SF State of Mind..

$787 billion stimulus package approved

On Friday, Congress approved President Obama's $787 billion stimulus package – the Economic Reinvestment and Recovery Act of 2009 (ERRA). While the vote was a clear victory for Obama and fulfilled the central goal for the early stages of his presidency, it also revealed the extent partisan division remains in Congress. The final vote in the House was 246 to 183, with 7 Democrats casting opposition votes with all 176 Republicans. In the Senate, the vote was 60 to 38; 3 centrist Republicans and 1 Independent joined the 55 Democrats in favor.

I’m glad the stimulus bill was finally passed despite the disgraceful performance by Congressional Republicans who desperately tried to sabotage the stimulus bill at every turn. Motivated by declining popularity nationwide and encouraged by the bill’s slow start and media coverage questioning Obama’s leadership, Congressional Republicans seized the opportunity to make their stand. While political maneuvers are unavoidable, there is a time and a place.

In the face of a historic economic recession, the country needs public servants (Congressmen and women) whose decisions are made with the country’s best interests in mind. This is not the time for posturing and self-serving rhetoric. The stakes are simply too great. Most reputable economists have unanimously agreed that a failure to act decisively in the face of this crisis will result in even more unemployment and a worsening decline. Even with that context, Republican senators refused to deviate from standard G.O.P. talking points, labeling the stimulus package as a pork-laden “spending bill” that will have a negligible affect on the economy. While I strongly disagree with that assessment, given the magnitude of the stimulus bill, a rigorous examination of ERRA is absolutely necessary; any real discussion seeking to understand why and how federal money will be allocated is also warranted.

Unfortunately, many Republican congressmen were not interested in having meaningful conversation. Some of their talking points bordered on the absurd. For instance, G.O.P. chairman Michael Steele asserted “in the history of mankind” no “federal, state or local” government has ever “created one job" (NYTimes.com). This statement is so out-of-touch and ignorant that it’s comical, but it represents the fundamental Republican argument that excessive spending is a useless and expensive mechanism for creating jobs. There are two problems with this position. First, it is imperative for government to spend money during this economic recession in order to create jobs – doing nothing is not an option – and second, Bush-era Republicans have no moral authority to lecture about deficits and fiscal frugality.

Despite Republican opposition, at the end of the day President Obama scored a victory. The American public knows that he made genuine efforts to reach out to Congressional Republicans, listen to their concerns and work with them to hammer out a stimulus package. The Republican spin-machine that painted the stimulus package as a “spending bill” did little to sway public opinion: its approval rating remains above 50 percent in all polls – Gallup, CNN, Pew, CBS – except Rasmussen, which only polls the G.O.P. cites. Secondly, the stimulus package arrived basically in accordance with the schedule and cost Obama had set for it. President Obama’s job approval rating now ranges from the mid-60s (Gallup, Pew) to the mid-70s (CNN). In addition, 48 percent of Americans told CBS, Gallup and Pew that they approve of Congressional Democrats, while only 31 (Gallup), 32 (CBS) and 34 (Pew) percent said the same of their Congressional Republicans (NYTimes.com) In the end, the Republican Party looks out-of-touch and petty.

As for the stimulus measure itself, it combines short-term tax cuts with long-term government spending on public works projects, education, health care, energy and technology. The bill also provides for federal money to be transferred to states. According to the Congressional Budget Office, more than 74 percent of the money will be spent within the next 18 months.

It is too early to measure the bill’s expected impact with absolute certainty. There is lively debate about whether or not it has the power to significantly alleviate the nation’s economic problems and create/save “3 to 4 million” jobs, as the Obama administration has asserted. That is quite a tall order and clearly the ERRA is not a magic bullet. However, the bill is a strong first step towards reversing the current economic decline and fundamentally transforming America. Obama must harness the massive amount of public support behind him and act decisively to increase federal spending on public works projects and programs. ERRA’s fast timetable means its initial impact will be measurable relatively soon. The results of that assessment will undoubtedly define Obama’s presidency - we can only hope it is for the good.

For a very comprehensive ERRA breakdown, check out the New York Times: