Editore"s Note
Tilting at Windmills

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February 6, 2009

ON THE CHOPPING BLOCK.... Senate negotiations are still ongoing, so proposals and offers are not necessarily going to end up in the final stimulus package. But Greg Sargent obtained a memo from the Senate today that details "the latest cuts being eyed by the gang of Senators being led by Dem Ben Nelson and GOPer Susan Collins." The total for cuts in the package is between $80 billion and $100 billion.

According to the document, funding for public transit and school construction would be reduced, funding for "Defense operations and procurement, STAG Grants, Brownfields, Additional transportation funding" would be increased; and funding for these programs would be eliminated from the stimulus bill altogether*:

Head Start, Education for the Disadvantaged, School improvement, Child Nutrition, Firefighters, Transportation Security Administration, Coast Guard, Prisons, COPS Hiring, Violence Against Women, NASA, NSF, Western Area Power Administration, CDC, Food Stamps

The goal, according to Nelson, Collins, and their cohorts, is to limit the spending package to the most stimulative expenditures.

Now, there are good arguments for all of the various areas Nelson and Collins want to cut, but I'd like to single out food stamps, in part because I care about low-income families eating during a deep recession, and in part because they're an excellent stimulus. You may have seen this chart before, but it's worth looking at again:

stimulus.gif

Food stamps aren't just an effective stimulus, they're among the best when considering the proverbial bang for the buck. In fact, they're right up there with infrastructure (Democrats wanted to add additional infrastructure spending, but Republicans blocked it) and aid to state governments (which Nelson and Collins also want to cut).

I understand the drive to trim the overall package. I think it's misguided, but I understand it. But if you're looking to limit spending to areas with meaningful stimulative effects, why cut food stamps?

Post Script: I'd just add, by the way, that it's frustrating to see how arbitrary the decisions are in these negotiations. The Senate bill, before Nelson/Collins cuts, stands at $920 billion. The "centrists" want to cut $100 billion. Why? Apparently because it seems like a good number.

* edited slightly for clarity

Steve Benen 3:35 PM Permalink | Trackbacks | Comments (37)

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Comments

Not that I doubt the conclusions here, but what paper(s) is "Moody's Economics.com" relying on?

Posted by: Omar on February 6, 2009 at 3:35 PM | PERMALINK

Why cut food stamps? Because Republicans can't help themselves. It's just the way of their people.

Posted by: Steve High on February 6, 2009 at 3:37 PM | PERMALINK

How much can be done or undone in conference?

Give Obama a week to jawbone this might making the conference report impossible to vote against for at least 60 senators.

Posted by: tomj on February 6, 2009 at 3:42 PM | PERMALINK

Why cut food stamps?

I'll answer your question with a question: how do food stamps make the rich and powerful owners of the Republican Party richer and more powerful?

Because to Republicans, that's the purpose of government -- not ensuring that low-income families can eat during a deep recession.

Posted by: SecularAnimist on February 6, 2009 at 3:42 PM | PERMALINK

Nelson is from a #@*$ing FARM STATE! Is he nuts? Who does he think food stamps were set up to help?

And how many Mainers are on food stamps? I guarantee you it's substantially above the national average.

Posted by: slaney black on February 6, 2009 at 3:42 PM | PERMALINK

These cuts are so stupid and indefensible that these "moderates" are probably undermining their own cause.

Good.

Posted by: g. powell on February 6, 2009 at 3:43 PM | PERMALINK

I can't see how eliminating funding for "School improvement, Child Nutrition, and Firefighters" will resonate with the public like funding contraceptives or some of the other things that was been played up previously.

Posted by: Old School on February 6, 2009 at 3:44 PM | PERMALINK

If they make those cuts, I hope Obama vetos it. Then I hope the House rewrites it and eliminates most of the tax concessions to the Republicans.

Posted by: Catfish on February 6, 2009 at 3:47 PM | PERMALINK

The Republican ethos - rich people got us in this sewer but we can climb out on the backs of the poor and uneducated.

Posted by: tsquared on February 6, 2009 at 3:49 PM | PERMALINK

Q: Why cut food stamps?
A: Food stamp recipients don't give to GOP campaign committees.

Next question.

Posted by: danimal on February 6, 2009 at 3:49 PM | PERMALINK

Wasn't it the Republicans' best thinking that in large part got us into this mess? Why is anyone listening to them now?

Posted by: Reverend Dennis on February 6, 2009 at 3:50 PM | PERMALINK

Firefighters and cops? Just how stupid are the ReThugs?

Dems need to get the public relations engine started up and buy ads in Red States saying their Congressmen and Senators want to lay off firefighters and cops.

