for the bank bailout funds last week - providing loans to businesses looking to expand or hire new workers. The president also proposed new economic measures that could push the government’s overall stimulus spending to $1 trillion, although the final size of the package is yet to be determined.

Among Obama’s proposals: creating “cash for caulkers’’ rebates for homeowners who invest in weatherization projects, eliminating capital gains taxes on small business investment, and spending billions more on road improvements and other construction projects.

Obama stops short of a New-Deal-like public works program favored by some members of Congress, preferring a smaller investment in that category. Some Massachusetts members have argued a larger federal investment in transportation and other construction projects is the quickest way to increase hiring.

“Oftentimes, I think you can tell how the economy is going by the number of people in the street with a red flag,’’ said US Representative Richard Neal, a Democrat from Springfield. “And there are not enough of those people right now.’’

His colleague from South Boston, Democrat Stephen Lynch, said he would support a “transportation bill plus,’’ which would entail increasing the size of an upcoming annual appropriations bill to include new highway and transit projects.

Lynch and others said any new stimulus should cost a fraction of the first measure and must focus on creating and preserving jobs, and extending unemployment benefits to out-of-work individuals. In Massachusetts, the unemployment rate dropped in October for the first time in two years, but it remains at an elevated 8.9 percent, about one percentage point below the national rate of 10 percent.

Republicans in Congress have rejected calls for new spending, arguing instead for tax cuts for businesses and individuals. They also want the money left in the bank bailout fund used to reduce the government’s ballooning $12 trillion deficit.

Currently, Democratic proposals in Congress would add $170 billion in stimulus spending through a broad array of proposals. In a statement, Kerry said new spending should be used on incentives for businesses that produce solar and wind power and other renewable energy products.

“It’s the single biggest thing we could do to unleash capital, make investments in homegrown innovation, and create jobs,’’ Kerry argued.

More specifically, US Representative Edward Markey, chairman of the House Committee on Energy Independence and Global Warming, said makers of wind and solar products should receive manufacturing tax credits, while businesses and homeowners who install clean energy technologies should be eligible for separate credits. Congressman John Tierney also wants more government spending on clean energy, as well as transportation. But he also called on Massachusetts state officials to more quickly spend the stimulus money the federal government has already provided. As of the last congressional accounting, Massachusetts ranked 49th in the nation in putting highway funds to work.

Governor Deval Patrick said his administration will step up highway spending in the coming months and by the end of January will have allocated all of its $437 million in highway stimulus funds, a full month before the deadline imposed by the federal government.

Several congressmen also want more money to go to state and local governments, which are already the largest recipients of federal stimulus aid this year. US Representative Barney Frank said the primary problem with the first stimulus is that it did not provide local governments with enough money. The Newton Democrat lamented the removal of $25 billion in government aid from the bill due to a last-minute compromise with three senators: Republicans Susan Collins and Olympia Snow of Maine, and new Democrat Arlen Specter of Pennsylvania.

“Aid to state and local governments is my highest priority because you get a double benefit,’’ Frank said. “First of all, you get employment and, secondly, you get useful things - cops, firefighters, teachers. I very much regretted that the three Republican senators whose votes were needed for the first stimulus knocked that $25 billion off.’’

Casey Ross can be reached at cross@globe.com.