Economic Stimulus

The Stimulus Bill that President Obama will sign today in Denver is probably a good thing, by and large.  But, it’s certainly not nearly as stimulatory and, therefore, as good, as it could have been.  By making early passage of the bill a priority, the President traded away the possibility of making the bill better, which in turn would almost assuredly have garnered more bipartisan support.  This is unfortunate for two reasons.  First, a bill of this magnitude and importance needed to communicate to the American people that it had the support of the majority of its political leadership.  Second, just a few weeks into his presidency, Obama has managed to starkly divide Republicans and Democrats.  We are almost as polarized as it’s possible to get.  That does not bode well for the next four years.  Meeting with Republicans on the Hill and at cocktail parties at the White House after the bill had been written largely by liberal House Democrats apparently didn’t demonstrate to Republicans (all but three) that he was serious about bipartisanship and doing business in a new “postpartisan” way. 

Additionally, the Washington Post reported yesterday in a story of the same name that “Politically, Stimulus Battle Has Just Begun.”   This battle will involve Republicans casting blame or the Democrats claiming credit for the perceived negative or positive effects of the bill on the U.S. economy.  We’ve also seen, a mere 3 weeks into the 111th Congress, the launch of the likely political issue of the 2010 and 2012 campaigns. 

I would argue that a more traditional and slower process–one that was much more clearly reliant on the advice and counsel of economic experts of various political persuasions–would have both built public confidence and made it much more difficult for both Democrats to have ideologically perverted and Republicans to have ideologically opposed the bill.  Further, if after such an open and transparent process Republicans had still opposed the bill, the Democrats’ case against the Republicans for playing politics with the American economy would have been all the stronger.  As it is now, the political winner of this battle is far from certain.  Everything will obviously depend upon how the economy performs in the next 18 months and whether the public perceives the stimulus to have been helpful or not.  The bottom line is that our partisan politicians played a giant game of Russian Roulette with our economy instead of doing the job they were hired to do.

By tomorrow at the latest the country should have itself a brand new stimulus bill, having spent a gigantic amount of money that we’re pretty sure, but not positive, will improve the chances that the country can keep this recession under control.  According to the New York Times today, there’s still a good deal of tinkering going on with the bill, hence the delay in getting the bill to the House and Senate floors for a vote.  The Times story is called Even After the Deal, Tinkering Goes On.

There’s also a very interesting piece in the Times today that looks into the how the stimulus bill came to be and offering a glimpse of how the White House let Congress take the lead initially only to wrest back control of the bill this week, largely via Rahm Emanuel.  It’s a worthwhile-read.  It’s entitled Stimulus Offers Glimpse of Obama’s Battle Plan.  I still believe that there would have been more Republican votes, House and Senate, had the administration not let the House draft the original bill.  This was a big strategic mistake that may have long term repercussions in a clear gelling of the Republican opposition.  It is also appearing clear that the events relating to the stimulus of the last few weeks heavily influenced Senator Gregg’s withdrawal as Commerce Secretary.  It is more evidence that this bill may have set the tone for Democrat-Republican relations in this Congress–not a good thing. 

As for what the stimulus means, David Brooks in his column in the Times today presents us with The Worst-Case Scenario.  I doubt if this scenario will play out, but it is any one’s guess at this point.  That the country has a President who’s also a great communicator is a positive.  Skillful communication proved invaluable to the success of the Reagan presidency.  Another dark voice this morning on the stimulus–that the stimulus is not nearly enough–is Paul Krugman in his Times piece today entitled Failure to Rise

There’s yet one more cautionary piece to read this morning in the Times that suggests the country hasn’t adequately assimilated the lessons learned by Japan in dealing with economic crisis in the 1990s.  It’s entitled In Japan’s Stagnant Decade, Cautionary Tales for America.

All in all its pretty sobering reading.  It’s clearly far too early to break out any champagne to celebrate government’s “fix” of the economic crisis.  Let’s check back in 2010.  We may know something by then.   

In a Facebook discussion the other day, someone replied to a comment I’d made with a statement that included the following sentence.  “Liberals are, let’s face it, nicer people.”  The writer was explaining why liberals (Democrats) would make an attempt at bipartisanship now that they’re in power when Republicans never did when they had power.  It’s represents something that I’ve observed for years. 

