I wrote earlier today about the need for the Federal Government to get a grip on state aid. Perhaps we are seeing a dim light at the end of a tunnel. The Wall Street Journal (subscription only) is reporting that aid to states will be included in a second economic stimulus bill of at least $50 billion:

The general consensus, among people including former Clinton administration officials Lawrence Summers and Alan S. Blinder, was that checks for individuals and additional government spending would help boost the economy, stem job loss and alleviate the pain of higher prices that people are paying for food and gas.

Thankfully Congress seems to finally be coming to terms with what we all have known for a long time now; that the health of the national economy is reliant on the health of the state economies. Speaker Pelosi brings home this point in getting into the finer points of what the bill will entail:

Along with rebates and spending on infrastructure projects, Ms. Pelosi said other possible proposals under consideration are help for states with their share of costs in the Medicaid health program for the poor. Some form of state aid is likely to be included, as Democrats said they are concerned that states, to balance their budgets, will cut programs or increase taxes in ways that would further slow the economy.

Newsflash, this has been happening for the last 5 months as states attempted to balance their budgets. The legislation isn't expected in the House until September, but I am thankful that Senator Reid and the Democratic leadership took the time to make sure the stimulus package would address the right needs. The question now is whether we should be saying "better late than never" or "too little too late."

As MollieBradford diaried here yesterday, Paul Krugman recently criticized Obama's recent stimulus package--characterizing it as "tilted to the right" and citing it as further evidence that Obama "really is less progressive than his rivals on domestic policy."

Krugman unfortunately only spends a single sentence setting forth the basis of these conclusions:

For example, the Obama plan appears to contain none of the alternative energy initiatives that are in both the Edwards and Clinton proposals, and emphasizes across-the-board tax cuts over both aid to the hardest-hit families and help for state and local governments.

I responded in the comment thread of that diary that Krugman's criticisms seemed inattentive to the narrowly defined purpose of these kinds of packages. Specifically, I wasn't persuaded that alternative energy initiatives belong in a stimulus package, given the fact that stimulus packages are typically designed to address immediate and temporary economic needs, as opposed to more farsighted objectives.

Today, I read economist Brad Delong's evaluation of the stimulus packages proposed by the respective candidates (For those who may not be familiar with Delong,  he is an economist at Berkeley and generally considered left-leaning). As my headline suggests, he disagrees with Krugman and expresses a preference for Obama's approach. Specifically, he writes:

The plan is clean: there is no place for lobbyists to hang ornaments on it--which means that quick passage is possible. The first $45 billion of checks could be cut and sent out with this April's tax refunds. It meets   Elmendorf and Furman's requirements that a fiscal stimulus be timely and temporary. It does not do so well on "targeted"--it doesn't do a great job at making sure the money gets to people who will spend it and thus boost aggregate demand--but this is at least partly offset by its simplicity, which is indeed essential if we are going to get the timely and the temporary right.

More in the extended entry.