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Why Republicans Won't Support the Stimulus
Why are Senate Republicans (all, that is, except the lonely moderates Collins, Snowe, and Specter) nixing the stimulus package, as House Republicans did? Not because Obama failed to compromise -- he gave them the tax breaks they wanted, included a whopper for business. Not because Senate Democrats failed to bend -- they agreed to trim more than $100 billion out of a previous version of the bill. Not because Senate Republicans are doctrinally opposed to deficit spending -- many of them happily voted for Bush spending and tax cuts that doubled the federal debt.
The reason has to do with the timing of the economic recovery. If everything goes as well as possible and the stimulus and next round of bank bailouts work perfectly, a turnaround could begin as early as mid-2010. But even under this rosy scenario, employers wouldn't start rehiring until late 2010 because they'll want to be sure the upturn is for real (employment typically lags in a recovery). This means that under the best of circumstances -- assuming the stimulus is big enough to jump-start the economy and the next bank bailout big enough to get credit moving -- most Americans won't feel much better than they do now by November, 2010. Unemployment could easily be hovering close to 8 percent; underemployment, close to 14 percent; and many other indicators, still in the doldrums.
That's if all goes extremely well. But what if the stimulus isn't big enough? (I fear it won't be, given the large and growing gap between what the economy can produce at near full-employment and the meager demand coming from consumers and businesses.) And what if the bailout doesn't quite work? (It may not, given that the banking system is collapsing and many banks are actually insolvent.) The economy in November of 2010 may be worse than it is now, with no turnaround in sight.
Which brings us to the midterm elections of 2010.
Yesterday, while sitting across from Newt Gingrich on George Stephanopoulos's Sunday morning television show, 1994 came roaring back into my head. Gingrich, you remember, turned that midterm election into a national referendum about Bill Clinton's leadership. (No one today remembers what was in Gingrich's "Contract with America," but almost no one did then, either.) Because Clinton's presidency had had a rough start and because House and Senate Republicans had kept remarkable unity in opposing him at almost every turn, Gingrich in the election of 1994 could claim that and the Republican Party offered a clear alternative, and had earned the chance to control Congress.
Fast forward to today and listen to Senate Republicans referring to the stimulus: "This is neither bipartisan nor is it a compromise," said Sen. John McCain this morning. "It is ... generational theft" that will increase the role of government and provide no mechanism for paying back the money. Sen. Mike Enzi said the package "spends everything we've got on nothing we're sure about. I'm supposed to be giddy that we're only spending $827 billion. Frankly, I've had enough of this bailout baloney." Sen. Tom Coburn's office released a list of projects that he calls earmarks and pork, totalling more than $55 billion. And so it went today.
Last week, House Republicans were equally vitriolic.
And wait until they hear about the next stage of the bank bailout. I'd be surprised if more than a handful of House or Senate Republicans support it.
Republicans don't want their fingerprints on the stimulus bill or the next bank bailout because they plan to make the midterm election of 2010 a national referendum on Barack Obama's handling of the economy. They know that by then the economy will still appear sufficiently weak that they can dub the entire Obama effort a failure -- even if the economy would have been far worse without it, even if the economy is beginning to turn around. They'll say "he wanted more government spending, and we said no, but we didn't have the votes. Elect us and we'll turn the economy around by cutting taxes and getting government out of the private sector."
Obama believes Republicans will eventually embrace bipartisanship. I hope he's right but I fear he's wrong. They want to take back Congress the way Newt Gingrich retook the House (and helped Republicans retake the Senate) in 1994 -- with hellfire and brimstone. Once in control of Congress, they'll be able to block Obama's big inititiaves on health care and the environment, stop any Supreme Court nominees, and set up their own candidate for the White House in 2012.
The reason has to do with the timing of the economic recovery. If everything goes as well as possible and the stimulus and next round of bank bailouts work perfectly, a turnaround could begin as early as mid-2010. But even under this rosy scenario, employers wouldn't start rehiring until late 2010 because they'll want to be sure the upturn is for real (employment typically lags in a recovery). This means that under the best of circumstances -- assuming the stimulus is big enough to jump-start the economy and the next bank bailout big enough to get credit moving -- most Americans won't feel much better than they do now by November, 2010. Unemployment could easily be hovering close to 8 percent; underemployment, close to 14 percent; and many other indicators, still in the doldrums.