I live in Washington, DC, which is quite a liberal place.  It’s got to rank up there with Santa Monica and Berkeley in its high ratio of liberals to conservatives.  Most of my friends are far more liberal than I.  And for years, especially when the Republicans were in control of the White House and both Houses of Congress, I heard lots about how much more dastardly Republicans were than Democrats.  While I’ll give you that Newt Gingrich as speaker got this whole era of incivility going, he merely started what has become standard operating procedure for the party in power.  No one party is all saint or all sinner.  Both play a pretty mean and incivil game these days.  It is what the parties perceive as being necessary in order to both win elections and advance their partisan agenda.  I find it disgusting and an indication that the “two-party” system no longer works.  It desperately needs to be shaken up.

Supporting my view that both parties play the same game when in power was a story in yesterday’s Politico entitled Partisan complaints come with an echo.  While the story made its basic point well, it also seemed to suggest that Democrats have been a little nicer, the story citing instances where Republicans pushed legislation through the system without minority party participation.  One example given was an energy bill in the fall of 2003.  What it doesn’t mention was that two years later a much more far reaching energy bill, the Energy Policy Act of 2005, was passed with strong bipartisan support.  In the latter bill, the committees, minority and majority, worked to produce legislation that could and did garner widespread support.  That the second energy bill was far more expansive and useful to the country speaks to its bipartisan nature.  Bills that bypass the system and are dominated by one party are going to be much more limited in what they can accomplish.

Our system will work best when there is a clear set of rules that both parties perceive to be fair and that are respected by both parties.  A process that is perceived to be fair allows for a congeniality that makes it much harder for the minority to oppose for the sake of opposition.  On the other hand, when one party attempts to shut the other party out of the game, as was largely the case when the House put together its recent stimulus package, the opposition is likely to be much more united and vocal.  President Obama has been right in trying to reach out to Republicans.  Even if ultimately rejected in this instance, he came out better in the eyes of America than did those who opposed him.  Meanwhile the U.S. House of Representatives, and both parties, came out looking bad once again in the eyes of America.  I’ve said before and I believe that President Obama’s biggest mistake with the stimulus was yielding too much control to Nancy Pelosi’s House of Representatives.  It was incapable of doing what needed to be done here, for a number of reasons.  In the future the White House has to take a much more active lead and try to keep the House under relative control.  It will be the only way that the post-partisan dream can remain alive and ultimately deliver needed legislation in the national interest.  Otherwise it will be business as usual which virtually everyone acknowledges is broken.  And no, I do not believe liberals are nicer people.  It just seems that way to liberals. 

Today I’m going to turn from the stimulus package to the bank rescue effort, which I’ll call “bankaid.”  Unlike the stimulus, which was put together by a committee (actually several committees and quasi-committees) and looks like it, the bankaid package appears at first glance to be the product of a much more thoughtful process. 

The New York Times reports today that Treasury Secretary Geithner prevailed over others in internal administration debates hashing out the details of the bankaid package.  I think that’s a very good thing.  It means it was probably less about politics and more about solving the significant problem in a rational way.  The story is entitled Geithner Said to Have Prevailed on the Bailout.  The Washington Post’s story today on the bankaid package is entitled New Bailout May Top $1.5 trillion.  The Post story reports that “Geithner will not ask Congress for more funds than the roughly $350 billion that remain in the Treasury Department’s original rescue package for the financial system….The rest of the money would come from other government agencies, such as the Federal Reserve, as well as private-sector contributions.”

For a perspective on the package expected to be announced today, I’d recommend David Brook’s New York Times piece on the subject, entitled Showing Some Discipline.  Here are the opening paragraphs of the piece:

 It’s no fun being a leader in a financial crisis. You’ve got to be bold but reassuring, free-spending but disciplined. You must decisively crush the short-term problem without freaking everybody out and leaving a long-term mess.

To my mind, the stimulus packages on Capitol Hill fail to strike these balances. They are broad but sloppy, too slow to make a quick difference and too enduring to avoid fiscal damage.

