Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

September 1, 2010

A NEW ECONOMIC PACKAGE?.... I've had a few posts lately, suggesting the White House would be wise to push a new economic package with an emphasis on job creation. With the recovery stalling, hoping that the status quo will improve just isn't enough. There's public demand for more government intervention, and it'd be good policy and good politics to act quickly.

For all the evidence that the administration isn't inclined to push a new economic package, the Wall Street Journal reports today that a proposal may be considered after all.

The Obama administration is considering a range of new measures to boost economic growth, including tax cuts and a new nationwide infrastructure program, according to people familiar with the discussions.

The president's economic team has met frequently in recent days to list ways to bolster the struggling recovery, according to government officials.

On the list of possible actions: additional tax cuts for small businesses beyond those included in a $30 billion small-business lending bill before the Senate. It's not clear what those tax breaks would target or how much they might cost in lost revenue to the government.

Also in the mix: a possible payroll tax cut for businesses and individuals, as well as other business tax breaks, according to people familiar with the discussions. Currently, income taxes are scheduled to rise with the expiration of Bush-era tax cuts at the end of this year.

It's hard to assess the merits of such a plan without more details, and it's probably premature to consider what kind of resistance this would face in Congress. Indeed, the WSJ is the only outlet reporting that such a proposal is even a possibility.

But part of me wonders -- this really is just speculation -- if there's a debate underway among administration officials, and some are leaking to gain leverage. Some told ABC last week that no additional economic plans will be forthcoming, so today, another part of the team tells the Wall Street Journal that a new package may be on the way after all.

On Monday, President Obama specifically told reporters his administration is "hard at work in identifying additional measures that could make a difference," and he'd "address these proposals in further detail in the days and weeks to come." Is this news part of that effort?

So, if the WSJ article is a trial balloon or part of a fight for leverage, let me take a side: yes, do something. A new package with tax breaks and infrastructure would probably less effective than spending alone, but craft a package that stands a chance of passing quickly.

Steve Benen 10:05 AM Permalink | Trackbacks | Comments (22)

Bookmark and Share
 
Comments

YES! For crying out loud, do ANYTHING! Go up in a damn airplane and drop $1 bills!

Look, they can't do anything that will actually affect the economy. First, it's almost certainly too late for anything to pass Congress before the election. Second, anything that might pass would have to be so small and innocuous that it almost went without notice (although I think the Republicans would block even a national mom-and-apple-pie-day resolution.) And third, even if something big did pass, these things take a year to work -- look at the first stimulus package. So forget doing something that WORKS.

But DO SOMETHING, ie, BE SEEN to do something. Make lots of noise and smoke. Run around and holler. Set off fireworks. Channel inner used-car-plus-furniture-warehouse-clearance-spectacular-blowout salesmen. It's an ELECTION, not a convention at Davos.

Honestly, I just don't think this White House has it. We still have a very good chance to win, but I think they'll dither and mutter and be all serious and sober and just get crushed.

Posted by: bleh on September 1, 2010 at 10:20 AM | PERMALINK

You can argue all day about what's more effective or get a combination of tax cuts which are popular all around and infrastructure spending, which are also popular all around passed and out the door.

Would it impact a 16 trillion dollar economy like ours?

Who knows.

Will it make people think the Govn't is at least doing something rather than taking the do nothing Hoover economics approach?

You betcha.

Remember, the Chamber of Commerce came out in support of the last Stimulus. Maybe with those rats on the Presidents side again, getting this through Congress won't be such a hurdle.

I'm guessing though that some cuts to other programs are going to take place and that won't be popular. So, something is going to have to give.

Posted by: mikefromArlington on September 1, 2010 at 10:21 AM | PERMALINK

Pass something quickly? Are you guys on another planet? It'll all be filibustered, if not by the GOP, than certainly by the likes of Ben Nelson and Joe Lieberman. It's too late. Dems had their excellent chance, squandered it all away, leaving the voters with...what? Better health insurance? I think not. It seems nobody qualifies. Guantanamo closed? Not as of last night. A consumer protection agency lead by the only person who'd actually stand up for consumers? Nah. But, hey, let's cut Social Security benefits. That'll show 'em a trick or two. I am totally disgusted.

Posted by: Ben on September 1, 2010 at 10:28 AM | PERMALINK

I think the administration realizes they HAVE to do something. With the upcoming election, and GOP pbstruction, I'm afraid it will be merely window dressing - to make it appear the admin is doing somehting, when they're not really doing anything.

Posted by: Stetson Kennedy on September 1, 2010 at 10:31 AM | PERMALINK

I heard an interview with a small businessperson on NPR many months ago. They said the problem for small businesses in general was not taxes; the problem was income - not enough of it.

Posted by: CDW on September 1, 2010 at 10:35 AM | PERMALINK

Ben, instead of being disgusted how about getting out there and building the progressive infrastructure necessary to getting the right folks elected? In the meantime, we have a squishy moderate (at best) Democratic leadership that is the only thing which stands in the way of a hard-right resurgence. At least right now we've got to fight with the soldiers that we have, not what we want.

Posted by: Dr Lemming on September 1, 2010 at 10:36 AM | PERMALINK

If Obama and the Democrats don't at least appear to be trying to do something meaningful, and also making sure the public knows who's preventing action if/when those efforts falter, they might as well pack their bags and go home now. Six months of sitting on their butts and doing nothing is the worst thing they could do.

Posted by: qwerty on September 1, 2010 at 10:38 AM | PERMALINK

Hmm, a New Economic Package?

A N.E.P?

Dunno...sounds a little socialist to me. ;)

Posted by: neilt on September 1, 2010 at 10:40 AM | PERMALINK

Don't bother, Obama. Seriously.

They have the politics and the policy exactly backwards. The smart move would have been to pass the biggest stimulus possible in the face of the critics and spend the next two years explaining to the public why it was a good idea (falling unemployment and rising GDP would have made the sell easy).

Instead, they capitulated to critics who would never give them credit anyway, passed a half-assed stimulus, and now, with 60 days to go till the mid-terms, they are "considering" additional policy measures that will neither help the economy in the short term nor improve the Democrats' popularity at the polls.

Posted by: square1 on September 1, 2010 at 10:41 AM | PERMALINK

bleh said it best in the first post above

I would just add that it's now -- Labor Day Week -- or never

Posted by: sjw on September 1, 2010 at 10:42 AM | PERMALINK

Dems can be real dimwits. As Duncan Black mentioned weeks ago, they should:

1) Let the "Bush Tax Cuts" expire and be heard of no more.
2) Pass a whole new set of progressive tax cuts, the "Obama tax cuts."

We still get the Repubs fighting for bush policies but we get rid of the largesse for the superrich.

Plus, Steve's suggestion of last week was pretty excellent.

Posted by: AlphaLiberal on September 1, 2010 at 10:44 AM | PERMALINK

WSJ: "The White House is struggling with whether to propose ideas that would appeal to Republicans, and thus get support on Capitol Hill—such as tax cuts—or whether to promote ideas that officials believe could have more economic impact but might hit political resistance, such as more aid for states and more infrastructure funding."

Yeah. Brilliant. Try appealing to Republicans. I think that's a great strategy, and will most definitely work. Why didn't Obama think of it before?

Posted by: Ohioan on September 1, 2010 at 10:58 AM | PERMALINK

For the last 20 years we partied like there was no tomorrow.

Now it's tomorrow. And only time will make this hangover go away.

in other words, we lived beyond our means, both personally and on a government level, and we now need to re-build the economy we destroyed.

-And, a little elbow grease on the infrastructure couldn't hurt. . .

Posted by: DAY on September 1, 2010 at 10:58 AM | PERMALINK

The politics is so simple.

If the election is a referendum on economic performance, the Democrats will lose badly.

If the election is about another stimulus program to get the economy moving, the Democrats will win.

Posted by: david1234 on September 1, 2010 at 11:03 AM | PERMALINK

A great assessment of the Obama administration's failures on both the policy and politics of fiscal stimulus. http://www.ft.com/cms/s/0/5799a774-b534-11df-9af8-00144feabdc0.html

What actually bothers me more than Obama's diddling, is the abject failure of liberals in Congress to take a policy position that is independent of, or possibly contrary to, the White House position.

Why do I keep hearing that there is "no appetite" for more stimulus in Congress? While the GOP is blaming the economic malaise on the "failed stimulus," why can't liberals create a counter-narrative that it was too small? Why do they need a permission slip from Larry Summers before they can do their own jobs?