That's if all goes extremely well. But what if the stimulus isn't big enough? (I fear it won't be, given the large and growing gap between what the economy can produce at near full-employment and the meager demand coming from consumers and businesses.) And what if the bailout doesn't quite work? (It may not, given that the banking system is collapsing and many banks are actually insolvent.) The economy in November of 2010 may be worse than it is now, with no turnaround in sight.
Which brings us to the midterm elections of 2010.
Yesterday, while sitting across from Newt Gingrich on George Stephanopoulos's Sunday morning television show, 1994 came roaring back into my head. Gingrich, you remember, turned that midterm election into a national referendum about Bill Clinton's leadership. (No one today remembers what was in Gingrich's "Contract with America," but almost no one did then, either.) Because Clinton's presidency had had a rough start and because House and Senate Republicans had kept remarkable unity in opposing him at almost every turn, Gingrich in the election of 1994 could claim that and the Republican Party offered a clear alternative, and had earned the chance to control Congress.
Fast forward to today and listen to Senate Republicans referring to the stimulus: "This is neither bipartisan nor is it a compromise," said Sen. John McCain this morning. "It is ... generational theft" that will increase the role of government and provide no mechanism for paying back the money. Sen. Mike Enzi said the package "spends everything we've got on nothing we're sure about. I'm supposed to be giddy that we're only spending $827 billion. Frankly, I've had enough of this bailout baloney." Sen. Tom Coburn's office released a list of projects that he calls earmarks and pork, totalling more than $55 billion. And so it went today.
Last week, House Republicans were equally vitriolic.
And wait until they hear about the next stage of the bank bailout. I'd be surprised if more than a handful of House or Senate Republicans support it.
Republicans don't want their fingerprints on the stimulus bill or the next bank bailout because they plan to make the midterm election of 2010 a national referendum on Barack Obama's handling of the economy. They know that by then the economy will still appear sufficiently weak that they can dub the entire Obama effort a failure -- even if the economy would have been far worse without it, even if the economy is beginning to turn around. They'll say "he wanted more government spending, and we said no, but we didn't have the votes. Elect us and we'll turn the economy around by cutting taxes and getting government out of the private sector."
Obama believes Republicans will eventually embrace bipartisanship. I hope he's right but I fear he's wrong. They want to take back Congress the way Newt Gingrich retook the House (and helped Republicans retake the Senate) in 1994 -- with hellfire and brimstone. Once in control of Congress, they'll be able to block Obama's big inititiaves on health care and the environment, stop any Supreme Court nominees, and set up their own candidate for the White House in 2012.
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Give the R's an inch, and they will try and take a mile, as they did this past week with President Obama. This bipartisanship nonsense has to stop.... Obama has already back peddle on some of his campaign promises, so he should add that one to the broken promises heap as well. Even Paul Krugman brought that up, over the weekend when he had a quick debate with Conservative columnist George Will.
Peoples need to get it through their thick skull that Congress has had over 60 years to enact laws to make EMBEZZLEMENT of the middle class and of the poor, not only LEGAL but JUSTIFIED!
Nonetheless, earlier today, Obama did his best to scare the crap out of Washington to let them know what the dire consequences would be if the stimulus package isn't enacted. The NYT reported earlier today that “The Senate voted 61-to-36, largely along party lines, to move forward toward a final vote Tuesday on the $838.2 billion economic stimulus package.” How was that made possible - well, former Vice-President Cheney had been mobile in his wheelchair but he was unceremoniously dumped from the chair. From that point, the wheelchair was granted to the ailing Senator from Massachusetts. Senate aides wheeled in Senator Kennedy onto the Senate floor for his “yes” vote to close debate for tomorrow’s final vote showdown.
February 9, 2009 11:30 PM | Reply | Permalink
In short, they are playing for their party's interest in direct opposition to the interest of the American people.
February 9, 2009 11:36 PM | Reply | Permalink
So there is poor Pauline, tied to the railroad tracks, with the Big Management Party Express barrelin' down the tracks at 100mph, now that those stray donkeys have been cleared from the line . . . .
A curious point to cut off the scenario.
What happens after Newt II has preserved the precious bodily fluids of the Private Sector for a couple of years? Anybody who believes in the Party of Grant and Hoover turnin' the economy around with cocktail-napkin economics deserves what she is only too likely to get.
Happy days.
February 9, 2009 11:47 PM | Reply | Permalink
They only way conservatives get to continue their facade is to suspend democracy. They are not the majority, and they know it.
February 10, 2009 12:01 AM | Reply | Permalink
Over at Rio Limbaugh , they run to longer-winded scenarios:
Happy days.
