Senate Stimulus Insanity: A Time for Guts and Brains
Steve Novick
Seven years ago, Oregon's Congressional Democrats all had the guts and brains to vote against the war in Iraq. Let's hope that now they all have the guts and brains to vote against the deal that the Senate is considering on the stimulus package, and push their leaders and colleagues to come up with something better.
What have the so-called Senate "centrists" wrought? As the Christian Science Monitor reported:
Spending for the states and education took the biggest hit, compared with the House bill. State fiscal stabilization funding [much of which could have been used for schools] was cut back $40 billion, school construction dropped $16 billion, and a proposed $3.5 billion line for higher education construction was zeroed out.
Time reports that the deal also involves "shrinking Head Start and a program to make federal buildings more energy efficient."
One irony of the deal is that it comes on the heels of a front-page New York Times story on Japan's efforts to "stimulate" its way out of its 1990's recession a story explaining that according to economic analysts, the money spent on education was the most effective in promoting economic growth. According to the Times:
A 1998 report by the Japan Institute for Local Government, a nonprofit policy research group, found that every 1 trillion yen, or about $11.2 billion, spent on social services like care for the elderly and monthly pension payments added 1.64 trillion yen in growth. Financing for schools and education delivered an even bigger boost of 1.74 trillion yen, the report found.
But we don't need Japanese economists to tell us that the Senate is cutting exactly the wrong things. In November, dozens of economists around the country wrote to Congressional leadership about stimulus; the FIRST THING THEY MENTIONED is aid to state and local governments. Joseph Stiglitz, who headed Clinton's council of economic advisers, also listed it first, and Mark Zandi also highlighted aid to state and local governments in comments the NYT Economix blog solicited from them:
Joseph Stiglitz, professor at Columbia Business School and Nobel laureate: "Right now there's going to be a major shortfall in revenues for states on the order of a magnitude of $100 or $150 billion per year. This means they may cut back on expenditures, which would be like a negative multiplier and lead to a contraction in the economy. The first priority is making sure to fill in the hole, that shortfall in state and local money..."Mark Zandi, chief economist at Moody's Economy.com: "The package includes $300 billion in government spending and $200 billion in tax cuts. Government spending provides the largest economic bang for the buck, particularly infrastructure spending, as it immediately adds to output and jobs here in the U.S. Aid to state governments will also forestall immediate cuts in programs and jobs that states have to undertake to satisfy their balanced budget requirements."
And here's another thing: the VOTERS care about education too. Here's a recent Pew poll showing that education is in the second tier of voter concerns, behind jobs and the economy, but AHEAD of deficits and tax cuts, which is really what they are competing with in the stimulus.
Nancy Pelosi is on the right side here. She's said that "both Mr. Reid and the Obama administration were well aware of her views and concerns about cutting billions of dollars in proposed aid for education, for example." Oregon's Democrats belong on that side.
What are we worried about a Republican filibuster? Bring it on! Let teachers and parents and principals and economists and Governors deluge their Senators with calls begging them to do the right thing! Let these so-called "moderate" Republican Senators (and a few self-styled "moderate" Democrats) explain why hundreds of billions for banks, hundreds of billions for the war in Iraq, are just james dandy, but saving our schools from cuts, rebuilding schools first constructed in the first New Deal, helping college students facing huge increases in tuition oh, no! They'll cave.
As Paul Krugman and other economists keep warning, the biggest danger Congress faces is passing a too-small stimulus. If States and school districts are laying people off while the Federal government is trying to create jobs, we're not going to get very far. Krugman himself is apopleptic about the Senate plan, saying:
"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."
I'm counting on Jeff Merkley, Ron Wyden, Peter DeFazio, David Wu, Kurt Schrader and Earl Blumenauer to do the right thing. Merkley and Wyden should vote against the Senate bill. The House members should announce that they won't support anything that comes out of conference that doesn't restore aid to education. Progressive Democrats should force the Senate leadership to come back to a version closer to the House bill. And if the Republicans filibuster, give them holy hell.
