Obama, Republicans and The Stimulus Bill

What have we had from Washington?

• House Republicans refuse to vote for the House Bill and majority of Senate Republicans stay away from the Senate's Bill.
  
• Both set of Republicans seem to complain that they were shut out of the negotiations, that their ideas were ignored, but fail to mention that the vast majority of their ideas were retreads from the Bush Administration.
• Obama still seeks bipartisan support for the plan.

Have we got a President who is too concerned with bipartisanship? Mr. Obama wrote the following as part of his editorial for The Washington Post, The Action Americans Need:

"This plan is more than a prescription for short-term spending -- it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care and education. And it's a strategy that will be implemented with unprecedented transparency and accountability, so Americans know where their tax dollars are going and how they are being spent.

In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive."

The Post's editorial writers then wrote The President Should Heed Calls for a More Focused Stimulus:

"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.

While Republicans want to keep tax cuts for the rich but not for the working class, Martin Feldstein wrote The Current Stimulus Plan: An $800 Billion Mistake:

"As a conservative economist, I might be expected to oppose a stimulus plan. In fact, on this page in October, I declared my support for a stimulus. But the fiscal package now before Congress needs to be thoroughly revised. In its current form, it does too little to raise national spending and employment. It would be better for the Senate to delay legislation for a month, or even two, if that's what it takes to produce a much better bill. We cannot afford an $800 billion mistake"

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Instead, the tax changes should focus on providing incentives to households and businesses to increase current spending. Why not a temporary refundable tax credit to households that purchase cars or other major consumer durables, analogous to the investment tax credit for businesses? Or a temporary tax credit for home improvements? In that way, the same total tax reduction could produce much more spending and employment.

Postponing the scheduled increase in the tax on dividends and capital gains would raise share prices, leading to increased consumer spending and, by lowering the cost of capital, more business investment.

On the spending side, the stimulus package is full of well-intended items that, unfortunately, are not likely to do much for employment. Computerizing the medical records of every American over the next five years is desirable, but it is not a cost-effective way to create jobs. Has anyone gone through the (long) list of proposed appropriations and asked how many jobs each would create per dollar of increased national debt?

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If rapid spending on things that need to be done is a criterion of choice, the plan should include higher defense outlays, including replacing and repairing supplies and equipment, needed after five years of fighting. The military can increase its level of procurement very rapidly. Yet the proposed spending plan includes less than $5 billion for defense, only about one-half of 1 percent of the total package.

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All new spending and tax changes should have explicit time limits that prevent ever-increasing additions to the national debt. Similarly, spending programs should not create political dynamics that will make them hard to end.

The problem with the current stimulus plan is not that it is too big but that it delivers too little extra employment and income for such a large fiscal deficit. It is worth taking the time to get it right.

The Senate passed a plan priced at $870 billion. Now off to conference committee. With Obama expected to campaign more forcefully for the plan in the next week.

E.J. Dionne thinks the President is losing the political/public relations battle over the stimulus. Rescue for the Stimulus:

"They have done so largely by focusing on minor bits of the stimulus that amount, as Obama said in at least two of his network interviews, to 'less than 1 percent of the overall package.' But Republicans have succeeded in defining the proposal by its least significant parts.
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Daschle's withdrawal as the nominee for secretary of health and human services poses a long-term challenge to the administration's ambitious health-care plans because the former Senate majority leader was so crucial to the White House's strategy. But the battering that the stimulus has taken is an immediate problem.

Although Obama aides dismiss the media coverage as 'cable chatter' important only inside the 'Washington echo chamber,' they acknowledge that Congress does its work inside that noisy hall and that the journalistic back-and-forth has tainted its key legislative objective. 'We didn't give it as much air cover last week as we should' have, said one top adviser. 'We lost a week.'"

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For most of the debate, Obama has cast himself as a benevolent referee overseeing a sprawling and untidy legislative process to which he would eventually bring order. He urged Democrats to knock out small spending measures that had caused public relations problems while doing little to defend the overall package or to reply to its Republican critics.

In the meantime, those critics have been relentless, often casting logic aside to reframe the debate from a practical concern over how to rescue the economy to an ideological dispute about government spending.