They need to put the names of the legislators, their phone numbers and their email in BIG TYPE and urge people to call them. Hey, the newspapers and local tv stations could probably use the bucks, too, so the ads would be stimulus as well.

Posted by: Cal Gal on February 6, 2009 at 3:50 PM | PERMALINK

Maybe we should just try another strategy. Whatever stimulus bill we pass now will not work because only the ineffective things will be preserved. So let's just give up on it and blame the Republicans. And then we should pass a budget that includes the stimulus we want. The budget must be passed soon anyway. So roll the stimulus into it. Budget resolutions are exempt from filibusters, so we only need 51 votes then.

Posted by: fostert on February 6, 2009 at 3:54 PM | PERMALINK

What do you mean "there's a good argument" for the other cuts proposed? Goddammit, we need jobs -- period. Head Start, firefighters, TSA, school improvement, child nutrition are nothing but new jobs. Tax cuts that do not go solely and entirely to people (families) making under 75 or 100K as a fundamental and permanent rebalancing of the tax burden are a total waste except to assure passage from grotesque idiots. Until jobs grow, everyone will, once again, just pay debts or save the reductions.

Posted by: urban legend on February 6, 2009 at 3:55 PM | PERMALINK

No voice vote. Recorded vote, televised on C-Span, line item by line item. And amendments, too. Sure, it might take a while, but it's important to make these folks accountable for their inanities. No backroom deals or compromises. Anybody want to filibuster? Let them get the encyclopedia, and fill the Senate chamber with cots. Or is that asking too much of a great democracy -- real transparency?

Posted by: Greg Worley on February 6, 2009 at 3:57 PM | PERMALINK

The jobs lost goes up and so does the crime rate. What a novel idea! Let's cut firefighters and cops and food stamps!

Posted by: Schtick on February 6, 2009 at 3:57 PM | PERMALINK

Great article in the NY Times about Japan's two decades of experience with economic stimulus,

http://www.nytimes.com/2009/02/06/world/asia/06japan.html?pagewanted=1&_r=1&hp

The lesson,

Japan’s experience suggests that infrastructure spending, while a blunt instrument, can help revive a developed economy, say many economists and one very important American official: Treasury Secretary Timothy F. Geithner, who was a young financial attaché in Japan during the collapse and subsequent doldrums. One lesson Mr. Geithner has said he took away from that experience is that spending must come in quick, massive doses, and be continued until recovery takes firm root.

Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending.

“It is not enough just to hire workers to dig holes and then fill them in again,” said Toshihiro Ihori, an economics professor at the University of Tokyo. “One lesson from Japan is that public works get the best results when they create something useful for the future.”

. . . .

Japan’s experience also seems to argue for spending heavily to promote social development. A 1998 report by the Japan Institute for Local Government, a nonprofit policy research group, found that every 1 trillion yen, or about $11.2 billion, spent on social services like care for the elderly and monthly pension payments added 1.64 trillion yen in growth. Financing for schools and education delivered an even bigger boost of 1.74 trillion yen, the report found.

But every 1 trillion yen spent on infrastructure projects in the 1990s increased Japan’s gross domestic product, a measure of its overall economic size, by only 1.37 trillion yen, mainly by creating jobs and other improvements like reducing travel times.

Economists said the finding suggested that while infrastructure spending may yield strong results for developing nations, creating jobs in higher-paying knowledge-based services like health care and education can bring larger benefits to advanced economies like Japan, with its aging population.

Posted by: alan on February 6, 2009 at 3:58 PM | PERMALINK

Ali Velshi on CNN:

If you're giving food stamps and you're giving unemployment benefits, that's not stimulus; that's simply helping people out who are in a lot of trouble. And as we report here almost every night, that's an increasing number of people.

Say the question isn't why Republicans want to cut food stamps but the reason average citizens are willing to go along with that.

I think cognitive psychologists (i.e, social science researchers, not therapists) might be able to point to some mechanism whereby "helping people" and "economic stimulus" live in two different parts of the brain, so to speak, so that people unconsciously do believe that something that fits into one category must therefore not fit into the other.

This certainly explains a lot of the thinking I'm seeing regarding the contraception flap, etc. etc. Maybe there are other elements to the unconscious schema at work:

bridge building = manly = stimulus
social programs = not manly = not stimulus

Something should be done to combat this kind of thinking--it's all too easy for perfectly well-intentioned citizens to nod their head and go along with it when they hear it.

