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Stimulus Talk

The presidential motorcade wended its way to suburban Virginia this morning, stopping at the construction site for the final segment of the Fairfax County Parkway so President Obama could make a pitch for infrastructure spending.

"Look around us," Obama said. "Look at this construction site right where we're standing. We're surrounded by unmet needs and unfinished business -- in our schools, in our roads, in the systems we employ to treat the sick, in the energy we use to power our homes. And that's the core of my plan: putting people to work doing the work that America needs done.

"We're here today because there's a lot of work that needs to be done on our nation's congested roads and highways, crumbling bridges and levees, and crowded trains and transit systems. Because we know that with investment, we can create transportation and communications systems ready for the demands of the 21st century -- and because we also know what happens when we fail to make those investments."

Meanwhile, White House and Congressional negotiators worked furiously to resolve differences between the House and Senate stimulus packages.

David M. Herszenhorn and Jeff Zeleny write in the New York Times: "Congressional leaders moved quickly into intense negotiations with the Obama administration on Tuesday after the Senate voted to approve an $838 billion economic stimulus plan, and officials said the talks were on a fast track to finish the legislation perhaps by the end of this week.

"In a sign of their determination to reconcile the differences between the Senate bill and the $820 billion House version swiftly, the White House chief of staff, Rahm Emanuel, and the budget director, Peter R. Orszag, huddled at the Capitol on Tuesday evening with Speaker Nancy Pelosi; the Senate majority leader, Harry Reid of Nevada; and other lawmakers....

"Administration officials said that one priority would be to restore Mr. Obama’s middle-class tax cut to its original size. The Senate, trying to lower the cost of the plan, had trimmed it by more than $2 billion."

Greg Hitt and Jonathan Weisman write in the Wall Street Journal: "The White House is seeking to restore funding cut by the Senate for schools, health insurance and computerizing health records as the economic-stimulus plan headed into a final round of negotiations in Congress, with top lawmakers struggling to bring the price of the two-year package down to $800 billion....

"As lawmakers meet to reconcile the House and Senate versions of the legislation, the White House's effort to reshape it is leading to skirmishes among House and Senate Democrats, as well as with the moderate Republicans and Democrats who pushed to cut the size of the original Senate package....

"To make room for added spending, the White House, joined by House Democratic leaders, is pressing to scale back certain Senate-passed tax breaks, including measures intended to boost auto and home sales.

"White House officials said they can hold on to support for the package, even if spending is increased as a share of the total plan. 'We don't think it's that precarious,' one administration official said."

But David S. Broder writes in The Washington Post that Vice President Biden yesterday "signaled that the administration may try again this week to make the bill more palatable to at least some in the GOP."

James Oliphant writes in the Los Angeles Times: "Once a final deal is struck, the bill has to pass both houses of Congress again. That means that the legislation must satisfy a variety of voting blocs: the moderate Republicans in the Senate who broke with the party to ensure the bill's passage, the conservative Democrats in the House who may favor elements of the Senate bill, and more liberal members of the House who don't want to see the bill's commitments to funding for state budgets and education sacrificed."

The Washington Post's Michael D. Shear and Anne E. Kornblut address Obama's use of a straw-man argument. (See this post from yesterday.)

"President Obama likes to portray the battle over the economic stimulus package that passed the Senate on Tuesday as a stark choice between his approach and that of those who would 'do nothing.'" Shear and Kornblut write.

"But in truth, few of those involved in the stimulus debate are suggesting that the government should not take action to aid the cratering economy.

"Many of the president's fiercest congressional critics support a stimulus package of similar size but think it should be built around a much higher proportion of tax cuts than new spending. Others have called for a plan that is half the size of the one headed for a House-Senate conference -- still massive by historical standards."

That said, Obama is on much safer ground saying that, practically speaking, the choice in Washington has come down to one between passage of his plan and doing nothing -- at least for now.

And in his interview with ABC News's Terry Moran yesterday, Obama more specifically addressed the critics of his stimulus plan -- calling their arguments incoherent and petty.

"You've got some folks who say, 'well, it doesn't spend out fast enough. That's why it's not stimulative. But by the way, we'd like to see more infrastructure spending.' Well, it turns out that infrastructure spending provides terrific stimulus to an economy but most infrastructure projects may take three, four, five years to move forward.

"There's some folks who complain that, you know, things like investing in energy efficiency for federal buildings or automobile fleets is a, you know, government program. Well, actually, there's no reason why if you're creating jobs, we might not as well save taxpayers $2 billion in potential energy costs every year....

"So some of these arguments just haven't been real coherent. And you know, where there are good ideas for very effective job creation, I've adopted them....

"But most of -- for the most part, they haven't really been making those arguments. What they've been doing is picking the 1 or 2 percent of the entire package that fell in the category of policy and then just going after that, ignoring the fact that 98 percent of the package is exactly the kind of stimulus that people would want."

