Diary

The Big Stimulus That Won't

Barack Obama is physically headed back to the Capitol for the second time in his 6-day old Presidency. At this rate, he’ll have had more attendance in Congress than he did when serving as a Senator:

This week, the hard work of selling of the stimulus goes into high gear, as President Obama prepares to head to Capitol Hill on Tuesday to talk reluctant Republicans into getting behind the $825 billion economic rescue package.

“He wants to at the end of the day to go to the American public and say this is not the White House’s package, it’s not the Democrats’ package, it’s a bipartisan package,” Stuart Rothenberg, editor of The Rothenberg Political Report, told ABC News. “That frankly spreads some of the blame around if stuff doesn’t work and I think he’s willing to do that even if Republicans have to get some credit.”

He’ll need to be persuasive. Today, Republican leaders made it loud and clear they want a stimulus — just not this one.

“Right now, given the concerns that we have over the size of this package and all of the spending in this package, we don’t think it’s going to work,” House Republican Leader John Boehner, R-Ohio, told NBC. “And so if it’s the plan that I see today, put me down in the ‘no’ column.”

Indeed, while there may be one or two straglers, I would not be surprised if not a single House Republican supports the Stimulus package. It passed both the House Appropriations and Ways and Means Committee on party line votes. This is key. During GOP Control and the first two years of Demcratic Control, Appropriators have been the biggest spenders among the House Republicans. If not one of them will back the bill, you’ll have trouble finding any Republican to back it.

While I’m nervous about the cave-in possibility as happened with the bailout, which was supported by Minority Leaders Rep. John Boehner (R-Oh.) and Sen. Mitch McConnell (R-Ky.) among several other Republicans who should have known better. The difference between the $700 billion bailout and the Stimulus Bill is that there was some plan behind the $700 billion: Use $700 billion to unfreeze the Credit Markets by buying up bad debts. Then once the Housing market recovers, sell the bad debts at a profit.  It was a plan. Not a good one, but a plan. The Stimulus Package is no such thing. As described by David Brooks. David Brooks describes the Stimulus in the New York Times. Even dinner with “The One” couldn’t dull his criticism much:

But the stimulus bill emerging in the House of Representatives does neither of these things. The bill marked up Wednesday in the Appropriations Committee is a muddled mixture of short-term stimulus haste and long-term spending commitments. It is an unholy marriage that manages to combine the worst of each approach — rushed short-term planning with expensive long-term fiscal impact.

The bill has three essential failings. First, it lacks any strategic vision. This $825 billion bill has to be passed within weeks. There’s no time for fundamental rethinking or new approaches. Instead, there’s a sloppy profusion of 152 different appropriations — off-the-shelf ideas that mostly create costlier versions of the status quo.

The committee staff took the kernel of President Obama’s vision — infrastructure programs to create jobs — and surrounded it with an undisciplined sprawl of health, education, entitlement and other spending. There’s money for nurse training, Medicare, Head Start, boatyard support, home weatherization and so on. Eleven of the programs in the bill account for the vast majority of the actual job creation. The rest may be worthy or not, but they have little to do with stimulus. The total package is so diffuse, it costs $223,000 to create a single job…

But the stimulus bill emerging in the House of Representatives does neither of these things. The bill marked up Wednesday in the Appropriations Committee is a muddled mixture of short-term stimulus haste and long-term spending commitments. It is an unholy marriage that manages to combine the worst of each approach — rushed short-term planning with expensive long-term fiscal impact.

The bill has three essential failings. First, it lacks any strategic vision. This $825 billion bill has to be passed within weeks. There’s no time for fundamental rethinking or new approaches. Instead, there’s a sloppy profusion of 152 different appropriations — off-the-shelf ideas that mostly create costlier versions of the status quo.

The committee staff took the kernel of President Obama’s vision — infrastructure programs to create jobs — and surrounded it with an undisciplined sprawl of health, education, entitlement and other spending. There’s money for nurse training, Medicare, Head Start, boatyard support, home weatherization and so on. Eleven of the programs in the bill account for the vast majority of the actual job creation. The rest may be worthy or not, but they have little to do with stimulus. The total package is so diffuse, it costs $223,000 to create a single job.

While you may think a good deal of this fund is going to rebuidling America’s infrastructure which would spur job growth, you’d be wrong again. Only 3% of the Stimulus is going to pay for Infrastructure needs and much of that is hypertargeted.

What we have here is a stimulus bill that won’t stimulate. Even the tax cut portion of it is not written in a way that it will stimulate economic growth.

The reason Obama wants their support is for political cover if it doesn’t work, and it’s not going to work. The whole stimulus bill is only a pretext for more spending that won’t actually help the economy and it deserves defeated.