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And Republicans who in one breath say they want more tax cuts declare in the next that they are against the tax cuts Obama has proposed.

Sen. Jon Kyl of Arizona said of Obama's $500 refundable tax credit: "Calling a rebate to people who don't pay income taxes a tax cut doesn't make it a tax cut." Presumably Kyl doesn't consider as taxes the payroll taxes (or, for that matter, sales taxes) paid disproportionately by low- and middle-income Americans.

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Its hopes rest in part on a different form of bipartisanship. If Washington Republicans have decided to build a wall of opposition to the stimulus, Republican governors and mayors are eager for the money Obama wants to give them.

Thus will Obama and his allies be touting strong support for the stimulus from the Republican governors of California, Connecticut, Florida and Vermont. Mayors will be called upon to move House Republicans still open to persuasion.

Do not forget Indiana's Republican Governor's desire to spend the stimulus money, this from Nuvo Newsweekly's Statehouse update:

"Daniels said Indiana would get between $4 billion and $5 billion under the federal stimulus package the U.S. House passed Tuesday. That package gives the governor authority to decide how to spend much of those billions."


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But with unemployment rising rapidly, Daniels said it's critical the state be ready to spend stimulus dollars to create jobs as soon as it reaches the state's bank account. Daniels named roadway construction, clean water projects and weatherization as programs he'd direct stimulus money toward. 


According to the governor, the Indiana Department of Transportation is nailing down a list of already-planned projects, and will begin accepting bids on some of those projects as early as Monday. 



Paul Krugman wrote something similar to Dionne in his New York Times' column's On the Edge:

"So what should Mr. Obama do? Count me among those who think that the president made a big mistake in his initial approach, that his attempts to transcend partisanship ended up empowering politicians who take their marching orders from Rush Limbaugh. What matters now, however, is what he does next.

It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge."

As much as I respect Mr. Dionne's writing, I wonder if once again smarter people are missing the point of Obama? He plays his own game. He has the willfulness to impose his ideas and the mobility to move those ideas forward. Perhaps he sees a need to separate critics from mere obstructionists. Perhaps he sees the long term goal is of mitigating his critics and quarantining the obstructionists. Perhaps he sees that by highlighting the obstructionists, he can undercut the Republicans political support in next year's midterm elections? And maybe he has goofed? Who wants to bet?

With all that is going on with an incoming Administration, with all the messes left on the carpet by the departing Bush, could it be that our President knows the places and the points to put the pressure. Now we have seen what the Republicans offer us (nothing much, still denying reality), a President who appears not only reasonable but statesmanlike, and let us judge the plan by what is done between now and the time the bill reaches Obama's desk.

Obama and Limbaugh and the Stimulus

So Rush Limbaugh thinks the President is scared of him. Either the old blowhard has slipped into true megalomania or the meds have done permanent damage. Let us review something here: man whose father was a Kenyan immigrant wins Democratic Party nomination for President and then wins said Presidency. A mere radio show mouthpiece scares this guy? Rush is the comedian Keith Olbermann calls him.

Let us check out the wider world about all of this - or at least, The Washington Post's The Fix:

Is Rush Limbaugh the New Face of the GOP?:

"It's one week into President Obama's term and his arch nemesis isn't Senate Minority Leader Mitch McConnell (Ky.), House Minority Leader John Boehner (Ohio) or even one of the myriad candidates interested in challenging him in 2012.

It's conservative talk radio host Rush Limbaugh.

Limbaugh drew huge coverage in the days leading up to Obama's inauguration when he declared that he hoped the new president would fail -- part of a broader condemnation of liberalism in the country.

Obama upped the ante late last week when in a private meeting with Republicans he referenced Limbaugh's brand of politics as a big reason why major legislation hadn't been passed in years.

Then on Monday, White House press secretary Robert Gibbs offered another sly provocation of Limbaugh; asked to expand on Obama's comments about the talk show host, Gibbs demurred and then added: 'Tell [Rush] I said hi.'