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Feb 9, '09
So what's your answer to the filibuster, Steve? If a gang of four Repubs and Dems want to sabotage things, they can do it. All of this post is so much bloviating unless you have an answer to get past the filibuster.
Feb 9, '09
Amen. Not only should it be more balanced, it should be unbalanced to hurt the interests that got us here! Relative hurt, of course, in that they wouldn't be getting as much. I could use a little hurt like that about now.
Our new Senator to date gives me little hope your plea will be headed.
Feb 9, '09
That's Amen to the post, not Bill R.
12:41 p.m.
Feb 9, '09
Hell yes!
I'm deeply concerned that time is slipping away from us. But while the bill is still in the Senate then it makes sense to do it right. Delaying a few days more won't harm anything.
I admire, respect and understand why President Obama wanted to find consensus and went out of his way to try to be inclussive with Republicans. But ultimately that was as much about playing partisan politics with it as the recalcitrant GOPers and so-called centrists have been doing.
As Mac McFadden has been saying on PK, Senator Reid needs to do away with the idiotic "pro-forma" fillibuster and force Republicans to actually fillibuster so that America can see it and judge them accordingly.
12:44 p.m.
Feb 9, '09
Jiang, while I strongly empathize with your sentiments, I believe it would be a mistake to try to use the stimulus bill to penalize the interests who got us here. We need to go with what works and deal with politics elsewhere.
12:52 p.m.
Feb 9, '09
I think if the filibuster comes and the PR war rages on, Obama can beat the sheepish senators.
12:57 p.m.
Feb 9, '09
I think if the Republicans filibuster, we get people in their home states to scream at them until they cave. If they do not cave, at least we have made the political point that Republicans were the ones who decided not to help schools. The idea that you just roll over whenever the Republicans say 'filibuster' is absurd.
Feb 9, '09
It's time to show those turkeys in the Senate no mercy - screw bipartisanship! ;/.
1:09 p.m.
Feb 9, '09
Not only should the Oregon delegation push for the most effective stimulus possible -- including investment in energy efficiency, Head Start, and other education initiatives -- they should know that many Republican governors like Crist, Daniels, and Rell actually support this critical assistance for the states. As a few polls have shown today, there's a big difference in how this debate is being perceived in and out of Washington. Outside the beltway in regions where Republicans have actual governing responsibility, many Republican governors want to see a bill more closely in line with the House version.
1:14 p.m.
Feb 9, '09
The idea that you just roll over whenever the Republicans say 'filibuster' is absurd.
Your "amen chorus" is growing, Steve. Jane Hamsher puts it well:
Feb 9, '09
Steve, your answer to the filibuster doesn't fly. The truth is, Obama and his administration will be blamed if he can't get a bill passed and can't do something to end grid lock in Washington, and the Republicans will get credit for sticking to their fictional principles. What you are advocating is bad politics, turning Democrats on each other, and feeding the impression of failure on the part of the Obama administration. It would be better politics to bring the governors to Washington and the stakeholders who are facing massive cutbacks in education and medicaid and make this a separate bill. I see this as just throwing stones at our own allies rather than building alliances around an effective strategy. But this seems to be the way of left wing blogs, throwing stones and standing on self righteousness. Doesn't accomplish a thing and merely divides coalitions. Attacking Obama and the senate does nothing but aid Rush Limbaugh.
1:30 p.m.
Feb 9, '09
Attacking Obama? Obama himself is campaigning to restore the education cuts!
Feb 9, '09
Amen, Steve. In Portland and around the state school districts are facing massive shortfalls not just in the upcoming biennium but in this year's budget. The House version's emergency stabilization $ would have been our lifeline. We've got to put pressure on our delegation to get that money back to keep our schools and thus our local economies from imploding. (Fact: Portland Public Schools is the state's 12th largest employer.)