But another part of the administration’s economic strategy is being unveiled today by Treasury Secretary Tim Geithner, and at first blush the news is much happier. Geithner’s plan is huge but also disciplined. It’s designed by someone aware of government’s limitations.

In closing, I would observe that we are certainly living in interesting times and that Washington, DC, where I live, is, indeed, a most interesting place to be at this moment in time.  Although I’m not a player or even direct observer of what’s going on here, I’m inclined to believe that I feel more deeply connected because of my physical proximity (I am in a two mile radius of both the White House and the Capitol) than I would if I lived elsewhere in America.  The District is also delighted with it’s new resident, clearly someone who relishes getting out into the city and being a part of it.  The Bushes might as well have lived in Texas for all they saw of Washington, DC.   All in all, it’s a good time to live in Washington.  


What could and should have been an opportunity to bring our political leadership together to reach consensus on a plan to extricate the country from a severe economic crisis has turned into a living, breathing example of why our political system is broken.  Coming as it has in the first weeks of his presidency, Obama has been handicapped in his ability to control the situation.  It has, however, been a first and big misstep, one from which I doubt if he’ll fully recover.  By this I mean the change that Obama promised to bring to the country will be much less than it could have been.  We will see change, of course, in substance (liberal vs. conservative), temperament (considered vs. rash), and style (warm vs. haughty) but we will not see the sweeping promise of a post-partisan America.  Obama’s biggest mistake was in letting Nancy Pelosi’s House of Representatives, hotbed of liberalistas that it is, take the first crack at the stimulus bill.  That set the stage for disaster and ‘close to disaster’, if not outright disaster, is what we appear to have achieved.  Liberal Democrats are screaming about Conservative Republicans and vice versa.  Bipartisanship, unless you can call three Senators bipartisan, is dead on arrival.  So much for post-partisan America.

This did not have to be.  For one, the President’s Day deadline was artificial, and all but assured a half-baked and un thought-out stimulus package.  I see no point in really following this story any more.  The damage has been done, primarily to the prospect of doing business in a profoundly new way in Washington.  As for the stimulus bill, it will either help cushion the free fall the country’s economy is in or it won’t.  If it does help, things will still be bad enough to enable Republicans to claim it was a huge waste of money (campaign issue 2010).  If it fails, the Democrats can blame the Republicans in not letting them pass a bigger package.  It will be no-win for the American public and I fear it could be the issue that helps propel an unreformed Republican Party back into power, at least in the House and Senate, although this will probably take until 2012.  This is all a nightmare from my centrist perspective.

I was going to talk about some other stimulus ideas, such as the novel gift card idea, or critique Paul Krogman’s blast at “The Destructive Center” but what is the point.  Novel ideas aren’t welcome and liberal ideologues like Krogman, as their conservative ideological brethren, will keep blasting away at all who don’t share their ideololgical worldview.  It’s very disappointing.  Welcome to American Politics, 2009 Edition. 

There is a brilliant piece by David Brooks in today’s New York Times.  It’s entitled The Gang System.  I agree with it entirely. 

Here in Washington at least, there are too many liberal folk who see nothing wrong with the stimulus bill as drafted by the House and who think any Republican opposition is purely political.  My view is that Republicans on the right are sincere in their philosophical opposition, but every bit as off the mark as were the liberals who drafted the House bill in the first place.  Our salvation Brooks suggests will come from what I call the rational center.

Read the Brooks piece.  I think he’s right that the future of the Obama presidency is at stake in this opening debate of his presidency.  Either Obama identifies with and nurtures the rational center and is able to become a transformational “post-partisan” leader, or he becomes but an orthodox Democrat liberal who can lead our system nowhere it hasn’t been before.  Here’s hoping it’s the former.

The news this morning doesn’t look as good as it did yesterday on the stimulus front:  It’s unclear whether Labor, and thus its supporters in the Senate, will approve of the watered down “Buy America” provision; apologists for the House bill are coming out of the woodwork to defend the original bill, apparently including the President; and the reformist momentum that seemed to be present on Tuesday has apparently stalled.  What does it mean?  It increases the chances that a highly flawed bill could be the one that’s voted upon by the Senate as early as today.  There’s still hope, however.

