Update: The stimulus bill vote may occur today. View the live debate on CSPAN here.
In a Feb. 4 Newsweek article, Michael Hirsh argues that the debate over the stimulus reveals Obama needs “leadership,” the “lack of which is plaguing the Administration.” He also argues that the concern about the bill’s pork is a “stale, Republican-style debate,” irrelevant to the ongoing economic crisis. He writes on Feb. 4,
“Obama’s desire to begin a ‘post-partisan’ era may have backfired. In his eagerness to accommodate Republicans and listen to their ideas over the past week, he has allowed the GOP to turn the haggling over the stimulus package into a decidedly stale, Republican-style debate over pork, waste and overspending. This makes very little economic sense when you are in a major recession that only gets worse day by day.”
“Yes, there are still some very legitimate issues with a bill that’s supposed to be ‘temporary’ and ‘targeted’—among them, large increases in permanent entitlement spending, and a paucity of tax cuts that will prompt immediate spending,” he continued.
The Congressional Budget Office estimates that the majority of funds appropriated in the House bill won’t reach the economy until October 2009 or early 2010 because “some programs would receive funding that is significantly above (double, triple, or more) the amounts provided for existing or similar programs in recent years.” Lengthy bidding periods for contracts, seasonal challenges, and the delays between the receipt of funds and government outlays would each delay this “stimulating” effect.
“Even so, Obama has allowed Congress to grow embroiled in nitpicking over efficiency when the central debate should be about whether the package is big enough,” asserted Hirsh.
In his Inauguration Speech, at least, President Obama expressed an interest in promoting government efficiency and holding those who “manage the public’s dollars” to “account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.”
Obama also said that “The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified” (emphasis added).
500 thousand jobs—not “500 Million” as House Speaker Nancy Pelosi misstated—are being lost each month. Isn’t the question then whether the package will actually “stimulate” the economy like its crafters intend?
Isn’t another important question, then, whether the package uses money efficiently or wastes taxpayer’s precious dollars? This especially at a time when everyone is feeling the lack of funds in a very personal way.
Not everyone agrees that the package is worthwhile. Associated Press writer Andrew Taylor wrote on January 30 that “They call it ‘stimulus’ legislation, but the economic measures racing through Congress would devote tens of billions of dollars to causes that have little to do with jolting the country out of recession.” He continued,
“There’s $345 million for Agriculture Department computers, $650 million for TV converter boxes, $15 billion for college scholarships—worthy, perhaps, but not likely to put many Americans back to work quickly….
An $800 billion-plus package, it turns out, gives lawmakers plenty of opportunities to rid themselves of nagging headaches left over from the days when running up the government’s $10 trillion-plus debt was a bigger concern.”
Contrary to Hirsh’s assertion, opposition to the bill is weighted toward the Republican quarter, but not exclusively Republican.
On Monday, Representative Jim Cooper (D-Tenn.) told Liberado radio that “Well, I probably shouldn’t tell you this, but I actually got some quiet encouragement from the Obama folks for what I’m doing,” namely, voting against the bill. But on Wednesday, in an about face (and after considerable press), he stated that “At no point did any member of President Obama’s staff encourage me to vote against the House economic recovery bill.”
And the House vote on the bill did not split on strictly partisan lines: 11 democrats voted against the bill as well.
And over 50 House Democrats from the Blue Dog Coalition and New Democratic Coalition are in the process of collecting additional House signatures for a letter to Speaker Nancy Pelosi, as reported by the Hill on February 3. The letter criticizes house rules under Pelosi and the method by which the stimulus bill was crafted. The Hill provides excerpts.
“On the spending side, the stimulus package is full of well-intended items that, unfortunately, are not likely to do much for employment,” writes AEI Fellow Martin Feldstein for the Washington Post.
Even the New York Times, not known for its conservative leanings, is running the Senate-side rush to reform the bill as a “centrist” operation.
From NY Times author David Herszenhorn,
“The effort to trim back the program was being led by two centrist senators, Ben Nelson, Democrat of Nebraska, and Susan Collins, Republican of Maine, who say they would like to pare from $50 billion to $200 billion from the package. The final Senate vote on the stimulus package was expected late on Thursday.
“Among the initiatives that could be cut are $50 million for the National Endowment for the Arts, $14 million for cyber security research by the Homeland Security Department, $1 billion for the National Science Foundation, $400 million for research and prevention of sexually transmitted diseases, $850 million for Amtrak and $400 million for climate change research. But so far, none of the suggestions come close to being enough to shrink the package on the scale proposed.”
If significant revisions are made to a Senate bill which passes, the House and Senate will need to form and pass compromise legislation.
Hirsh doesn’t see wasteful spending as a problem—as long as we spend, spend, spend. He writes, that “When you are dealing with a stimulus of this size, there are going to be wasteful expenditures and boondoggles. There’s no way anyone can spend $800 to $900 billion quickly without waste and boondoggles. It comes with the Keynesian territory. This is an emergency; the normal rules do not apply.”
Over 200 economists assembled by the CATO Institute—including three nobel laureates—said otherwise.