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Thursday, January 29, 2009

The Democrat's Dilemma

Republicans and Democrats share a history of legislative shenanigans, to be sure. And though Republicans are suddenly sounding reasonable when discussing the pork in the latest stimulus bill on its way to the Senate (after passing in the House 244 - 188, with all Republicans voting against), the traditional Republican mantra of tax relief for the upper and upper middle class would certainly be a bad proposal in today's recession.

But, again, Republican talking points today seem much more reasonable. Contra Bob Herbert, who writes in the NYT today that we should all just stop listening to the minority party (nice spirit of bi-partisanship, Mr. Herbert), I think the minority party, in its opposition, is helping improve the pork-ridden bill and hence is serving the public's interest.

They're doing this in two ways. One, they're caterwauling about the obvious pork in the bill. Indeed some of the more egregious examples of pork have already been removed, like hundreds of millions for contraceptives under the guise of a family planning expansion promoted by House Speaker Nancy Pelosi. (Give initial credit for removal of this lu lu to George Stephanopoulos, who raised this issue in an interview with Pelosi on ABCs "This Week". Also it was President Obama who, officially, requested it be dropped. Bravo.) Resodding the White House lawn also got nixed.

Two, they're asking the hard questions about where the stimulus actually resides in the stimulus bill, questions that I think point to real problems that the majority Democrats seem curiously sanguine about, given the severity of the economic crisis.

For instance, the Congressional Budget Office released a troubling analysis of the proposed bill, calculating that only about 20% of the 816 billion will be spent in fiscal 2009. So much for shovel ready. And there's the troubling fact that, of this, only about 30 billion is tagged for infrastructure spending.

So, where is the money going? Well, to entitlement programs and special interest groups, of course:

  • 2 billion for child care subsidies
  • 50 million to the National Endowment for the Arts (NEA)
  • 400 million for global warming research
  • 2.4 billion for carbon capture projects
  • 650 million for digital TV conversion coupons
  • 87 billion for Medicaid
  • 1 billion for nutrition programs
  • 66 billion for education spending

And on and on.

To be sure, some of this spending is laudable, and provides funding for worthy goals (like funding the arts, or modernizing the Smithsonian). But if it's really job creation that we're trying to accomplish, it's hard to understand the distribution of funds. For example, the unemployment rate for government workers is a mere 2.3% today, and in the education and health sectors it's only 3.8%. Yet fully 39% of the 550 billion allocated for spending -- the rest is tax relief -- targets these sectors. This is particularly puzzling when we consider the unemployment rates in the sectors hit hardest by the recession: 8.3% in manufacturing, and 15.2% in construction. As Alan Reynolds of the CATO Institute points out today in the WSJ, "If the intent of the plan is to alleviate unemployment, why spend over half of the money on sectors where unemployment is lowest?" Hmm.

So, here's the Democrat's Dilemma. They don't need the lowly Republicans to pass President Obama's stimulus plan; it'll likely sail through the Senate without major modification just as it did the House. And then it'll be law. But, if it's judged a failure in the coming years, they'll be solely responsible for it. Republicans, for their part, can look reasonable by simply pointing at the facts of the bill. They may get blamed for throwing out the spirit of bi-partisanship, but they have the pork in the bill and the puzzling distribution of funds to keep talking about. No one will care about their stubbornness today, if in a few years the stimulus is viewed as a Democratic christmas tree, full of entitlements and goodies for Americans, but a very flawed piece of legislation given its ostensible purpose.

And so it goes. As Speaker Pelosi put it, "We won, we write the bill". Indeed.


mijopo said...

The notion of 'pork' is a bit vague, but isn't it sort of inevitable that an economic stimulus package will contain "pork", i.e., programs that will benefit at a local level. That's at least a significant part of what infrastructure spending will involve.

(In any event, I'll cede the broader point here, the spending plan doesn't seem very well designed to me either)

Erik said...

I'm not as defeatist perhaps about the possibility that a stimulus bill might be aimed at just that, but I agree that "pork" is not as precise as perhaps some other term or description. But alas, a rose by any other name...