Posted by: Richard on February 6, 2009 at 4:01 PM | PERMALINK

Also, I have to second alan's recommendation re the NYTimes article:

Moreover, it matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than infrastructure spending.
Posted by: Richard on February 6, 2009 at 4:02 PM | PERMALINK

The stimulus should include *several times* more food stamp assistance!

But Republicans don't want to do what works OR what is right.

Posted by: Chris S. on February 6, 2009 at 4:07 PM | PERMALINK

Here's what I don't understand why the MEDIA doesn't understand and question the ReThugs about:

If people don't have income, how will income tax cuts help them? If people don't have unemployement or food stamps, how can they buy food from grocery chains owned by ReThugs? How can they buy chinese shoes from Wal-Mart? How can a tax cut to a small business help if people can't buy what they're selling?

What is more "stimulative" than putting money in the pockets of people who will IMMEDIATELY spend it and not save it?

Posted by: Cal Gal on February 6, 2009 at 4:10 PM | PERMALINK

"Now, there are good arguments for all of the various areas Nelson and Collins want to cut, . . ."

Are you arguing in support of the cuts or the proposed spending areas?

I would substitute "in support of" for "for" in the above sentence because I initially thought you thought they had good arguments for cutting these areas. Pissed me off until I reread it.

Posted by: bdop4 on February 6, 2009 at 4:25 PM | PERMALINK

Cal Gal wrote: "Here's what I don't understand why the MEDIA doesn't understand and question the ReThugs about ..."

Because the job of the MEDIA is not to challenge or question the Republicans, but to recite the same script the Republicans are reciting, because they both serve the same corporate masters.

Posted by: SecularAnimist on February 6, 2009 at 4:25 PM | PERMALINK

alan and Richard:

Your posts are great examples why infrastructure should be taken out of the stimulus bill and debated as a separate package so that we can implement a wise, not a rushed or premature infrastructure strategy. I have no doubt that in such haste we'd have all kinds of "brdges to nowhere" in the stimulus bills final passing.

Posted by: Tommer on February 6, 2009 at 4:35 PM | PERMALINK


stop whining and write to everyone you can think of that if they waht to reduce the "fiscal impact" of the bill they should remove all the tax breaks for anyone earning over the median income and immediately revoke the Bush tax cuts.

Posted by: sue on February 6, 2009 at 4:35 PM | PERMALINK

"I'd just add, by the way, that it's frustrating to see how arbitrary the decisions are in these negotiations. The Senate bill, before Nelson/Collins cuts, stands at $920 billion. The "centrists" want to cut $100 billion. Why? Apparently because it seems like a good number."

And $920 billion isn't arbitrary?

Posted by: Tommer on February 6, 2009 at 4:36 PM | PERMALINK

If Government is a solution to the problem then Republican ideology is repudiated. Echoing Chris' comment, they want the stimulus to fail, knowing they want it to fail they have decided to use it as a giveaway to lobbyists, special interests and corporations.

It's incredible hearing Republicans and their talking head underlings fanned out across the airwaves trumpeting their bullshit talking points. Yet again we are presented with a WMD/Sarah Palin litmus test for sanity and Republican commentators and politicians can't escape from their brainwashed minds long enough to see the truth spitting in their collective faces.

Posted by: grinning cat on February 6, 2009 at 4:37 PM | PERMALINK

CNN is almost unwatchable anymore with all of thier conservative talkers belching out republican talking points. They were fine during the election, but now they have shifted to try to catch Fox. I don't understand what they are thinking. Ali Velshi is aweful. Lou Dobbs is the worst of the bunch.
To say increasing foodstamps is not stimulative is just a plain, bold-faced lie...fuck you Ali Velshi.

Posted by: Patrick on February 6, 2009 at 4:37 PM | PERMALINK

This is very depressing and very frightening. I can't believe how PETTY things are getting.

It's utterly demoralizing to see these adults act age two.

I keep hearing whining about Pelosi putting this together on her own--she seems to be the scapegoat here.

Who cares who put what together?
And how dare McSame chime in that it's not truly a bipartisan bill?

Who the f**k cares?

As Krugman so adeptly points out, bipartisanship is but a myth!

Posted by: jane doe on February 6, 2009 at 4:39 PM | PERMALINK

Cal Gal: Somehow, you are much smarter and wiser than the media and all the Republicans arguing against a rational stimulus plan. Where did you receive all this wisdom? Obviously not by watching TV or listening to the Talking Heads who seem to know better than all the rest of us. I'm being facetious, in case you were wondering.

