POLITICAL REALITIES…. Paul Krugman makes the case this morning, as he has several times before, that the stimulus package pushed by the Obama administration “looks helpful but inadequate.” He adds that “the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.”
John Cole concedes that Krugman may be right about the economic necessities, but is mistaken about the political realities.
[T]he point remains that a larger bill was not political feasible. At all. The current bill just barely is getting the support from the three Republicans it needs, and this is after hundreds of hours of bickering, of paring down spending, and so forth. A larger bill was not politically feasible, and right now, it still has not been turned into law, and anything, as we all know, could still happen. With Gregg out at Commerce and back in the Senate, and Kennedy unable to fly back to vote for the bill, there is some doubt (for me, at least) that the current bill will even pass. A bigger bill simply could not happen in this climate.
Again, Krugman may be right on the contents of the bill, it might not be enough. However, to listen to him discuss the political outcome of the bill’s passage, after he showed a several month inability to recognize the political realities of the crafting of the bill, just makes me want to kick puppies. Or stop reading Krugman.
I’m loath to disagree with John, with whom I agree in almost every instance, but I’m not sure if he’s right about this one. Or, put another way, I think he’s only half right.
It’s true that the “centrist” team of Sens. Collins, Snowe, and Specter were going to demand a smaller stimulus package under practically any circumstances. If congressional Democrats balked at their demands recommended cuts last week, a Republican filibuster would have defeated the bill. What’s more, if the House had passed an $800 billion bill, and Senate Dems said, “Actually, let’s bump this sucker up to $1.2 trillion,” it would have gone nowhere. To that extent, I agree that a larger bill was not “feasible.”
But what if the president had started with a much more ambitious proposal, along the lines of Krugman’s recommendation. I’m obviously not in a position to speak for Krugman, but my sense is his criticism is grounded, at least in part, by concerns over the White House’s negotiating tactics — Obama, the argument goes, ended up with a smaller bill because he started with a smaller bill.
Let’s say the president launched this endeavor by emphasizing the projections of a three-year economic gap of $2.9 trillion, and against this backdrop, unveiled a $1.2 trillion plan that emphasized the most stimulative measures (infrastructure, low-income aid, and states), while de-emphasizing less stimulative measures (tax cuts).
Now, I understand the argument — if Collins/Snowe/Specter weren’t comfortable with a $900 billion package, they certainly wouldn’t go for a $1.2 trillion package. But I’m not sure. These three took a surprisingly arbitrary and haphazard approach to the negotiations. They wanted a smaller number, just so they could say it was smaller. They eyed $100 billion in cuts, because $100 billion had a nice ring to it. They were thrilled to fall under an $800 billion ceiling, not for any policy goal, but because it sounded “reasonable.”
It seems more than plausible to me that if the House passed a $1.2 trillion plan, Collins/Snowe/Specter would start talking about the virtues of $1.1 trillion, or possibly just rounding it down to $1 trillion. And if so, and Krugman’s right about the need for a more ambitious policy, it suggests we would have ended up with a bigger stimulus if we’d started with a bigger stimulus.
Post Script: I should note that Senate passage really does seem likely. Gregg will vote against, and Kennedy won’t be there, but Sherrod Brown is coming back tonight from his own mother’s funeral, just so the bill will get 60 votes.
