Concern Over GOP Obstruction & Stimulus Proving To Be Correct
by bruh3, Thu Jan 15, 2009 at 10:57:14 AM EST
The other day, I wrote, a diary explaining my concerns over the stimulus package.
My concerns are twofold:
A) In lowballing the stimulus package, it looks like the stimulus will not be big enough when it makes it way through Congress in order to address the economic crisis. Obama's opening negotiation, as I feared, defined the range of the stimulus. This lowballed number was designed to obtain Obama's goal of having the GOP on board the stimulus. He wanted 80 votes. He won't get that.
There were competing theories advanced from mine. The most prominent by Nate Silver that the lowball stimulus was actually a strategy to get the Democrats on board. However, the problem with this is that the spending remains as I predicted low at $518.7 Bil after the Democratic imput. This, again, is negotiation 101.
My concern was that the spending would not be high enough given the make up of the Congress without Obama's leadership.
This appears to be the case.
The Democrats in Congress, for better or worse, are followers. Not leaders. Once Obama provided a number. It is no surprise that they did not veer far from it.
Krugman and others agree that the stimulus (which is over two years, not one) is not going to be enough to address the economic conditions this country faces. In fact, there is something of a consensus growing on this point.
It simply is not enough to create the number of jobs that Obama says he wants to create, and even if it does, it will not keep up with expected job loses from this economic downturn. We will not be moving ahead.
In fact, many of the line items that are critical to us building a sustaintable long term economic prosperity- e.g., new energy economy - aren't there in sufficient amount.
For the record, most of the world is already ahead of us on these issues. China and Europe , for example, are already significantly investing in these technologies. This week alone the American automakers were worried that foreign innovation would outstrip US innovation in building the next battery. A critical element in being competitive in the future. You may think this is a nonissue, but its critical for the new energy economy that we innovate in the area of battery development. To sustain the economy after the stimulus, we must be thinking of how to grow the economy. The new energy economy is clearly one smart way to do this since there is a huge growth potential in both domestic and foriegn markets.
However, I digress. I cite Krugman here for the broader discussion regarding recovery, but there are many others:
Nate Silvers theory that Obama was attempting some kind of Machivellian strategy to push the Democrats into doing much more than what Obama first offered is proving to be false.
Obama's Plan with Democratic input can be found in the following links:
Rather than a push back, we got a tweak. A tweak is not enough since there are other actors about walk onto the stage.
B) The only element that remains undefined is that of the GOP and Conservative Democrats since the liberal/progressive voices have spoken. This is a bad sign. The conservatives will almost certainly push this bill to the right.
Here's what Americablog quotes the GOP saying regarding the GOP's stance:
"Obama's stimulus package is on track to pass before the Presidents Day recess in mid-February. But it is increasingly doubtful that he will pick up the 80 Senate votes he had hoped to win in the first major legislative test of his presidency. Instead, the bill is likely to pass on the strength of the Democrats' majority.
Sen. John Thune (R-S.D.) said Wednesday that prospects for bipartisanship in the stimulus debate rapidly were eroding.
"The air is coming out of that balloon," Thune said. "To attract Republicans, they lose Democrats. It is a very difficult needle to thread. They are discovering that the goal [of an 80-vote majority] is unrealistic. He got so much push-back from his own people."
House Republican leaders have set up a working group to draft their own stimulus proposal focusing on permanent, across-the-board tax relief. And the Republican Study Committee, a group of about 100 conservative House Republicans, unveiled a bill Wednesday that contains a series of tax cuts, including reducing all personal income tax rates by 5% and cutting the corporate tax rate from 35% to 25%."
C) Thus, where are we right now?
We are left with a stimulus that will not be strong enough by the Democrats under Obama's leadership coming from the "left" and now the GOP will chime in with something from the right. There will be attempts to come to compromise. In other words, Obama's tweaked moderate compromise bill is now the new left, and the GOP will push for something to the right of that bill.
This is exactly as was my concern regarding negotation strategies. By moving the bill to the center as he saw it, Obama effectively had the Democratic Congress work from the center. They tweaked that center, but left it primarily in the center. By working from that center, he created a triangle in which the GOP/Conservative Democrats will push to move it further right than the already compromised proposal.
My point is simple: by not focusing on a strong position in the openning movemnet, Obama has harmed the ability of the economy to recover.
My prediction: We will almost certainly have another stimulus before the end of the year because this one is too small. Indeed, the time to have pushed for greater things to be done was now: "Among Democrats, liberals said they believe the massive package has enough for all different constituencies to win passage. Conservative Democrats, while alarmed at the spending, don't want to pick a fight with Obama immediately after he takes office and are looking for ways to support the bill. " http://thehill.com/leading-the-news/rep.-obey-not-sure-825b-stimulus-is-enough-2009-01-15.html But, given the opening negotiation, the likelihood of getting more seems lesser.Update [2009-1-15 19:33:40 by bruh3]: As if on cue, Ezra Klein posts this link to an article today about "Why Republicans Won't Oppose the Stimulus" http://www.thenation.com/blogs/jstreet/397443/why_republicans_won_t_oppose_the_stimulus The core take: "Here's my sense of their long-term strategy. This isn't based on anything other than observation and chatting around the Capitol. I think they'll let the stimulus pass and, indeed will be quite fine with it being very big. Much bigger than it is now: a trillion dollars or more. Because once the stimulus passes, Republicans are going to say: OK. We're done. Meaning: no more money. They'll point to the $700 billion for the TARP, plus the $1 trillion for the stimulus, and they'll say: we've spent all the money there is to be spent. There's no money for healthcare. There's no money for anything, really except the Pentagon. They'll run against deficits, waste and bailout nation." Thus they will attempt as I said to block any almost certanly necessary future action. The political capital that Obama has right now will not have fully been used. Instead, at a future date when the economy is quite possibly still in a meltdown, and Obama has been tied to the economic condition after his first stimulus has not had its desired effect, they will block those actions that he takes then because the theory is he will have less political capital to spin. This is speculation, but this is clearly part of their strategy. An ineffectual plan now, and thus a weakened Obama in a year or so.