As concerns the “Buy America” provision you can read of yesterday’s developments in these two stories in the New York Times and Washington Post, respectively:  Senate Agrees to Dilute ‘Buy America’ Provisions and Stimulus Bill Gets Housing Tax Perk.  As I noted yesterday “Buy America” a terrible idea.  While I’d prefer no such provision, the added language, should help.  According to the above-referenced Times story, the words added to the provision are the following:  “applied in a manner consistent with United States obligations under international agreements.”  My concern here is that this will just open the door to questionable domestic interpretation of what is legal under international agreement and in turn to claims by other countries over that interpretation.  This is all to appease Labor.  Distasteful policy making.

As to the backlash against efforts to reform the House bill, there are two pieces worth noting.  The first is the President’s Op-ed in this morning’s Washington Post.  It’s entitled The Action Americans Need.  It’s disappointing.  It doesn’t say much and seems designed to comfort the interest groups on the left who don’t want to reform the House bill.  The President continues to work with Senate moderates, however, to find compromise.  This is good.  Today’s other apologist, who I sometimes suspect has an office in the Democratic National Committee Headquarters so partisan is he, is E. J. Dionne who spouts a lot of nonsense in his column in today’s Washington Post.  The piece is entitled Time to Play Hardball.  No, Mr. Dionne, it’s not.  Hardball won’t get additional Republican votes, which is what this bill needs.  It is also worth reminding ourselves that no compromise bill is going to get overwhelming Republican support.  It won’t because the majority of Republicans are too partisan or too ideologically conservative to be able to move to the center for the greater good.  But they don’t matter.  Those who matter are the relative centrists.  Get few or none of them and the bill has failed, even it it passes.  Get most, if not all, of them and it means the country has probably produced a better bill than the one that passed the House last week.  

Finally, as concerns the reformist efforts getting stalled, I note a fine editorial in the Washington Post this morning.  The Post editorial staff gets it.  The piece is entitled The Senate Balks: Why President Obama should heed calls for a more focused stimulus package.  Because I agree with it in toto, here’s the editorial in its entirety:    

Today in The Post, President Obama challenges critics of the $900 billion stimulus plan that was taking shape on Capitol Hill yesterday, accusing them of peddling “the same failed theories that helped lead us into this crisis” and warning that, without immediate action, “Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.” A thinly veiled reference to Senate Republicans, this is a departure from his previous emphasis on bipartisanship. Still, as a matter of policy, Mr. Obama is justified in signaling that the plan should not be tilted in favor of tax cuts — and that the GOP should not waste valuable time trying to achieve this.

However, ideology is not the only reason that senators — from both parties — are balking at the president’s plan. As it emerged from the House, it suffered from a confusion of objectives. Mr. Obama praised the package yesterday as “not merely a prescription for short-term spending” but a “strategy for long-term economic growth in areas like renewable energy and health care and education.” This is precisely the problem. As credible experts, including some Democrats, have pointed out, much of this “long-term” spending either won’t stimulate the economy now, is of questionable merit, or both. Even potentially meritorious items, such as $2.1 billion for Head Start, or billions more to computerize medical records, do not belong in legislation whose reason for being is to give U.S. economic growth a “jolt,” as Mr. Obama himself has put it. All other policy priorities should pass through the normal budget process, which involves hearings, debate and — crucially — competition with other programs.

Sen. Susan Collins of Maine is one of the moderate Republicans whose support the president must win if he is to garner the 60 Senate votes needed to pass a stimulus package. She and Democrat Ben Nelson of Nebraska are working on a plan that would carry a lower nominal price tag than the current bill — perhaps $200 billion lower — but which would focus on aid to states, “shovel-ready” infrastructure projects, food stamp increases and other items calculated to boost business and consumer spending quickly. On the revenue side, she would keep Mr. Obama’s priorities, including a $500-per-worker tax rebate.

To his credit, Mr. Obama continues to seek bipartisan input, and he met individually with Ms. Collins for a half hour yesterday afternoon. We hope he gives her ideas serious consideration.

Let’s hope the efforts of the Senate moderates continue today and a number of the bill’s unstimulative excesses are cut from it.  Then let’s hope it passes the Senate with a healthy majority.  This would be good news for the country.

