The Economic Stimulus: Devil's in the details

Investment, investment, investment has got to be the central focus: energy, roads, bridges, waterways, housing. Job creation is Job One. -- Sen. Kent Conrad, chairman of the Senate budget committee.

Comes as a relief to see some pushback from Congressional Democrats on Obama's plan to juice the economy (see, Senate Allies Fault Obama on Stimulus, NYTimes 2009-01-09):
President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.

Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.
Sounding like Henry Paulson, the P.-E. is trying to hustle his economic package through the legislature without due deliberation, warning that the recession “could linger for years” if Congress doesn't pass his plan within weeks, as if a problem that grew across three decades of deregulation and neglect will become more intractable if not addressed in a month.

For anyone scratching his head over the need for tax cuts at a time when the country is already suffering its worst deficit in history, it's reassuring that at least some of the Democratic leadership is prepared to spend the time necessary to think things through before taking action. Among other benefits, a more deliberate process will be likelier to thwart conservatives' intentions to use the crisis to help the corporate class with tax cuts and deregulation.

Half the swag originally delivered to Paulson is still unspent, and the first order of business for the new Congress ought to include deciding how it should be allocated. It can't be left to Obama's team of Wall Street refugees to decide whether the second $350 billion goes to helping working families with credit for essentials like mortgages, car payments and loans for education, rescuing those facing foreclosures, keeping small businesses afloat, assisting city and state governments to avoid killing off capital projects and laying off tens of thousands of employees, or other efforts.

At the moment, Obama's recovery outline calls for spending as much as $775 billion over the next two years, on top of what has already been doled out to no apparent effect. While some support will apparently go to investment in clean energy and other new technologies, if the intention is to inject money into the economy by creating jobs, the most obvious place to start is with rebuilding an infrastructure -- roads, bridges, schools, public housing, medical facilities -- that has been in decline since the Nixon years.

It's mildly amusing to witness the belated concern of Republicans and moderate Democrats about high spending and big deficits, but the majority can't expect to placate them and achieve real change. If the conservatives won't support economic reform without being bribed by tax breaks and deregulation, moderates and progressives need to proceed without them. Carter, Reagan, Bush, Clinton, Bush...Enough is enough.

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