Sparks fly over a plan to boost the economy
The Democrats’ $825 billion stimulus bill began moving through Congress, after President Barack Obama warned skeptical Republicans that the economy was at “a perilous moment” and required a massive and immediate b
What happened The Democrats’ $825 billion stimulus bill began moving through Congress this week, after President Barack Obama warned skeptical Republicans that the economy was at “a perilous moment” and required a massive and immediate boost. Obama struck a conciliatory tone on Capitol Hill and persuaded House Democrats to remove from the bill several provisions that were opposed by the GOP, including $200 million to fund purchases of contraceptives through Medicaid. But the president declined to reduce the bill’s spending, or to increase tax cuts, as Republicans had wanted. “I won,” he reminded them. Roughly two-thirds of the bill is devoted to spending and one-third to tax cuts.
The Democratic plan would funnel tens of billions in spending to education, infrastructure, energy, environmental, and social programs. About 65 percent of the funding would be spent by 2010, according to the Congressional Budget Office. Republicans said House Democrats had larded the bill with pork and politically motivated programs that had little to do with stimulating the economy. “We cannot borrow and spend our way to prosperity,” said House Minority Leader John Boehner. “We don’t think it’s going to work.” The Senate, where GOP opposition appeared less solid, was expected to begin debate in the coming week.
What the editorials said This monstrous spending spree bill is even worse than expected, said The Wall Street Journal. Only about $90 billion would fund what could “plausibly be considered a growth stimulus,” including $30 billion for bridges and highways. Instead, money would be lavished on “every pent-up Democratic proposal of the last 40 years.” The plan includes $50 million for the National Endowment for the Arts; $400 million for global warming research; $2 billion in child-care subsidies; $1 billion for Amtrak; and $252 billion in Medicaid payments, unemployment benefits, and food stamps. It’s truly a Democratic masterpiece. “Republicans should let them take all the credit.”
Republicans certainly don’t deserve any, said the Pittsburgh Post-Gazette. Corporations just shed another 75,000 jobs on top of the 2.6 million lost in 2008. Given that, “it should be easy for Republicans to accept Mr. Obama’s invitation to support the package and share credit” for saving jobs and homes. Instead, GOP leaders resort to “sniping” and arguing that the plan “should consist largely of tax cuts,” a notion so irresponsible it’s “astonishing.”
What the columnists said Are Republicans utterly “divorced from reality”? asked Bob Herbert in The New York Times. For eight years, they’ve insisted that the economy most benefits from tax cuts for the rich and letting giant corporations and fat cats do as they please. The result has been a complete collapse of the economy—and yet, they’re still clinging to their bankrupt ideology. “This is a party that, given a choice between Abraham Lincoln and Ronald Reagan, would choose Reagan in a heartbeat. Why is anyone still listening?”
Democrats have their own credibility problem, said GOP pollster David Winston in Roll Call. Democrats said their stimulus would be “timely, targeted, and temporary.” It fails on all counts. Most of the funds would be spent not by individuals but by government programs, which move at a snail’s pace. As for “targeted,” the money would be squandered on a vast array of Democratic constituencies, with little relationship to stimulus.
There is one sensible alternative, said Eamon Javers and Jim VandeHei in Politico.com. We could “do nothing.” It’s true that the economy is hurting, “but government stimulus packages have a long history of failure.” President Bush spent $168 billion last February and got little for it. Some economists on both the Left and Right say there’s a real chance that even $1 trillion in spending “might be too little, too late,” and will result only in more debt for our children to pay off. Sit tight, they recommend, and let the natural economic cycle play itself out.
What next? With job losses mounting, a new survey of economic forecasters perceived no economic turnaround on the horizon. Instead, the experts predicted the worst business climate since 1982. Under the circumstances, said Yale professor Robert J. Shiller in The Wall Street Journal, a turnaround ultimately depends on what John Maynard Keynes called the “animal spirits”—the confidence we have not only in markets but in one another. For any plan to succeed, it must be bold enough to “impact public confidence.”