Psychological Financial Fusion:

Stimulus Gets Zero Elephant Support from House of Representatives; POTC Now Predicts a Choppy Market At Best Until President Obama Announces Some Concessions; President Lincoln's Birthday (Thurs. Feb 12th) May Bring a Whole New Rally for a Number of Patriotic Reasons; POTC Predicts the Senate Vote Will Break Down Entirely Differently than Now Being Reported; President Obama May Still Bend a Little to the Elephants Side as He Looks to be an Impressive First Term President and Perhaps a Stronger More Dominant Second Term Leader; President Obama Must Step on Some Donkey's Toes and Announces He Will Not Repeal the Bush Tax Cuts Before They Expire in 2 Years; POTC Feels the New Administration Would be Walking a Dangerous Tight Rope IF It Were To Pass an $800,000,000,000+ Spending Package Without Support From at Least twenty Elephants; Pres Obama has his work cut out, yet we believe he will succeed; the Negative Sentiment May Change by Pres Lincoln's Birthday (caution to all forward-thinkers). WASHINGTON (Dow Jones)--The U.S. House of Representatives voted Wednesday evening to approve a roughly $819 billion economic recovery package, the largest-ever federal government attempt to kickstart the moribund American economy. -The Democrats relied on their considerable majority to force the legislation through, with not a single Republican vote in support of the package. -In the end, the vote was 244-188. -Despite a personal appeal from President Barack Obama to Republicans and Democrats to join together, the vote was on a strictly partisan basis. Obama traveled to Capitol Hill this week to meet with House and Senate Republicans, but with the former group at least, his persuasive attempts fell on deaf ears. -In a statement, Obama said he was grateful that the House moved quickly to pass the stimulus plan. -"The plan now moves to the Senate, and I hope that we can continue to strengthen this plan before it gets to my desk," said Obama. "But what we can't do is drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do." -The estimated cost of the package was reduced to $816 billion from its original estimate of $825 billion, and then $3 billion were added on the House floor to increase funding for public transit systems. -The bill includes $544 billion in new spending, with investments in infrastructure repairs; significant increases in grants to states to help them deal with the deteriorating economy; and financial assistance to lower-income individuals most affected by the recession. -There are roughly $275 billion in tax relief measures for both individuals and businesses, the highlight of which is a $500 tax credit for most working Americans. -"We have crafted a comprehensive package that will provide benefits to every sector of our economy, targeting tax relief to middle America, poor America and businesses that can create new jobs," said Rep. Charles Rangel, D-N.Y., the chairman of the House Ways and Means Committee. -House Minority Whip Eric Cantor, R-Va., said the outcome of the vote reflected Republican frustrations over not being genuinely consulted on the makeup of the stimulus package. -"He's the one that came to town and said he's going to change the way this process works," Cantor said of Obama. "I think this country is sick and tired when they look and see $1 trillion thrown around like this, and set on to the backs of our children and our grandchildren." -Republicans consider the true cost of the stimulus package to be around $1 trillion, once the federal government's interest cost is factored in. -Attention will now turn to the Senate, where Democrats may have to make at least a gesture toward the Republican minority to win sufficient support to pass it. -Senate Majority Leader Harry Reid, D-Nev., said he anticipated the legislation would be come up on the Senate floor Monday, with votes on amendments to begin on Tuesday. -There remain considerable differences between the House and the Senate versions of the legislation, mainly on the tax provisions. -The most noticeable of these differences is that the Senate included a $70 billion annual patch to the Alternative Minimum Tax to ensure that middle-class Americans wouldn't be inadvertently caught up by the measure. -Congress must pass this each year as the AMT hasn't kept up with inflation. House lawmakers have opposed including it in the stimulus bill, arguing that it isn't truly stimulative. -Senate Republicans are trying to construct a housing package they will try to add to the stimulus bill when it comes up for debate there possibly as soon as the end of the week. This would include a hefty homebuyer credit and a government-subsidized 4% discounted mortgage rate. Republicans are also proposing a measure to allow U.S. multinationals to bring taxes earned from their foreign operations onshore at a discounted income tax rate. -It is unclear whether any of these initiatives will be successful at this stage. Assuming all Senate Democrats were to cast a vote in favor of the stimulus plan, the majority would only need the support of two Republicans in order to be able to pass the bill. -In the House, Republicans tried to alter the package, introducing a substitute which involved primarily tax cuts rather than new spending. The only spending measure included in it was an extension to unemployment insurance benefits already in the Democratic plan. -But the alternative was easily defeated by the Democrats, as was a separate attempt to strip out much of the spending in their plan. -Obama spoke this week about setting politics aside and urged lawmakers of both parties to get behind the recovery plan. -He called the stimulus plan "one leg" of his administration's efforts to steady the U.S. economy. -Regardless of their no votes Wednesday, House Republicans made clear they would be willing to continue talking to the Obama administration over inclusion to the plan of items like a possible extension of tax relief to small business owners. -Once the Senate completes its work on its version of the bill, lawmakers from both parties and chambers will gather to iron out their differences. It is likely that if Obama wants to enforce any changes to the package, it could occur then. -Both the White House and lawmakers have said they hope to finalize the package so the president can sign it before the congressional recess in mid-February. -Reid reiterated that goal on Wednesday, saying he hoped the Senate would conclude its consideration of the package by the end of next week. This would give House and Senate lawmakers a week to negotiate the final terms of the legislation. -By Corey Boles and Patrick Yoest, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com (END) Dow Jones Newswires January 28, 2009 19:03 ET (00:03 GMT) Copyright (c) 2009 Dow Jones & Company, Inc.- - 07 03 PM EST 01-28-09