We also need to fight to get the school construction money back in the stimulus bill. In Portland alone, we have $273 million in "shovel ready" school improvement projects that would create over 4,000 jobs for an array of building trades. This is real stimulus!
I hope folks can take a minute to call Wyden, Merkley, and their Rep to push for these key pieces in the final version of the bill.
1:47 p.m.
Feb 9, '09
If the Republicans want to filibuster, fine. At least make them stay up all night talking. Let's actually see a filibuster - rather than allowing the mere threat of a filibuster to stall things.
And then, once we're 24-36 hours into their obstructionist filibuster, I'm quite confident the American people will start demanding that they stand down. (Especially once Obama's 13-15 million email list kicks into gear.)
1:53 p.m.
Feb 9, '09
I'm just not convinced that the swing voters of America would really reward either side for this kind of political brinkmanship. Clearly the cuts in the bill have damaged its overall economic effectiveness. However as it stands right now, the public sees Barack Obama as being far more accommodating to the GOP than the reverse - and that's a good thing.
Remember, this is only money. We can go back a second time when the true depths of the GOP depression really start to sink in with the public.
Feb 9, '09
What you are advocating is bad politics, turning Democrats on each other, and feeding the impression of failure on the part of the Obama administration.
Well, not sure about that, but trashing the new administration is certainly popular on left blogs. And like it or not, nobody can truthfully say that Steve Novick hasn't done his own fair share of trashing his Democratic competitors.
If the Republicans want to filibuster, fine. At least make them stay up all night talking. Let's actually see a filibuster - rather than allowing the mere threat of a filibuster to stall things. And then, once we're 24-36 hours into their obstructionist filibuster, I'm quite confident the American people will start demanding that they stand down. (Especially once Obama's 13-15 million email list kicks into gear.)
Yes. "GO AHEAD, MAKE MY DAY."
Feb 9, '09
The obvious solution to legitimate RP criticisms that the Obama non-stimulus package cannot be paid for except by indebting future generations is to announce a tax on speculation (like what we had for most of our history): The Feasibility of a Unilateral Speculation Tax in the United States.
Furthermore, "Make Wall Street pay for its own bailout, by implementing a securities speculation tax, starting with derivatives..."
Of course, this is one of many sane ideas promoted by non-corporate, i.e., non-DP/RP, politicians during the last election campaign, so naturally it will be marginalized.
2:12 p.m.
Feb 9, '09
Just for amusement purposes, Joe Lieberman is calling for the "centrists" who foisted these ridiculous cuts on the bill to receive the Congressional Medal of Honor.
2:14 p.m.
Feb 9, '09
Actually I could get onboard a speculation tax as long as it's modest, as the GPF piece advocates.
Feb 9, '09
Remember, this is only money. We can go back a second time when the true depths of the GOP depression really start to sink in with the public.
True - except that by then, with schools for example, the damage will already have been done thru layoffs and/or a shorter school year. Why let the Senate R's hold us hostage and force even worse fiscal damage than we are already facing? Unless there is a way to do a second bill within the next week or so. Salem is looking at cutting THIS year's schools budget as well as massive cuts for next year. We need stimulus $ now so there is time for it to reach us and provide a lifeline in this year's budget.
2:15 p.m.
Feb 9, '09
while i would love to see the Rs beaten to a pulp by a victorious Obama, that's too much of the old way of doing things. the biggest problem with Obama's "new" way (which is not not not bipartisan or even postpartisan; it's inclusivity, which in political words is another word for democracy) is that it depends on those who oppose the majority to act in good faith. he has made clear from the beginning that those who do so will have a voice in policy. the Rs in the House should get no voice, nor should McConnell et al. the trouble is that 3 Rs have acted in a way that is difficult to call bad faith.