According the Washington Post this morning Senate Democratic leadership has realized that the Stimulus Bill will not pass without major reform.  Democrat votes alone will not be enough and the GOP must be consulted.  I regard this as very good news especially if the process is driven, as it now appears to be, by centrists in both parties.  There is now hope that the bill that emerges will actually accomplish its major objective of actually stimulating an increasingly moribund U.S. economy.  This story can be found in the piece Senate Lacks Votes to Pass Stimulus.   

Another interesting perspective on all of this can be found in Maureen Dowd’s column today in the New York Times.  It’s entitled Well, That Certaintly Didn’t Take Long.  Here’s an excerpt:

Mr. Obama should have taken a red pencil to the $819 billion stimulus bill and slashed all the provisions that looked like caricatures of Democratic drunken-sailor spending.

As Senator Kit Bond, a Republican, put it, there were so many good targets that he felt “like a mosquito in a nudist colony.” He was especially worried about the provision requiring the steel and iron for infrastructure construction to be American-made, and by the time the chastened president talked to Chris Wallace on Fox Tuesday, he agreed that “we can’t send a protectionist message.”

Although I haven’t addressed it here before, the “Buy America” provision had to go.  According to economic historians, there’s apparently not a much better a way to fuel a worldwide depression than to start a trade war.  The “Buy America” provision inserted by House Democrats was just such a boneheaded stunt and needs to see the dustbin.  There are many others, which it seems the Senate is actively addressing.  I am heartened by today’s news and developments and I must also give Obama great credit for listening and being willing to adapt to reality.  What a marvelous change from the last 8 years where our President didn’t listen to anyone but himself and Mr. Cheney.  It encourages me to believe that we now have a leader who’s worthy of the responsibility he’s been given. 

The Senate has begun it’s process of fixing the deeply flawed stimulus bill passed last week by the House of Representatives.  Consensus seems to be growing that the House bill is a dog and must be recast to have both a stronger shot at stimulating the economy and garnering significant bipartisan support.

In a meeting with a number of Democratic lawmakers yesterday, President Obama apparently “took a blunt tone with the lawmakers, urging them to drop whatever needs to be cut from the bill to gain bipartian support and to pass Congress soon”,  so reports the Washington Post in a story today entitled Obama is Upbeat On Stimulus Plan

ABC News’ The Note also reports this morning that it will be centrists in the Senate who will ultimately decide the content and fate of the stimulus bill.  Here’s an excerpt:

Team Obama lost the early battle to define the bill — which has become a pork-stuffed monstrosity, instead of economic salvation wrapped in legislation.

That’s where Senate centrists come in. The loose coalition of lawmakers that are scrubbing the measure with an eye on offering joint amendments — being led by Sen. Ben Nelson, D-Neb., and Sen. Susan Collins, R-Maine — are quickly becoming the group to watch.

They have the votes to exert their will, and that means sorting out spin from reality (or at least their take on it) on a measure that’s easy to hate for its scope, and maybe easier to mock for its specifics.

I am always happy when I see centrists exerting their potentially considerable influence.  I know that when they do, ideology and partisan fervor will take a back seat to pragmatic policy-making.  This is what has needed to happen since Pelosi and her crew got the first cut at the bill. 

The slower Senate process is also allowing for greater scrutiny and thought to be given to particular provisions of the House bill.  As I argued last week, this is too important a bill to rush.  While we should slow this process down even further if we’re to avoid all of the boondoggles, fortunately this additional scrutiny and thought is showing us at least some of the flaws.  One such flaw, in my opinion, concerns the House bill’s mandate that billions of dollars be spent to expand broadband internet service to rural and otherwise under-served America.  While important, we need to make certain that any such program is done right.  This is discussed in an excellent article in the New York Times today entitled Internet Money In Fiscal Plan: Wise or Waste?  Here’s an excerpt:

But experts warn that the rural broadband effort could just as easily become a $9 billion cyberbridge to nowhere, representing the worst kind of mistakes that lawmakers could make in rushing to approve one of the largest spending bills in history without considering unintended results.