February 10, 2009 1:17 AM | Reply | Permalink
Things won't happen like they did in 1994 because this time people are going to see the real effect of tax cuts on education and health cost. People are starting to realize the true parasites on the system are not the very poor, but the very rich. It is the rich that own the companies that get government contracts for technology, security, prisons, schools, and most importantly the military industry. The rich are the ultimate welfare recipients, just look at Wall Street and commercial banks writing themselves fat pay checks with tax money. People are getting a dose of what real conservatives have always been, elitist thieves. The ultra rich are the pirates of the modern world. Exceptions are very few.
February 9, 2009 11:47 PM | Reply | Permalink
If you are correct, glory. Let it be true! It would finally give the left an equal seat at the table. HALLELUJAH!!
February 10, 2009 11:52 AM | Reply | Permalink
Everyone is crossing their fingers hoping that Obama is right about this bipartisan fantasyland but the fact is there is not one even tiny bit of evidence to indicate that is even a remote possibility. On the other hand there is an endless sea of evidence that he is wrong up to and including every lie, misrepresentation and insincere sound bit the Republicans have served up with respect to the President's economic recovery bill. I hope he drops the fantasy and starts going after those scumbags soon. It's all he needs to do to crush them in the midterms regardless of how well the stimulus package does in the short term. Once can forgive Obama to some extenst for not realizing this fully since he's only been in DC for a couple of years even though millions upon millions of us who have been paying attention for the past 20 years already are aware that it is impossible to work with the Republicans.
What I do not understand and cannot abide is the ongoing efforts of Democrats to undermine our nation's future and the Democratic Party's alleged goals by accomodating the unresonable cracker neoconfederates of the Republican Party. It is outrageous, it has never worked, and it never will work. At some point the Democrats in Congress and the President are going to have to drop the pretense of trying to work with those incorrigible assholes and finally at long last stand up and fight for what they claim to believe in instead of hoping that the Republicans will suddenly and magically say they also believe in Democratic principles.
February 10, 2009 12:31 AM | Reply | Permalink
I don't disagree with the analysis, I share it. However I do think that most of you are misinterpreting Obama's bi-partisanship gestures. He will continue to emphasize it through the midterm elections precisely because he believes it will undermine the Gingrich attack. He makes a great show of trying to incorporate all sides by respecting and listing to them, and then reiterates that it was eight years of these failed policies that caused the mess. Through his reaching out to the GOP he is able to frame the debate, and keep the blame on the republicans for their failed ideas. Basically hit them with Bush again and again. Everybody hates and will hate Bush for a very long time. But for Obama he is a gift that will keep on giving for at least a few more years.
Clinton failed because he was an undisciplined dope (draft dodging womanizer) that a lot of us did not trust and made republicans look respectable. Furthermore Reagan and Bush senior were popular, they 'won' the cold war and America ruled the world. Early Clinton was an embarrassing amateur hour who became president only because Ross Perot got twenty percent. Times are very different today.
Obama has a mandate and a perfect foil that Clinton could only dream about. This will buy him some time, lets hope his policies work out.
February 10, 2009 3:33 AM | Reply | Permalink
I think you've got a right.
Clinton was a centerist who was nonetheless successfully portrayed as an extreme liberal by the Republicans. Obama's not going to let that happen to him.
February 10, 2009 7:51 AM | Reply | Permalink
Very well stated - by Mr. Reich and Saladin. The "we'll repeat what Newt did" mind-set they are proceeding with is so simplistic and un-nuanced that it doesn't stand a chance, I don't believe, against Obama's focused, complex and very deep intelligence. And I am hopeful that one by one Republicans of good sense in the House and Senate will realize they can't win that way and step over the line, become engaged -- maybe working for their point of view, and sometimes succeeding (when they have a good idea). But the smart ones aren't going to keep sticking their heads in the sand (and looking for all the world like big a-holes!) for two years.
One huge difference between Clinton and Obama: Clinton has an amazing ability to be *liked* ... but Obama is trusted, by his supporters, by many who didn't support him, and I hope and pray by intelligent members of Congress on the other side of the aisle.
February 10, 2009 8:30 AM | Reply | Permalink
Yes to Mr. Reich and Saladin. The Repbulicans are still thinking they can manipulate Obama the way they do the Democrats in congress. When the part of the country that didn't vote for Obama finally gets it, the repubilicans in congress will blow out there so fast we won't even smell 'em!
February 10, 2009 11:17 AM | Reply | Permalink
Another insightful analysis, Mr. Reich.
The Republicans want to make the Democrats own the economy, so they are doing everything in their power to make the economy worse over the next few years.