Americans want 2 things right now that are going to be very difficult to deliver together. 1, a decent stimulus package. 2, a new way of doing business in DC. #2 is trumping #1 right now, which is why Obama is out on the campaign trail. rouse enough popular support and he (and the Dem leaders in Congers) can tell the Rs to suck it. but if he delivers #1 at the expense of #2, then long-term: big problems.
since the Congress does not disband after the stimulus package is passed, i'm not sure we should be wailing and rending our garments over this. there will be more chances to fund necessary things throughout the year; once Franken is seated, that will make it easier to get such leg thru. but one of the problems we now face is that everything is broken and effed-up, there really are no good options. just the least shitty ones that can be done this week. next week on to the next shit pile.
2:17 p.m.
Feb 9, '09
In fairness to Lieberman, what he's doing there is trying to give political cover to Snowe et al for having bucked the GOP.
2:28 p.m.
Feb 9, '09
Exactly right, Steve!
I'm further concerned that even the House stimulus bill does not have enough funding to fill all the holes in state supported services. And, we need to make sure some funds fill the revenue holes in state supported services during the remainder of this biennium, the next five months, when a stimulus is needed most. I've called for "No" votes on my own blog here.
2:35 p.m.
Feb 9, '09
Obama could say: this is shaping up as a replay of 1993, when Bill Clinton pushed through legislation to help the economy and every Republican voted no. But you know what? It worked. The economy got better. I have worked hard to reach out to Republicans. But if they are determined to vote "no" on everything any Democratic President proposes, there's nothing I can do about that.
Feb 9, '09
"The truth is, Obama and his administration will be blamed if he can't get a bill passed and can't do something to end grid lock in Washington"
Actually, right now the Republicons are taking the heat from the public.
See here
Feb 9, '09
Good commentary….. I just came across a very helpful website on the current economic downturn and employment: http://www.recessioninfocenter.com
Feb 9, '09
Great cartoon about Repulicons here
Feb 9, '09
I wouldn't care about a filibuster either, if you have a good case.
SLicing education doesn't make sen, but a sepdning bill this big invites all kinds of weird deal-making which is what it so dismaying about the effort.
If they had a bit more clear-cut goal than, oh say, single-handedly saving humanity by raining down money they might have more credibility. FOr example, if they wanted to revive house sales, then give a tax credit for anyone buying a house this year. If they want to bump manufacturing, then let everyone who buys capital eqpt this year expense it instead of depreciating it.
However, this thing is turning into everyone's pet project being crucial to the success of the stimulus program. So for every vote we just tack on another $500M? Maybe the Repubs are waiting for their vote to be bought also.
Feb 9, '09
There's one angle that doesn't get appreciated a lot, in school funding, and I hope provision is made for it in this bill. Many commercial businesses have charities on the side, like programs for schools. This is easy to do if you can rationalize that your business has an educational function . It's good business because you get your product in front of future consumers.
Since many proprietors are people of faith, they already do this with their local churches whenever possible. Grateful parishioners can then give to the educational charity. Every time the money moves, it is a tax right-off. I work at Wright-Patterson AFB, so I can get another wack by giving to the business' charity as a payroll deduction. By having an extended community that is not actually a part of any of the entities, per se, you can generate all kinds of neutral (but good adverts) transfers, always reducing the tax burden.
This is good for everbody, and if there's going to be a lot of pork in every funding bill, then you should couple tax cuts for business.
Feb 9, '09
Great post, Steve, but what's with this begging stuff?
What are we worried about a Republican filibuster? Bring it on! Let teachers and parents and principals and economists and Governors deluge their Senators with calls begging them to do the right thing!
The people should DEMAND that their senators and representatives do the right thing; that is, what responsible economists recommend - not what party ideologues push for. And it's time the Democrats stood up instead of wimping out with some excuse about having to compromise to get something. Polls are showing a majority of the American people recognize the Republicans are playing politics - already running for re-election in 2010 - and they are not buying it. So the stimulus package goes down this week. Then the majority of people will rightly blame the Republicans and will increase as others face facts. Let the people rise up and shout. The revolution is long overdue.
