America, Your Stimulus Package
I'm sorry, American Recovery and Reinvestment Plan.
In the next two weeks, the House will consider the American Recovery and Reinvestment Plan, which makes long-term investments that are worthy, needed, fully-screened, and based on merit, not politics. Developed with priorities shared by President-elect Obama, the plan will create or save 3 to 4 million American jobs, with an estimated 90 percent of the jobs created in the private sector—getting the American economy moving in the short term and making investments for a stronger economy in the long term. The Chairman’s mark (draft legislation) will be circulated and posted online later today and next week the Ways and Means Committee, Energy and Commerce Committee, and Appropriations Committee will mark-up the legislation.
The bill is actually up here, and if you don't speak Congress, a more readable report is here. The big takeaway is that we're up to an $825 billion dollar package, with 2/3 for investment and 1/3 for tax cuts. That's less than before, and the taxes are more focused on energy and middle-class tax relief than broad corporate cuts, but my sense is that's still a bit out of balance.
There are quite a bit of safeguards in the plan. It mandates no pet projects or earmarks (for now), with full transparency. In addition to Inspector General reviews, monthly reporting, whistleblower protections and competitive bidding, there will be a government website showing where all the stimulus money is headed, and the public will be able to oversee the spending. In addition, all the contracts will be going online, leading to this funny exchange:
ORSZAG: We plan to create a Web site that will contain information about the contracts and include PDFs or contracts themselves, and also financial information about the contracts.
LIEBERMAN: Define PDFs.
Chris Bowers has a very good rundown of where the spending is headed, and so does the aforementioned report from the Appropriations Committee. Practically every sector is going to be seeing a portion of this money, with major expenditures for health care, education, energy and the environment. There is unemployment relief and food stamp increases in the bill, which is good. There is a section called the "State Fiscal Stabilization Fund" that earmarks $79 billion to help the states. That too is good. But overall, this looks more like an omnibus appropriations bill than a targeted spending effort. That's not necessarily bad. But it has people like David Sirota upset.
The Post says the package "includes about $85 billion worth of infrastructure spending, most for highway and bridge construction." That's it - $85 billion in an $850 billion bill.
$85 billion for infrastructure in a nation that now regularly sees bridge collapses, steam pipe explosions, sink holes, dam failures, levee breaks and blackouts.
$85 billion at a time when Obama is demanding another $350 billion blank check for Wall Street.
$85 billion when the American Society of Civil Engineers says we need $1.6 trillion.
$85 billion in the same package that could include hundreds of billions of dollars in corporate tax cuts - many for the banks that created the economic mess. This, at a time when U.S. News & World Report notes that a new poll shows 81 percent of Americans are ready to pay higher taxes to fund significant infrastructure investments.
As Matt Yglesias notes, there is an error in thinking that the stimulus bill alone can solve our infrastructure problem - it can't, and we need to be thinking long-term about how we fund infrastructure (reforming the highway bill to get more money for transit and rail would be a good start). Also, flood control, a key infrastructure need, is included in the energy and environment spending, so there's some overlap here.
In general, this is decent but could be better, and given the drift already in the direction of more spending and less taxes, I would hope for that to continue. However, it's worth noting that everyone and his mother is going to be looking for a piece of the action here, and so "stimulus" could start to look a lot like "bailout" as it grows. Diligence is required.