Not surprisingly, Limbaugh took the bait. Of Obama, he said: 'He's obviously more frightened of me than he is Mitch McConnell. He's more frightened of me, then he is of say, John Boehner, which doesn't say much about our party.'"

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Whether Limbaugh continues to play as prominent a role as the GOP attack dog against Obama remains to be seen. If history is any guide, he will. Limbaugh -- along with former House Speaker Newt Gingrich (Ga.) -- is credited with leading the Republican revolt that brought about the 1994 wave election and his near-constant agitation against former President Bill Clinton is well-known.

Put simply: Limbaugh isn't going anywhere any time soon. And his voice -- and influence -- may well get stronger with the GOP out of power. Is that a good thing or a bad thing for Republicans? Time will tell.

How many times in the past year has Obama been underestimated but stayed on top? How often has the media and his opponents misapplied conventional wisdom to him? The least different thing about our President is his skin color. What makes him different - and interesting to me - is his ability to concentrate a not inconsiderable amount of intelligence and knowledge into a plan. he will screw up. He knows he will screw up and he has done as much as possible to mitigate his humanity with his choices for the cabinet and of his advisers. Do not underestimate the Lincoln interest that Obama has.

Glad to see Oliver Willis has the same idea here as me and writes much tighter post with his Above Limbaugh’s Game:

"...Like Rove, Rush is more hype than anything. And Limbaugh has not tangled with someone at President Obama’s level, not even Bill Clinton. At some point, we’re going to carve this into the White House lawn:"

So why pick on Limbaugh? Could it be to marginalize the Republican Party by making it the party that places its own ideology above the national interest? To make the Republicans look like the party that is high balling down a dead end? That Rush Limbaugh and his ilk (ah, there is a word I never thought to use) are the ones who directly profit from placing their partisan interests above the country's interests?

I read In the Agora's Purging Dissent is not the Answer as giving us an idea of what intelligent Republicans/Conservatives are thinking:

It's going to take a few years for the GOP brand to recover from too much power used too freely and for the Democratic brand to come down a peg from over-governing. Hang in there and have hope.

They still think the Right was right.

Willis's post lead me to Off The Grid and Rush Limbaugh Is Hot Under the Collar:

"The game the president is playing is to make a testy, easy-to-arouse, fun-to-rankle Rush come to stand for an odd-ball, tone-deaf, blowhard far right that the rest of the desperate-to-be-liked Republican Party will eagerly distance itself from (if Rush is trying to capitalize on the panty-waist demeanor of so many of his fellow Republicans, he’s also got to suspect that they’ll sell him out.)

Rush’s game is to try to stay in the game. To find some plausible way to characterize and ridicule the president, which will justify the $400 million what-were-they-thinking contract he signed with Clear Channel over the summer. The pressure is on."

If three of us can see this coming, I do not feel that I am imagining it all. The fun question now is: can Limbaugh stop his mouth without ruining his game?

This morning everyone should know the House passed the stimulus bill. If not here is House Passes Stimulus Plan Despite G.O.P. Opposition from The New York Times:

"But the size and substance of the stimulus package remain in dispute, as House Republicans argued that it tilted heavily toward new spending instead of tax cuts.

All but 11 Democrats voted for the plan, and 177 Republicans voted against it. The 244-to-188 vote came a day after Mr. Obama traveled to Capitol Hill to seek Republican backing, if not for the package then on other issues to come.

Mr. Obama, in a statement hailing the House passage of the plan, did not take note of the partisan divide but signaled that he expected changes to be made in the Senate that might attract support."

The House remains unruly (and does everyone recognize now why Rahm Emanuel is Chief of Staff). The Washington Post ran Democrats Among Stimulus Skeptics before the vote:

"Republican criticism of the stimulus package that the House will vote on tonight has focused on its soaring price tag, but some Democrats on Capitol Hill and other administration supporters are voicing a separate critique: that the plan may fall short in its broader goal of transforming the American economy over the long term."

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For some House Democrats, the problem is less a matter of balancing the short and long term than a shortage of focus and will on the part of the administration. Their disappointment centers on the relatively small amount devoted to long-lasting infrastructure investments in favor of spending on a long list of government programs. While each serves a purpose, the critics say, they add up to less than the sum of their parts, and fall far short of the transformative New Deal-like vision many of them had entertained.