“The first rule of technology investment is you spend time understanding the end user, what they need and the conditions under which they will use the technology,” said Craig Settles, an industry analyst and consultant who has studied broadband applications in rural and urban areas. “If you don’t do this well, you end up throwing millions or, in this case, potentially billions down a rat hole. You will spend money for things that people don’t need or can’t use.”

Dozens of programs included in the stimulus measure could entail a similarly complicated cost-benefit analysis. But with Congress and the White House intent on adopting the economic recovery package by the end of next week, taxpayers are unlikely to find out whether these programs are great investments or a total waste — or something in between — until long after the money is out the door.     

Let me close by linking to another advocate of slowing this stimulus train down a bit, again to make sure we get the most bang for the extraordinarily large bucks.   He is Richard Cohen of the Washington Post in his column today entitled $100 Billion and No Change Back.  He points out that the funds heading to the Department of Education are going with no “reform” strings attached and he argues that we are losing an incredible opportunity to make a difference.  Slowing the train down can give us the time to do it right.  I agree with him completely.

So, let’s hope that the slower train that is the United States Senate slows down even further and allows more input that makes this bill as good as we can get it before it goes to the President’s desk for signature.  Getting a bill in the middle of February is less important that getting it right.  A few more weeks is not going to matter if we can do a much better job.

The week ahead promises to be a big one.  We will begin to see, if it is indeed possible, the Senate’s attempt to right the wrongs of the House stimulus bill.  I think it is possible, and indeed likely.  It will be challenging, however, and the reasons for finding some middle ground are extraordinarily strong. 

For a story from yesterday discussing the move toward a compromise in the Senate see Democrats Indicate Areas of of Compromise on Stimulus from yesterday’s New York Times. 

Yesterday’s papers also offered perspective on some of the deeper issues that are being addressed in this stimulus bill and they are deep indeed.  There are many of us, including many Republicans (the ones who think that a government-funded economic stimulus is even necessary), who think the stimulus should first and foremost be about stimulating a stalled U.S. economy.  There are others, in particular House Democrats, who want the stimulus to begin to address social issues they feel have been too long ignored.  “Some of what is going on might best be called a classic case of pent-up demand–demand by Democrats for the kinds of programs that they could never get passed during the Bush years.”  This quote is from a New York Times story that ran yesterday entitled A Stimulus Plan With Dual Goals: Reform and Recovery.  It is an excellent article that explains why this stimulus bill is so controversial, especially among Republicans.  What’s controversial is the bill’s attempt to do two things at once, stimulate the economy and begin to reform the system.

My strongly held view is that this bill needs to be about stimulus with only small doses of “reform”.  Yet I got a clearer picture of the philosophical debate being played out here in a column in yesterday’s Washington Post by former secretary of labor Robert B. Reich.  It’s entitled Once the Stimulus Kicks In, the Real Fight Begins.  Who knew that the fight that’s being waged here in the stimulus bill is one between “cyclists” and “structuralists” for control of U.S. economic policy.  In fact, Reich argues that this fight will only get bigger in the years head as attentions turn to entitlement reform.  I certainly had never thought of it in these terms.  I regard this as a must-read piece in helping one build an appreciation of the philosophical battle that’s being waged behind the scenes.  While I would classify myself fundamentally as a cyclist, it is very helpful to me to understand the structuralist argument.  While I don’t think America can ignore growing structural inequities, as it does almost uniformly under Republican-controlled government, I believe the battle for structural reform has to be subtle and limited, and it cannot supplant the reality of business cycles.  Hence my view that the overly ambitious structural reform measures contained in the House stimulus bill are inappropriate to the task at hand, which is stimulating the economy into growth.     

