Only one national reporter, Michael Grunwald, bothered to take a detailed look at how well the $787 billion stimulus was spent. What he discovered confounds the Beltway conventional wisdom.
The book also contains a well-crafted Woodwardian story of how the stimulus was negotiated and passed. Grunwald puts paid to the idea that the Obama team could have somehow wrung more stimulus money out of Congress. With nearly all GOP senators implacably opposed, a handful of persuadable moderates—Arlen Specter, Olympia Snowe, Susan Collins, and Ben Nelson—had all the leverage. They used it to set a completely arbitrary, non-negotiable $800 billion upper limit on the stimulus, a number far below the $1.2 trillion recommended by Christine Romer, chairman of the president’s Council of Economic Advisers. The only plausible way of obtaining more funds would have been a quick evisceration of the filibuster right at the start of the 2009 Congress, something Majority Leader Harry Reid ruled out even in 2010. The original stimulus should have been bigger, and the administration miscalculated in thinking that it could persuade Congress to pass a second big one later if needed (Larry Summers, in an on-the-record interview with Grunwald, even credits Paul Krugman for correctly predicting this effect). Still, Obama did manage to squeeze out a few mini stimuli in the form of extensions of the payroll tax cut and unemployment benefits, which put total stimulus spending closer to Romer’s estimate.
Grunwald does sometimes get a bit overexcited about the scale of the Recovery Act’s transformation of the economy; the medium- to long-term effects of the act have obviously not yet been firmly established. But slightly overselling the stimulus’s longer-term impact doesn’t negate the importance of what Grunwald has delivered. The depth of his reporting and his understanding of the enormity of the Recovery Act’s accomplishments are both impressive. One of the most telling moments in the book comes when several Obama aides, veterans of the Clinton administration, pause their frantic work on the act to recall the knock-down, drag-out fight the Clinton administration had in 1993 over a relatively piddling $19 billion stimulus— a fight the administration lost. They note how strange it feels to remember the bitter arguments over line items of a few million dollars—the kinds of things that were inserted and deleted by the hundreds in the process of negotiating the Recovery Act. By American governance standards, the stimulus was colossal on a scale very difficult to grasp. We should be grateful that Michael Grunwald, at least, has gotten out his tape measure.
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