Dana Milbank wrote about the Republicans in The Republicans Are Smiling, but They're Not Buying:

"Forecasts call for no more than 12 Republicans to vote for Obama's stimulus plan today, and 'it's closer to zero than 12,' said Rep. Fred Upton (Mich.), one of a dozen Republicans invited to meet with Obama staff chief Rahm Emanuel at the White House last night. Rep. Roy Blunt (Mo.) chuckled when asked whether Obama had won his vote. Rep. Dan Lungren (Calif.) laughed. Rep. Dan Burton (Ind.) guffawed.

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"Yes, we wrote the bill," House Speaker Nancy Pelosi (D-Calif.) said last week. "Yes, we won the election."

Sen. Chuck Grassley (Iowa), the top Republican on the Senate Finance Committee, was still smarting about that quotation when the committee gathered to consider the stimulus package yesterday morning. "This bill is not the result of the usual bipartisan negotiations," he protested, accusing Democrats of a secret "deal to vote down our amendments."

I would like to remind Representative Grassley what bipartisan negotiations looked like under Tom Delay and George W. Bush. Blue Indiana catches a bit of what it is like under Obama with Mark Souder, Mike Pence love President Barack Obama. Who appears reasonable and who remains looking narrow-minded, even selfish? Even Advance Indiana seems cranky about the bill.

This comes from The New York Times article I noted above:

As Senate Democrats prepare to bring their version of the package to the floor on Monday, House Democrats and the administration indicated they would ultimately accept a provision in the emerging Senate package that would adjust the alternative minimum tax to hold down many middle-class Americans’ income taxes for 2009. The provision was not in the House legislation.

Its cost would drive the overall package’s tally to nearly $900 billion. That would exceed the roughly $850 billion limit that Mr. Obama has set for Congress, House Democratic leadership aides said, and leave no room for other proposals that senators of both parties are poised to seek during Senate debate next week.

While the House and Senate measures are similar, they are most likely to differ in ways that could snarl negotiations between Democrats from the two chambers, and delay getting a measure to the president. In particular, House and Senate Democrats are split over how to divide $87 billion in relief to the states for Medicaid, with senators favoring a formula more beneficial to less-populous states.

Democrats’ own differences aside, they also are under pressure from the White House to be open to proposals from Senate Republicans who might support the final legislation if their interests are accommodated, and which might draw a few Republican supporters on a final vote next month in the House.

Back to Rush and his attacks on the stimulus package, I want to close with this from Paul Krugman's Bad Faith Economics:

"First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years."

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Finally, ignore anyone who tries to make something of the fact that the new administration’s chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.

It’s true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn’t, because we’re in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.

I know the Republicans never let facts or reality stand in the way of their lust for power but this being the Age of Obama, I have the audacity to hope.

So now we know what went wrong with the bailout

One word in The Washington Post's Geithner Preparing Overhaul Of Bailout explains what went wrong:

"That challenge is underscored by a report from a congressional oversight panel scheduled to be released today that hammers the outgoing Treasury Department for its handling of the financial rescue, including 'what appear to be significant gaps in Treasury's monitoring of the use of taxpayer money.' The report, moreover, faults the Treasury for failing to properly measure the success of the program or establish an overall strategy and skewers the department for not using any of the funds on foreclosure relief as Congress had directed."

Strategy requires a plan which then requires ideas. When has the Bush Administration shown any of these talents in any sphere other than in gaining power and using it for their cronies?

Which then raises a question about Congress - why did they expect anything better from Bush?

About The Stimulus Plan

I heard a bit last night about Rush Limbaugh challenging the President on his stimulus plan. What I hear is that Rush thinks the President is scared of him. Yeah, right. On one hand, we have a fat oaf who has not changed his scare tactics in thirty years. On the other hand, we have Obama. Let's face one fact about Obama: whenever we ever see whatever makes Obama scared we know we got a reason to be scared. Son of an African immigrant runs for President of the United States....this guy has no fear. Guy takes over from George W. Bush, and we better realize nothing daunts him. Limbaugh's drug use is showing. Or maybe it is a more natural megalomania.

