600,000 Jobs Is A Small Price To Pay To Keep David Broder From Crying
According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.
Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.
My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.
The real question now is whether Obama will be able to come back for more once it’s clear that the plan is way inadequate. My guess is no. This is really, really bad.
Considering that you need 60 votes in the Senate to pass this bill and any future bill that raises the federal deficit (which a stimulus bill will inevitably do), it was always going to be like this. I'm not certain that if Obama didn't pre-compromise the bill, that the moderates and Republicans wouldn't have pushed it to exactly where it is now. I'm sympathetic to the notion to an extent, but considering 36 Republicans wanted the entire bill to be straight tax cuts, I think the moderates would have went there anyway. Where Obama broke down was not whipping the public up to support his plan from the get-go. The fact that the rhetorical war got away from him made it easier for the moderates to run wild. Even then, the awful media coverage was unlikely to improve, though at least Obama's point of view would have been represented.
I mean, you have Republicans who are calling a $780 billion dollar bill a $1 trillion dollar bill because they are calculating in the debt service on the borrowed money. Funny, I don't remember them doing that for appropriations on Iraq, for example. They were always going to oppose in the most extreme way possible, and considering how some of our "sensible centrists" on the Democratic side think, I just don't agree that there was going to be a good strategy here.
Senator Claire McCaskill:
"Proud we cut over 100 billion out of recov bill.Many Ds don't like it, but needed to be done.The silly stuff Rs keep talking about is OUT."
That silly stuff includes big reductions (relative to the House Bill) in food stamps, school construction, head start, and COBRA subsidies for people who have lost their jobs.
How Senator McCaskill is spending her day:
"Going to Museum of Am History today.Haven't been since it re-opened.Want to check it out.Also grocery store and later a movie date with Joe."
Hopefully she enjoys the museum. Amusingly, she also voted for the Coburn amendment which forbids the use of any of the stimulus money for, among other things, musems.
With moderate friends like these....
The state spending has to go back in, the AMT fix has to go back out. That gives it just the slightest chance to succeed.
...I do agree with this comment, for future reference:
My advice to Obama is to never pre-compromise with Republicans unless he negotiates with specific Republicans whose votes he secures at the same time. I have no problem with putting in compromises worked out with Spector and the women from Maine in return for their support, but you can't just put in stuff Republicans might go for.
I don't think Obama gets a lot out of the "moral authority" of saying he tried to compromise the bill at first. Republicans don't really care. They should be able to get changes in legislation, but only in exchange for support, not for a theory of what they might support.