There was another piece in yesterday’s Washington Post that was very helpful to me in more fully appreciating the complexity of the task of writing a stimulus bill, particularly a stimulus bill that will actually accomplish its goals.  It is Amity Shlaes’ FDR Was a Great Leader, But His Economic Plan Isn’t One to Follow.  Obviously Ms. Shlaes is not a “structuralist”.  At the very least she has feet firmly planted in the “cyclist” camp.  As previously when I’ve read Ms. Shlaes, I am struck by her historically informed argument in favor of letting the private sector, not government, fuel economic growth.  She does not believe a stimulus bill along the lines of that being crafted will be useful.  Her formula would be to first strengthen government regulation of the markets and than to incentivize the private sector to grow.  Here’s an excerpt:

The Depression tells us that public works are probably less effective than improving the environment for entrepreneurs and new companies. The president has already put forward a big tax cut for lower earners. He might offer a commensurate one for higher earners. He might expand the tax advantages he is currently offering to companies — wider expensing of losses, for example — and make them permanent. A discussion that permits the word “trillion” might also include the possibility of bringing down U.S. corporate taxes, taxes on interest, dividend and capital gains — again, permanently. The cash that a relatively competitive United States draws from abroad will move the country forward faster than any stimulus.

So the Depression and the New Deal are both worth going back to, but for different reasons than many suspect. We may rely on the best of the New Deal, the matter-of-fact bravery our parents and grandparents showed then, to help us through today’s unexpected challenges. But we don’t have to repeat New Deal stimulus experiments, because we know that they didn’t work.

This all makes me think, again, that we are rushing into this stimulus too fast.  This needs to be much more carefully crafted to do more good than harm (the principal harm being a gigantic increase in the U.S. deficit).  As it is, I fear we’ll end up with an economically inconsequential mishmash that only manages to raise the deficit to staggering new heights and create along the way some new and ongoing entitlement programs.  This concern is compounded when one factors in that our country’s true deficit is much larger than that which is most often discussed.  (See George Will’s column yesterday entitled Congress Will Have the Buffet.) 

In closing, let me cite two additional columns, both from the Washington Post that reinforce my growing fear that this bill is deeply flawed and needs repair.  The first, published today, is Robert J. Samuelson’s Too Little Bang for the Bucks.  Here’s an excerpt:

The decision by Obama and Democratic congressional leaders to load the stimulus with so many partisan projects is politically shrewd and economically suspect. The president’s claims of bipartisanship were mostly a sham, as he skillfully maneuvered Republicans into a no-win position: Either support a Democratic program, or oppose it — and seem passive and uncaring.

But the result is that the stimulus, as an act of economic policy, is hobbled. A package so large can be defended only because the economy is so weak — and seems to be getting weaker by the moment. The central purpose is simple: halt downward momentum. Perhaps some of the out-year spending might ultimately prove useful. But the immediate need is for the stimulus package to stimulate — now. It needs to be front-loaded; it isn’t.

The second column is David Broder’s piece yesterday in the Washington Post entitled The Votes Obama Truly Needs.  This is another must-read.  Broder hits the nail squarely on the head and echoes my call to slow this train down in order to make certain delivery of the desired product.  He also argues, correctly, that the relevancy and success of the Obama presidency is at stake.  Failure to get a bipartisan majority on the stimulus bill will set a precedent that will be hard to break.  Here’s an excerpt:

This bill, so much larger than ordinary legislation, even the wartime defense appropriations, is almost certain to be the biggest, if not the last, weapon the government employs to halt the sickening economic slide that has gripped the country in the past five months. So much is uncertain, and so much is riding on it, that it’s worth taking time to get it right.

Professional economists from both the right and left have raised questions that are anything but frivolous about its design. Martin Feldstein, a top Reagan adviser, has questioned the efficacy of the current menu of tax cuts and spending proposals to generate consumer demand and produce jobs. Alice Rivlin, who played a similar role for Bill Clinton, has called for a sharper focus on short-term job growth as distinguished from slow-acting steps for energy independence or health-care quality. Even the Congressional Budget Office has challenged how quickly this massive infusion of dollars will be felt in family budgets and the marketplace.

Beyond these policy challenges, there are political considerations that make it really important for Obama to take the time to negotiate for more than token Republican support in the Senate.

Nothing was more central to his victory last fall than his claim that he could break the partisan gridlock in Washington. He wants to be like Ronald Reagan, steering his first economic measures through a Democratic House in 1981, not Bill Clinton, passing his first budget in 1993 without a single Republican vote.

The first way leads to long-term success; the second foretells the early loss of control.

Yes, this will be a very important week in Washington.  There is a lot at stake.

« Previous PageNext Page »