By Dan Froomkin  |  February 11, 2009; 12:25 PM ET
Categories:  Financial Crisis  
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Next: Obama Defends His Bailout


You can go back on the road and campaign all you want but there is a large group of people in this country that see right through the fear that Mr. Obama is hurling at us. Other people need that fear to understand that they don't understand at all. They just remain scared and hang on to Mr. Obamas coattails for an answer. Looks like the same folks that gather around Jessie Jackson looking for that comforting message that is hidden in whatever he says. So this is change. I don't know if it is change we want or need.

Posted by: SouthernCross2 | February 11, 2009 1:52 PM | Report abuse

SouthernCross2; How dare you speak of Obama instilling fear in Americans for his stimulus package. Your Republicans colors are showing! Your tax cuts for the rich over the last 8 years have gotten this country into the position we are in. And there was plenty of fear mongering throughout them. Insanity would be to continue to repeat the failed policies of the past 8 years, expecting a different result. Sixty seven percent of Americans are favoring President Obamas plan. You are in the minority, Thank God!

Posted by: MAC14 | February 11, 2009 2:35 PM | Report abuse

I was just wondering has anyone thought about even if this stimulus package passes today, how long it will take to start seeing any improvement in the ecomomy. If our Government want to really stimulate and get people back to work. The could save big dollars and give everyone 100,000.00 dollars were as I and many other hard working Americans would use the money to buy a car payoff house all the things have an immediate effect on the economy. The trickle down effect wont work for at least a year may be two. The trickle up effect has almost and overnight effect and could be lasting if done the right way. It does noone any good to cut taxes on the middle class if they aren't working to pay taxes. Put people to work by selling cars,houses,computers or what ever, it all trickles up and peoplr go back to work. Just an idea for a small town guy with a small town education.

Posted by: cartracer24 | February 11, 2009 2:38 PM | Report abuse

The Washington Post's Michael D. Shear and Anne E. Kornblut address Obama's use of a straw-man argument.

Curious. I wonder where these two truth-seeking heroes were when Bush and his cronies were slandering liberals with strawmen like "aid and comfort" and "compassion and understanding" for Al Qaeda.

(I usually try to stay away from comparisons like that, but this one struck me as far too absurd to go unchallenged)

Posted by: BigTunaTim | February 11, 2009 2:53 PM | Report abuse

The past 30 years we've heard government spending is wasteful and unnecessary. Yet both Reagan and Bush opened the spigot of government spending to private enterprise, but nothing was spent on the public good.

Now we are at the point where consumers aren't buying. Businesses have no incentive to invest in production muchless hire new employees because they have no buyers. Overseas buyers aren't buying. Unsold products are piled up in the warehouses. So the government has to step in.

Interest rates cannot be lowered any lower. Tax-cuts are neither stimulative nor do they get people back to work. 2003 turned out to be one of the lowest rates of job creation in history. Recent history shows tax-cuts go to savings and paying down debt rather than consumption. The only tool left is government spending.

The notion that Obama is using fear to get his stimulus package passed is ridiculous -- the evidence that we are in a crisis is clearly based on the facts: the economy is tanking, people are losing their jobs at alarming rates.

Jan: 598,000 jobs lost

Nov - Jan: 1.8 million

unemployment: 7.6 %

unemployed: 11.6 million workers

Dec. 2007 when the recession began: 3.6 million jobs were lost and $6 trillion dollars in personal wealth disappeared.

Furthermore it is imperative to move quickly to avoid a deflationary spiral and prevent unemployment from getting out of hand. Otherwise states will be forced to lay-off massive numbers of employees: police, teachers, etc... on top of the hundreds of thousands of workers joining the ranks of the unemployed on a monthly basis. It could get real ugly real fast.

When the Republicans tolerate "off-the-book" spending for the Iraq war -- in the form of "emergency" supplemental appropriations closing in on $1 Trillion -- and block oversight efforts on how that money is used renders their fiscal conservatism argument moot.

At this point spending money is the only thing that will create jobs, boost productivity and stimulate investment.

Critics want you to believe this is the Democrats wish-list; It's not.

There simply are no other options.

Posted by: serena1313 | February 11, 2009 8:32 PM | Report abuse

Serously, on the "staw man" argument, no Republican Senator voted against an amendment that had no spending, only tax cuts. So we know what they say that they want. Unless someone can point out a specific offer by any Republican Senator to accept some spending, then no spending is their position. They voted for it.

Posted by: dickdata | February 11, 2009 10:18 PM | Report abuse

I think maybe its past time that the states that don't want stimulus per their GOP delegations simply don't get any federal monies. Is there really any reason to keep subsidizing the South? The Red States refuse to modernize, refuse to get educated, so why not cut them off, remove their military bases, fence them in and be done with it? They don't like us, don't like our liberal progressive views, etc. so maybe give them a time out until they get their thing together.
That's your culture war right there.

Posted by: sparkplug1 | February 12, 2009 5:32 PM | Report abuse

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