AN INCREASINGLY AMBITIOUS STIMULUS…. Way back in the midst of the presidential campaign — seems like a long time ago, doesn’t it? — Barack Obama talked about a $175 billion stimulus package. As the economy continued to deteriorate, the talked-about figure became $500 billion.
Last week, the Wall Street Journal had an item pegging the package at starting somewhere between $600 billion and $700 billion. Today, the AP eyes an even bigger number.
President-elect Barack Obama is laying the groundwork for a giant economic stimulus package, possibly $850 billion over two years, in his first test of legislative give and take with Congress.
Obama’s economic advisers are assembling a recovery plan and reaching out to members of Congress and their staffs. Obama aides cautioned that they have not settled on a specific grand total. But they noted that economists from across the political spectrum have recommended spending similar or even larger amounts to jolt the worsening economy.
House Speaker Nancy Pelosi, D-Calif., this week said Democrats were preparing their own recovery bill in the range of $600 billion, blending immediate steps to counter the slumping economy with longer-term federal spending that encompasses Obama’s plan.
Senate Majority Leader Harry Reid, D-Nev., said Wednesday that Obama has indicated that Congress will get his recovery recommendations by the first of the year.
“He’s going to get that to us very quickly, and so we would hope within the first 10 days to two weeks that he’s in office, that is after Jan. 20, that we could pass the stimulus plan,” Reid said. “We want to do it very quickly.”
The speed certainly matters, but the size of the stimulus plan is of equal, if not greater, significance. I’ve heard rumors that the number, which is growing with each passing week, isn’t done, and that some of the experts with the transition team’s ear are thinking about an even bigger rescue plan.
The problem, oddly enough, may be the challenge of spending $1 trillion very quickly. There are only so many “shovel ready” projects, waiting for the green light.
Nevertheless, I frequently refer back to Paul Krugman’s recent item on the necessity of a stimulus package: “My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.”