Obama gets his stimulus bill

What happened

President Barack Obama was on the verge of signing a historic $789 billion economic stimulus plan this week after a House-Senate conference committee hammered out a compromise to trim some spending. The final version of the plan is smaller, and has more tax cuts, than the $819 billion House version passed last week without any Republican votes. Three Republicans joined 58 Democrats in approving a Senate vesion earlier in the week. In response to Republican criticism, the stimulus plan—which at one point ballooned to $940 billion—grew smaller as it went through the final stages of the process, with Obama pressuring Democrats to cut some controversial programs.

In an effort to jump-start the economy, the stimulus plan will provide about $44 billion in increased federal aid to struggling state governments, $20 billion in extended unemployment benefits, and hundreds of billions in spending on highway and bridge reconstruction, health care, and education. It consists roughly of 65 percent spending and 35 percent tax cuts. Democrats said the package would create 3.5 million jobs. Speaking to a crowd in Fort Myers, Fla., Obama said the plan wasn’t “perfect,” but added, “A failure to act in the face of crisis will bring only deeper disaster. Doing nothing is not an option.”

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What the editorials said

The stimulus package is “a leap of faith,” said The Christian Science Monitor. Even before this massive spending bill was passed, the government’s future obligations for Medicare and other expenses already equaled $56 trillion—$483,000 per household. Perhaps we must pile the debt even higher “to end a debt-triggered recession.” But once the stimulus package is resolved, Congress’ next task is to rein in the long-term debt that threatens the nation’s future.

We can’t penny-pinch our way out of this very deep recession, said The Boston Globe. “The point of the stimulus is to keep money moving through the economy” by creating jobs and investing in projects with long-term benefits. That’s why GOP complaints about spending—and the Senate’s cut of $40 billion from the House’s original $79 billion in aid to states—are misguided. More than 40 states have fallen deeply into the red, and without federal aid, more workers will lose their jobs, and services to the needy will decline. “One person’s pork is another’s beef.”

What the columnists said

This is death by moderation, said Paul Krugman in The New York Times. Given the scope of the ongoing economic disaster, the House’s $819 billion plan was already too small before it got to the Senate. “Yet the centrists did their best to make the plan weaker and worse.” In all, Senate Democrats and Republicans—with the support of Obama—conspired to kill $80 billion in spending, most of it benefiting the most needy Americans. And don’t bother looking for a “coherent economic argument” to justify their actions: There isn’t one.

The bill is “indefensible” all right, said William McGurn in The Wall Street Journal, because most of the spending will do nothing for the economy. House Speaker Nancy Pelosi used this crisis to ram through a liberal wish list, but “Republicans called her bluff.” In the ensuing public outcry, some of this waste was cut, and Obama now claims he’s “comfortable” with the resulting mess. But then why is he so desperate for even symbolic Republican support? Why not let Democrats “take full credit”?

The reason is obvious, said Jim Manzi in National Review Online. This bill will trigger “an increase in national debt of trillions of dollars.” Does anyone think that federal aid to states, schools, and health-care programs will be pared once the crisis has passed? Of course not. We’re dramatically increasing “the baseline of future expenditures,” which will create a drag on the economy for years to come.

What next?

Obama may have inherited the economic crisis, but he and his party are now responsible for the government’s response. “If these policies are a success, the Democrats are going to own it,” said Democratic Rep. Anthony Weiner. “And the reverse is true as well.” Obama fully understands that his political future is being shaped by his first weeks in office. “If people don’t feel like I’ve led the country in the right direction,” he told the crowd in Fort Myers, “then you’ll have a new president.”