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Stimulus Watch

In his interview with NBC's Matt Lauer that aired this morning, Barack Obama acknowledged that he'll be a one-term president if the stimulus doesn't work.

Lauer: "[A]t some point will you say, 'Wait a minute, we've spent this amount of money. We're not seeing the results. We've got to change course dramatically?"

Obama: "Look, I'm at the start of my administration. One nice thing about-- the situation I find myself in is that I will be held accountable. You know, I've got four years. And... you know, a year from now I think people -- are gonna see that -- we're starting to make some progress. But there's still gonna be some pain out there. If I don't have this done in three years then there's gonna be a one-term proposition."

Paul Kane writes in The Washington Post: "The Senate will open debate today on a nearly $900 billion economic stimulus plan that is similar in size and scope to the package the House passed, creating a possibly smooth path for sending a bill to President Obama's desk by the mid-February deadline.

"But senators in both parties hope to alter the legislation, focusing on easing the housing crisis, increasing infrastructure spending and cutting taxes on corporations. If many of these changes are accepted in the Senate, which hopes to finish voting on the plan by Friday, it could complicate the effort to work out differences between the two bills. It could also drive the overall cost of the legislation, which was $819 billion in the House version and is $887 billion in the Senate plan, much closer to the politically shaky $1 trillion mark."

Sheryl Gay Stolberg writes in the New York Times: "Mr. Obama is now on a quest to reshape the legislation in a way that will bring Senate Republicans, and perhaps eventually some House members as well, on board. On Monday, he will meet with Congressional Democratic leaders at the White House for further discussions on the package."

David E. Sanger writes in the New York Times that "one question is looming over their search for a cure: Can the government fashion a fast and efficient economic stimulus while also seizing the moment to remake America?

"For now, Mr. Obama and his aides are insisting they can accomplish both goals, following their mantra of using the urgency of the economic crisis to accomplish larger — and long-delayed — reforms that never garnered sufficient votes in ordinary times.

"In fact, at various times in American history, moments like this one have been used for big programs, from integrating the armed forces to creating Social Security and, later, Medicare. So it is little wonder that everyone with a big, stalled, transformative project — green energy programs, broadband networks that reach into rural America, health insurance for the newly unemployed or uninsured — is citing the precedent of Franklin D. Roosevelt, and declaring that a new New Deal is overdue.

"But the question that the Senate will begin debating Monday is whether grand ambitions are getting in the way of pulling the country out of a nose dive. And so for every comparison of this moment to Roosevelt's first hundred days, there are warnings that much of his social experimentation did not have a big impact on America's economic recovery, which took years."

Michael Scherer and Massimo Calabresi talk to Obama's economic guru, Larry Summers: "[T]his economic wunderkind turned Obama adviser is moving at flank speed on the biggest restructuring of the U.S. economy since the New Deal.....

"'Any study of history reveals that with crisis comes enormous fluidity in the system,' he says...'In Washington the transition from inconceivable to inevitable can be rapid if forced by events.'...

"Some Republicans call the current plan wasteful; free-spending Democrats long for more investments over years, not months. Summers argues that the stimulus bill splits the difference: not only will most of the money go to reviving the economy in the next 18 months, but much of it will also go to projects that could save money over the long term, such as weatherizing 75% of federal buildings and computerizing medical records. 'The bill does a good job of marrying the twin imperatives of putting people back to work and doing the work that needs to be done,' he says. 'No $825 billion bill is going to not have some projects that any individual disagrees with.'

"Assuming the stimulus measure is passed--in private, even top GOP aides believe it will happen by mid-February--Summers says Obama will push next to stabilize the banks and the housing market. The Administration is weighing approaches that range from buying up banks' bad assets or guaranteeing the solvency of banks that hold them to taking an even larger ownership stake in the institutions and then pouring more cash directly into them. None of the options, Obama Administration officials admit, are ideal.

"And then, perhaps as early as March, they'll launch their biggest lift with the beginnings of a plan to reform Social Security and Medicare, the two entitlement programs that, even before the economy collapsed, were threatening the Treasury with bankruptcy. By any standard, it is a massive three-month agenda fraught with political risk. The key to getting it all done, Summers says, is entering into a 'compact' with the country 'that this isn't just government as usual throwing money at things.'"

By Dan Froomkin  |  February 2, 2009; 1:40 PM ET
Categories:  Financial Crisis  
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Next: The White House's New Tone

Comments

We can recoup some of the cost of the new stimulus package by sending Republican congress members home and replacing them with a tape recorder that repeats the words "tax cuts" on a loop. It would even work to their benefit if Obama took up their idea. When the economy continues its nosedive because people are using their tax cuts to pay down credit cards, the GOP could just blame the tape recorder.

Posted by: BigTunaTim | February 2, 2009 3:28 PM | Report abuse

big tuna time wrote:
"When the economy continues its nosedive because people are using their tax cuts to pay down credit cards, the GOP could just blame the tape recorder."

and if people spend tax cuts the money goes to China!!!

Posted by: knjincvc | February 2, 2009 3:35 PM | Report abuse

The currently designed stimulus package guarantees a one term presidency. Giving short term free lunches to nonproducers add flames to the downward spiral, for producers will hunker down and cut costs, manpower and wait out the administration. Why risk time, talent or treasure just to get taxed, criticized, sued, regulated, twirled by every politican's whim...the predictable alternative is ROPE-A-DOPE...sort a roll off the ropes and fend off the dopes!!!

Posted by: markone | February 2, 2009 6:31 PM | Report abuse

Is Matt Lauer aware ........that the Bush administration ran up over $5 TRILLION in DEFICITS in their first 7.5 years? That's nearly $17,000 per American.

Sorry, I couldn't stop laughing after I wrote "Is Matt Lauer aware" as the obvious answer is Matt Lauer is unaware of anything that isn't on his TelePrompTer or his ear prompter with his producer feeding him lines.

Posted by: boscobobb | February 3, 2009 2:21 AM | Report abuse

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