Senate Passage

61-37, as John Cornyn bothers to show up to vote against poor people and children this time. The final price tag is $838 billion, because an amendment limiting bonuses for TARP recipients will actually cost the government $11 billion in tax revenue.

Now we're on to the House-Senate conference. You can see the differences between the House and Senate bills here. I think I've pretty well laid out the bill of particulars. The non-stimulative tax cuts to those in the upper portions of the income range should be jettisoned, and the assistance to state and local governments and some other worthy notables should be restored. Elena Schor reports that the school construction funding - totally eliminated by the Axis of Centrists - could return (Ezra thinks, only half-joking, that it's some kabuki game to get Republicans to vote against schools for kids before the funds are restored in conference, so they can use that vote in the next election). And there are the inevitable lobbying minefields - it's completely indefensible for the drug industry to want to eliminate comparative medical study from the bill, one of the most effective cost-control measures you can think of (comparing treatments and getting rid of the ones that don't work as well is a no-brainer), in an attempt to keep a medical-device bubble inflated.

I'm hopeful that we'll get at least a partial restoration in conference. Kevin Drum says the size of the bill is not as important as some are making it out to be:

The original bill totaled about $800 billion, and according to CBO estimates the amount of stimulus (spending + tax cuts) provided by the bill over the next two-and-a-half fiscal years would have been about $700 billion. This, we're told, would help create about 3 million jobs. The bigger Senate bill would have added $100 billion to that, and the current Nelson/Collins bill gets us roughly back to the original amount.

But stimulus isn't restricted to bills labeled "stimulus." Any deficit spending counts, and there's a ton of that already in the budget. Not counting TARP and bailout money (since it doesn't necessarily stimulate consumption), CBO estimates that the federal deficit this year will come to about $800 billion. If we assume the same next year and maybe half as much the year after, that's a total deficit-driven stimulus of about $2 trillion. Presumably this creates jobs at the same rate as spending in the stimulus bill, so that amounts to something in the neighborhood of 9 million jobs.

So: With the cut, total fiscal stimulus over the three years starting last October comes to $2.7 trillion and 12 million jobs. If we had kept spending at its higher level, it would have come to $2.8 trillion and perhaps 12.5 million jobs. That's a difference of about 3%.

I'm not sure this is the best way to look at it. The goal is to make up for a $1 trillion dollar annual shortfall. The normal appropriations may be deficit spending, but that is a cause of reduced employment and tax revenue. So are they really "stimulus"? It's a chicken-or-the-egg question to me. In addition, normal appropriations save the jobs in various agencies, but as they are not additional spending they don't exactly create any. This looks to me like fun with numbers.

The larger point is that even a really big stimulus package was going to be hard-pressed to lift the entire economy out of the ruin in which we find ourselves. James Galbraith said today on Democracy Now that the package depends on a proper resolution to the financial crisis, which he doesn't think is forthcoming considering the garbage that Tim Geithner laid out today.

So we need to fight for those additional funds, but I'm starting to wonder whether or not it matters.

...the Senate conferees are the chairmen and ranking members of the relevant committees, Senators Inouye, Baucus, Cochran and Grassley, along with Harry Reid. Specter and Collins and Snowe were denied the ability to be in the room by their own leadership, and this actually increases the possibility of restoring funds. It also increases the possibility that Collins, Specter or Snowe could bolt from the final deal because they aren't in on the final changes. It's a tightrope.