Not that the stimulus plan does not have its problems for me. I am not sure if the House and Senate Democrats do not need to check out the definition of infrastructure. On the other hand, the Republicans say they are getting no input with a straight face - just like they claimed there were WMD and they were the party of fiscal responsibility. If anything the President and the Democrats have been more conciliatory towards the Republicans than the Republicans were ever to the Democrats during the last Administration.

Meanwhile, Paul Krugman blows apart the nonsense in his Bad Faith Economics:

"First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years."

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Finally, ignore anyone who tries to make something of the fact that the new administration’s chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.

It’s true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn’t, because we’re in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.

Better days ahead?

That seems to be the hope held out by the New York Times reviewer of The Second Civil War:

"Most evidence suggests that a majority of Americans remain relatively moderate and pragmatic. But many have lost interest, and confidence, in the political system and the government, leaving the most fervent party loyalists with greatly increased influence on the choice of candidates and policies."

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...Only under George W. Bush — through a combination of his control of both houses of Congress, his own inflexibility and the post-9/11 climate — did extreme partisanship manage to dominate the agenda. Given the apparent failure of this project, it seems unlikely that a new president, whether Democrat or Republican, will be able to recreate the dispiriting political world of the last seven years.

I say that depends on us. I say conservatism depends on fear: fear of change, fear of women being treated equally, fear of people from different religions or skin color. So long as we allow ourselves to be cowed, then the political operatives like Karl Rove will do what they have done - divide us up amongst ourselves for the political gain of their masters like George W. Bush.

Yesterday, I actually found myself liking a Robert Novak column. I am not sure what that means but my impression is that Novak has lost any enthusiasm for the Republican President:

For an hour on Tuesday, the Iraqi lawyers presented their pleas to Flood, who made no comment. Flood assured them that Fielding, but not necessarily the president, would see the letter. They then returned to the bus, which transported them to the Supreme Court. There, much to the Iraqis' surprise, they were given 45 minutes by Chief Justice John Roberts for a substantive discussion. "This was much better than the White House," exclaimed an Iraqi lawyer, who can only hope that President Bush gets interested in building the rule of law in Iraq.

How quaint: some people believeing that George W. Bush has an interest in the rule of law!

Yesterday, listening to the news on NPR, I heard the Army needs more troops. General Casey needs more troops because we do not have enough to cover any other military emergency that might crop up. Iraq and Afghanistan have swallowed our Army.

Last night, I caught Hardball and Tucker on MSNBC. Both shows emphasized the Congressional Democrats tying funds on Iraq to a withdrawal date and Bush thundering against any such limits on his playing warrior. The Republicans already started with their cliched chorus of any limits on the President means abandoning the troops. Bush abandoned our soldiers by dropping them into a fight with no goal, no strategy, no purpose other than his own self-aggrandizement. Bringing the American military does not mean that the troops have failed but will certainly spotlight the failure of George W. Bush both as President and as a man.

Charles Kauthammer uses the phrase rout in describing what he sees the result of the Democratic position. Pfui. Our fight was never in Iraq. Iraq was of George W. Bush's choosing, it was his fight. Our fight remains in Afghanistan. No one talks of leaving Afghanistan where Osama bin Laden looms over the border from Pakistan. No Democratic politician speaks of leaving off the hunt for bin Laden. Only George W. Bush lacks the attention span to hunt bin Laden. For Bush, bin Laden exists as a tool to scare us.

Bush wishes to pummel us with fear. Time for us to stop and move boldly forward with our better selves leading the way.

Ted Kennedy in the Washington Post

Senator Kennedy writes on the actions and accomplishments of the new Congress (well, mostly the Senate).

The balance of powers set forth in the Constitution is starting to work again. By far the strongest message from the election is that Americans want a change in Iraq. It is a tremendous challenge to get any administration -- especially one as stubborn as this one -- to change course during wartime. But Congress is now performing its constitutional role as a check on the executive. The administration is being asked the hard questions and being held accountable for its answers.