Feb 9, '09
If the Senate version of the bill prevails, it's not going to do enough to stimulate the economy and the recession will still be with us in November, 2010. The Republicans will be crying that all that deficit spending didn't work (when actually, there wasn't enough spending). They'll club the Democrats with the economy and maybe convince enough people that the answer is more tax cutting to win back seats they lost the past couple of elections.
My strategy would be for Wyden and Merkley to speak to the bill's deficiencies but vote for it while supporting the restoration of the aid to states, Amtrak, etc. in the conference committee. All the members of the House have to hang tough and insist these spending priorities stay in.
Feb 9, '09
I hope like hell the repubicans do filibuster the Bill. It does have too much pork in it. Granted we need the education part for long term recovery but it needs to put more to work and it doesn't have that hallmark.
Feb 9, '09
The current proposed stimulus bill is a good thing? Is that the prevailing thought among those who define themselves as progressives? Though I'd probably be labeled best as a socially liberal Libertarian type, I cant see for the life of me how anybody could view this monstrosity of a bill as a good thing. Sure, most Republicans motivation for banding against it is largely cynical for political purposes but my bet is they'll be proven correct for taking that stance 2 to 4 years from now. We can argue the merits of the new deal all day long, but this aint it folks. This so-called stimulus package is a poorly conceived abortion with a huge price tag. Please skim the damn thing before glomming on with partisan fervor.
Feb 9, '09
The right thing to do on this stimulus bill is ABSOLUTELY NOTHING. Stop the madness, stop setting up our children for even more debt piled on top of an already bloated SS and entitlement to aging population that will grow MUCH LARGER when Boomer's hang it up.
Create a bad bank, buy up toxic assets and let the markets recover.
I don't want to live in United States of France.
Obama didn't win election on a mandate to spend a trillion dollars.
11:55 p.m.
Feb 9, '09
I don't want to live in United States of France.
Why not? France is pretty cool.
Obama didn't win election on a mandate to spend a trillion dollars.
Yeah, neither did George Bush.
Feb 10, '09
" Progressive Democrats should force the Senate leadership to come back to a version closer to the House bill. And if the Republicans filibuster, give them holy hell."
Exactly.
7:46 a.m.
Feb 10, '09
One of the ironies of Obama's return to the "given 'em hell" rhetoric he unleashed in the last day or two to help keep up pressure on the Senate to pass the stimulus bill is that it may well be undermined by today's pending unveiling of the new TARP and bank bailout plan by Treasury Secretary Geithner.
The New York Times reports that Geithner and Summers have won out in internal White House debates on the shape of the plan - and that it's shaping up as much more toothless in reining in the banks & financial services sector than it should have been. So having finally gone outside of DC to tap into public angst and outrage to mobilize support for the stimulus, the Oministration now risks dampening that energy by caving to Wall Street. Very frustrating..
Feb 10, '09
There's no replacement for not having 60 votes if you want to get something done. I don't see anything here that changes that reality unless Democrats want to eliminate the nuclear option. So all of this self righteous steam and trashing Democrats is simply more division and doing Rush Limbaugh's dirty work. Left blogs are increasingly intent on marginalizing themselves to the point no Democratic candidate is going to want to be associated with Blue Oregon, Daily Kos, Open Left, or any of the other rock throwers and sowers of division. Unless and until people like Steve Novick recognize how to advocate for something without running down potential allies, this place is going to be relegated to the trash-talk peanut gallery, the repository of personal bitterness.
Feb 10, '09
Unless and until people like Steve Novick recognize how to advocate for something without running down potential allies,...
What allies? The Republicans are clearly working on the 2010 election and have little interest in helping Obama be successful. For the Republicans, "compromise" has been for years and continues to be defined as, "You do what we want."