Seems to me that Obama has a difficult choice. How much less effective can he allow his economic stimulus to be, just to be able to say he was trying to be bi-partisan?
I would only allow the Republicans to play footsie with me for so long. Then I'd dump 'em and say, "You want us to own it? Then we're going to do it our way!"
Roll back the Bush tax cuts (cost to GDP of only $0.29 per dollar of revenue), and crank up the infrastructure spending (benefit to GDP of $1.59 per dollar spent). And to hell with the Republicans!!
-- ARG
February 10, 2009 10:50 AM | Reply | Permalink
On governing principle, I agree with you.
Unfortunately, as the Senate shows, getting the necessary votes for such a move would be most difficult. Perhaps the Democrats should look at getting rid of the filibuster?
February 10, 2009 11:05 AM | Reply | Permalink
Well, yes, you have a point. With the current numbers, if the Republicans all hang together, they can stop anything with a filibuster.
But the Senate leadership could make them actually mount an old-fashioned filibuster -- that is, take the floor and talk continuously, or else have a vote. And that spectacle would be rather embarrassing, politically, given that polling shows the nation is behind Obama, not the GOP in Congress (not to mention the fact that they couldn't sustain it forever). One or two 2010 Senators could get the idea that they might hang separately, if they don't get on board.
Once the filibuster breaks, the Democrats would have the votes, quite clearly. (Imagine the Dems clamoring for "an up or down vote" on the stimulus plan!)
I think Obama thinks that playing nice will pay off in the longer run. But it seems to me playing hardball is also an option. Obama is smarter than I, so I have to give him the benefit of the doubt. (This isn't the last vote of his presidency, after all. It's the first.)
But the economy is far worse than most people understand, and this watered down stimulus will not be nearly enough. That part worries me.
-- ARG
February 10, 2009 11:53 AM | Reply | Permalink
"Roll back the Bush tax cuts (cost to GDP of only $0.29 per dollar of revenue), and crank up the infrastructure spending (benefit to GDP of $1.59 per dollar spent). And to hell with the Republicans!!"
That may not be a bad idea. The market looks set to go down while Geithner diddles with TARP II, which will freak out the 401k "dumb money" even more--and those worthless tax cuts the Republicans put in the stimulus bill for them will reveal themselves as the chicken feed they are and always were.
They'll be all set to tax the rich and give it to the unemployed--especially if they may become one of them, 1,000,000 or so lost jobs from now.
February 10, 2009 5:48 PM | Reply | Permalink
I think Reich is getting to the essence of the Republican position -- self-conscious obstructionism, as in 93-4. In particular, why oppose half of all the aid to states, including MANY desperate state governments with Republican representatives? The answer is that the strategy of gaining a great foothold (even in the likely event that Repubs cannot capture both Houses in 10, if Obama isn't as devoted to such defeat as was Clinton) at the state level. Creating a disastrous situation (like ballooning deficits) is the essence of RW politics (both directly and in pig-latin, ightray ingway politics). It is the essence of "strategic deficits". It is the essence of everything they do.
Those who rule the world are happy to leave the world in ecological ruins so long as they (one way or another -- including in pig latin) can preside over the ruins. Anticipatory action is taken for the sake of repression, but not to protect nature or the planet or the masses in the economy. That is the essence of Geithner's program in coddling the banks in such INefficient ways; it is the basis for the GOP, it is the basis for goons and cops and creeps and copperheads, and it is the basis of power.
So far, efforts to change these things have barely begun, if that
February 10, 2009 11:20 AM | Reply | Permalink
"That is the essence of Geithner's program in coddling the banks in such INefficient ways; it is the basis for the GOP, it is the basis for goons and cops and creeps and copperheads, and it is the basis of power."
Well, back in the day, Arnie just wanted someone to give him a loan, not a bunch of free money. How do I know it's economically worth it to give Arnie a bunch of free money?
I've seen some pretty godawful local government. I'm wouldn't coddle them either if I were you.
February 10, 2009 5:58 PM | Reply | Permalink
Obama has a little too much confidence in his own personal charm. And that bit him in the ass this time.
February 10, 2009 2:14 PM | Reply | Permalink
It's the "What's the Matter with Kansas" phenomenon writ large. Republican partisans will block Obama when it appears he will succeed and play the culture war card when it suits them and their base will forget how the GOP's policies aren't in their best interests.
Leading us to Palin '12.
February 10, 2009 3:22 PM | Reply | Permalink
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September 12, 2010 11:10 PM | Reply | Permalink