What Cal Gal says is so obviously intelligent and makes so much sense, one wonders how so many miss this reality. Will starving people by denying them access to a means of feeding themselves and denying funding for police and fire services create security for those not directly affected by the crash? Whom will the wealthy call to save them from the starving masses who will overrun their estates, and who will put out the fires set on their businesses by these same angry and desperate people? Let Mitch McConnell face an angry mob and tell them that by cutting their taxes, which they will not pay or cannot pay, he will stimulate the economy. His stimulus "package" will be removed from between his legs, and he will die a slow and agonizing death, with those he represents standing around him and laughing. Yes, I am angry and I am glad that Obama has the courage and wisdom and compassion to lead the rest of us, for without his restraint, the revolution would have already started. People do not understand what happens when desperate people lose all hope and have nothing to lose. They have already lost it all, so they may as well take their oppressors with them.

Beware the consequences of greed and hatred. It will come back to get its revenge.

I am committed to Oneness through Justice and Transformation
peace,
st john

Posted by: st john on February 6, 2009 at 4:56 PM | PERMALINK

The Republicans want a nation in which a tiny, largely hereditary, ultra-rich minority lords it over a majority population of impoverished, powerless, cheap-labor serfs.

Of course, they can't go on TV and say this to the American people. Thus they spout a lot of idiotic, pseudo-ideological nonsense in order to bamboozle the gullible. It's very simple, really.

Posted by: SecularAnimist on February 6, 2009 at 5:00 PM | PERMALINK

The goal, according to Nelson, Collins, and their cohorts, is to limit the spending package to the most stimulative expenditures. -- Steve Benen

I call BS on both Nelson and Collins. If it (making it most efficient) was *really* the goal, then the cuts would have been in totally different areas (tax cuts), not the ones which are the most likely to produce jobs and/or immediate expenditure of money by many.

By the time Nelson and Collins are done trimmin', it won't be a stimulus but a plain, old, cock-tease.

Posted by: exlibra on February 6, 2009 at 5:00 PM | PERMALINK

How much would the senators save if they eliminated all spending that would go to their constituents? Since they are so concerned about the deficit, then the place to start cutting is in the money that would go to Nebraska, Maine and the other Republican dominated states. Let them explain to their constituents how they must be patient until the tax cuts and loans trickle down to them.

Posted by: rick on February 6, 2009 at 5:19 PM | PERMALINK

If they'll let more Liberal Dems cut dollar for dollar as much from the Defense Budget, then I'd say okay. Without such a deal I see no reason to cut those things from the stimulus bill.

Posted by: MarkH on February 6, 2009 at 5:42 PM | PERMALINK

it's frustrating to see how arbitrary the decisions are in these negotiations.

How naive are you?

Every number in the stimulus package is arbitrary.

That reminds me. Are the Republicans still planning to read the whole bill in the Senate debate? It wouldn't be a bad idea to have the whole thing read aloud in public at least one time before the vote.

Posted by: MatthewRMarler on February 6, 2009 at 8:39 PM | PERMALINK

Here's an idea Marler, why don't all of those assholes who spent the last eight years cheering on trillions in spending for the slaughter of innocents overseas just sit the fuck down, shut the fuck up, and realize that they are useless lumps of flesh who have done more damage to our nation than any rational person dreamed imaginable.

The Republican Party is led by a flock of evil fucks whose damage by misrule will take years, likely decades, to undo.

Where were you Marler when Bush was spending us into a trillion dollar a year deficit? After inheriting a budget surplus from the last Democrat to be voted in to clean up after Republican messes? Your concern would be touching if it weren't, quite simply, a moronic partisan attack.

Posted by: the on February 6, 2009 at 9:47 PM | PERMALINK

Folks, with all the naysayiong here about tax cuts, does no one pay attention to the number that shows the payroll cut does almost as much good as direct state aid?

It does VERY well. Frankly, I question the wisdom of the payroll tax as it exists.
Rather than capping it, maybe there should be a floor? What if the minimum wage were deducted from taxed payroll? Increase the rate / increase the ceiling to make the change revenue neutral.

Wage slaves are especially prominent at companies where margins are razor thin. Chain retail and fast food... 7% might truly matter at this level.

If more minimum wage jobs are created, finding people for them might become more difficult. Those with the best prospects could more easily afford above minimum because the first 7 bucks an hour would have no payroll taxes weighing it down. The eighth dollar doesn't cost as much because of the payroll tax they've saved.

Why can't tax cuts be a liberal cause too? If it were, the GOP would be exposed for the plutocratic tool that they are. Let's not raise taxes... let's REDEPLOY them.

Revenue neutral policy shifts should be a game changer. Obama campaigned on tax cuts for ALMOST everyone and won big. Why not keep it going?

Posted by: toowearyforoutrage on February 7, 2009 at 5:26 AM | PERMALINK




 

 

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