Eugene Robinson recommends Slam the Door on Compromise
Feb 10, '09
Most of us non-elites are opposed to the non-stimulus package for a very simple reason: We know that the elites who have made policy to this point cannot be trusted. The Bush-Obama bailouts for the rich have not only failed to prevent the economic collapse that many predicted, but they have served to increase the concentration of wealth in the hands of the few.
If it is too big to fail, then it is too big to exist. Corporate America must now be broken up into bite size pieces before it eats the rest of us.
Feb 10, '09
The Bush-Obama bailouts for the rich have not only failed to prevent the economic collapse that many predicted, but they have served to increase the concentration of wealth in the hands of the few.
Thanks in part to Robert Rubin, Larry Summers and Timothy Geithner who were key players in deregulation of Wall Street in the Clinton Administration and are not key players in the Obama Administration.
Feb 10, '09
I don't want to live in United States of France.
You're absolutely right. The French health-care system, their mass transit, their high-speed trains, their fabulous highway system, their parental leave: all those just make citizens dependents of the state. Far better to keep the non-wealthy scared and docile.
Feb 10, '09
Thanks in part to Robert Rubin, Larry Summers and Timothy Geithner who were key players in deregulation of Wall Street in the Clinton Administration and are not key players in the Obama Administration.
That should have been "are NOW key players in the Obama Administration."
Feb 10, '09
Left blogs are increasingly intent on marginalizing themselves to the point no Democratic candidate is going to want to be associated with Blue Oregon, Daily Kos, Open Left, or any of the other rock throwers and sowers of division.
So many sheep to be slaughtered, so little time.
Thanks for your help with that Bill R.
Doing the right thing is always the right thing to do. Standing up for what you believe rather than letting yourself be forever bullied is the right thing.
Bill R. is the worst kind of Democrat: The Enabler.
Feb 11, '09
Pork is for Senators to care about. The American people don't care about pork!
Feb 11, '09
The Tide is high and we're rolling on!
You too, Joel. Awesome. Sorry, Bill. It's so true.
Feb 11, '09
It's time to get rid of the House. Pelosi rolled over like a narcoleptic poodle and virtually none of the House provisions/amounts made it into the final bill. It's effectively as if there were only a Senate. Yeah, it's about parties and personalities and external contingencies... It's about class, as always. Let the people yell and then tell 'em what they're gettin'.
The House is too costly for these results. If we have to choose between Pelosi and DeLay, maybe exterminating the institution is the best course.
Feb 11, '09
Obama didn't win election on a mandate to spend a trillion dollars.
He will, and there's nothing you can do about it. How's it feel? That's been the Administration's answer to everything for 8 years.
Primates are disgusting.
Feb 12, '09
I loved:
"Pelosi rolled over like a narcoleptic poodle..."
and:
"So many sheep to be slaughtered, so little time."
A time for cuts and drains.
Feb 12, '09
Posted by: Harry Kershner | Feb 12, 2009 2:54:04 PM
I loved:
"Pelosi rolled over like a narcoleptic poodle..."
It's definitely the only mental imagery that can account for looking all tough and coming out with nothing. I've not seen a narcoleptic poodle, but I've seen a narcoleptic beagle, and, compared to other narcoleptic mammals, the distinguishing feature is the way they'll be going along all dog-like, and just fall over. They lay there for a few minutes, then jump up like nothing happened. It is brilliant imagery to account for her before and after press conferences and what must have happened in between. Not bad, kid.
Feb 15, '09
Republicans fear revenue sharing more than anything because it blows their game plan.
Starve the essential services provided by States. Force the Dems to raise taxes to pay teachers and fill the pot holes then attack the tax and spend Democrats.
<h2>The latest twist to the stimulus stall is to keep the public spending pared down to where, like Krugman fears, it will be too little too late. If the numbers continue to decline then Republicans will say Obama owns the Great Depression II.</h2>