Posted by: square1 on September 1, 2010 at 11:04 AM | PERMALINK

One other thing. I understand why Obama watered down HCR and FinReg. To be blunt, interested corporations bought off the WH and Congress. Fine. Whatever.

But Obama can't even blame his fiscal diddling on corruption. There was no Goldman Sachs or United Healthcare spending millions of dollars on lobbyists in opposition to a bigger stimulus. It was simply the product of a misguided economic ideology: Modern Hooverism. They clearly actually believe this insanity about austerity, etc.

Posted by: square1 on September 1, 2010 at 11:09 AM | PERMALINK

For those who don't want to do anything more, whether they political advisors, or Tim and Larry who cannot admit that they were wrong and Krugman and Stiglitz were right, you still have to wondering what they are smoking. Once the Republicans take the House and all those radical movement cons get into the Senate (Jim Demint will be the center of mass in the Republican Senate next year once Miller, Angle, Tooomey, and others arrive), they are going to dealing with investigations followed by impeachment, as in these people's minds it is basically unconstitutional for a Democrat to be in the White House, particularly a Black Democrat, and dealing with a full scale attack on the New Deal while the Economy slips back into a recession (unless the Cavalry comes over the hill in the form of an export surge). Also, if they don't put forward a program, the only thing out there will be John Kyl and John Boehner saying that permanently eliminating the estate tax and Paul Ryan's flat tax are just the ticket for jump starting the economy. Something beats nothing everytime.

Posted by: sherparick on September 1, 2010 at 12:10 PM | PERMALINK

hey, isn't there a moderator for this site? A bunch of stupid spam keeps on showing up in thread after thread

(of course the idiot who sends this stuff is out of his mind if he thinks it will generate one penny of business: to him I say, "get a life, bunghole!")

Posted by: sjw on September 1, 2010 at 12:12 PM | PERMALINK

My feelings are at this point the Democrats need a HAIL MARY PASS and I belive that they need to run on a MAKE IT IN AMERICA proposal that will put millions of Americans back to work. That proposal needs to include tax cuts for hiring, a national infrastructure bank, etc.

Posted by: Maritza on September 1, 2010 at 12:39 PM | PERMALINK

This is a good play, both for the country and the Dems, if they can pull it off. They need to shout the plan from the rooftops: a JOBS bill that will be spent on American INFRASTRUCTURE instead of pointless foreign wars and a PAYROLL TAX CUT instead of more handouts to wealthy taxpayers and big business. I'd throw in paying for it by eliminating subsidies to Big Ag and Big Oil and Big Coal. And fer gawd's sake, as Digby might say, get the whole party behind it and get it on the teevee 24/7. Then let the Republicans explain why they're all voting against it. It should be pretty easy to expose them as the party of the wealthy and well-connected who got us into this mess -- they ARE the party of the wealthy and well-connected who got us into this mess!

Posted by: dalloway on September 1, 2010 at 4:17 PM | PERMALINK

This and similar post are disturbing and damning of the Obama administration in several ways.
1. Obama and his team do not understand or accept Keynesian economics. If they did, they would know the size of the stimulus needed ($300-500B) and the multipliers associated with different categories of expenditures. Economics really is a Science in its infancy and no other theory fits the available data but Keynesian. To argue otherwise is the equivalent of drawing solar or world maps in 1510 according to a flat earth and a geocentric solar system. Maybe most humans and Palin [sorry for the typo: the Pope] still believed in both, but the educated non-ideological elite in Europe at the time knew otherwise.

2. Obama still seems to have no clue that to get anything passed--much less what need be passed—see #1 above-- that the filibuster must be broken. NOW. It takes only 50 Senate Dems + Biden to do so. If Obama and the Dems can no longer muster that vote, they’re toast and they really have no one but themselves to blame. They’ve had a near-supermajority for 18 months. Once the Republican get power, they’ll eliminate the filibuster the day they need to.

Posted by: gdb on September 1, 2010 at 4:56 PM | PERMALINK

@Dr Lemming--Been there, done that, dear Doc. I just don't have the drive anymore.

Posted by: Ben on September 1, 2010 at 6:02 PM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly