Obama's Legislative Victory Comes at High Cost

FEBRUARY 12, 2009

Obama's Legislative Victory Comes at High Cost

Republicans did well to oppose the spending bill.

By KARL ROVE

Congressional Republicans lack President Barack Obama's bully pulpit and do not have the majorities that House Speaker Nancy Pelosi and Senate Democratic leader Harry Reid enjoy. But they are playing their hand extraordinarily well.

Over the past month, House Republicans have used the stimulus bill to redefine their party, present ideas on how to revive the economy, and force congressional Democrats and the president to take ownership of the spending programs soon to be signed into law.

The first smart move House Republicans made was to raise objections to specific parts of the House stimulus bill. Pointing out that there is money in the bill for condoms, livestock insurance, refurbishing the National Mall, and other outlandish things revealed that it is a massive spending spree, not an economic stimulus.

House Republicans had the wisdom to continue to talk to the Obama White House. This made them look gracious, even as the president edged toward a "my way or the highway" attitude.

They also wisely put ideas on the table, such as cutting the bottom two income tax rates and small-business taxes while extending unemployment insurance and other safety-net provisions. With these proposals, Republicans generated news and made it possible for their members to be for something that made sense to their voters. It also helped that the same methodology that the White House used to claim that the Democratic stimulus bill would create four million new jobs showed that the Republican approach would create six million new jobs, at half the cost.

The payoff is that support for the stimulus bill is falling. CBS News polling reveals a 12-point drop in support of the bill over the past month. Pew Research and Rasmussen have turned in similar numbers. The more Americans learn about the bill, the less they like it.

(Lies lies lies)

SOURCE:http://www.gallup.com/poll/114577/Stimulus-Support-Edges-Higher.aspx)

Stimulus Support Edges Higher, Now 59%

Support up mainly among Democrats; flat among independents

by Lydia Saad

PRINCETON, NJ -- Public support for an $800 billion economic stimulus package has increased to 59% in a USA Today/Gallup poll conducted Tuesday night, up from 52% in Gallup polling a week ago, as well as in late January.

Most of the newfound support comes from rank-and-file Democrats, suggesting President Barack Obama's efforts to sell the plan over the past week -- including in his first televised news conference on Monday -- have shored up support within his own party. Last week, Gallup found 70% of Democrats in favor of Congress passing the economic stimulus package, but today that figure is 82%.

Over the same period, support for the stimulus package held steady among independents, with a slight majority in favor of it. The percentage of Republicans favoring the package rose slightly from 24% to 28%, but remains below the 34% support received in early January, before Congress began its formal consideration of the package.

About Karl Rove

Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy making process.

Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.

Karl writes a weekly op-ed for The Wall Street Journal, is a Newsweek columnist and is now writing a book to be published by Simon & Schuster. Email the author at Karl@Rove.com or visit him on the web at Rove.com.

What is becoming clear is that the House GOP is becoming energized by empowering its "Young Guns." Leader John Boehner has been good. But he wouldn't be as effective if he didn't have the help of Reps. Eric Cantor, the No. 2 House Republican, and Mike Pence, the House GOP conference chairman. Reps. Paul Ryan and Dave Camp, the top Republicans on the Budget and the Ways and Means committees, are impressive and add depth to the leadership team.

Over in the Senate, Republicans have likewise followed a "better ideas" strategy. Mitch McConnell pushed to make aid to states loans, not grants, and to cut income taxes for the middle class. Other Republican senators came in with ideas to fix housing, put money in the hands of taxpayers, and cut fat from the stimulus.

They also asked the Congressional Budget Office if the Democratic Senate bill was actually stimulative. The nonpartisan CBO found it would have a "negligible" impact on jobs by 2011 and hurt economic growth and prosperity over the next decade.

Mr. Obama will get his bill. But it won't be one focused on job creation and stimulus. The bill he signs will create a raft of new programs and be the biggest peacetime spending increase in American history, which will give us larger deficits and create pressure to raise taxes. It will also hinder the president's other goals, such as expanding government health care.

But if Republicans predict economic doom, they will overplay their hand. The Democratic stimulus will slow recovery, but not stop it. Recessions don't last forever and, if history is a guide, sometime late this year or early next the economy will rebound on its own. When that happens, Democrats will argue that their untargeted, permanent spending actually revived the economy.

Americans are skeptical of the notion that increasing the size and cost of government will lead to an increase in jobs and economic growth. A recent CBS News poll, for example, shows that 62% of Americans think "reducing taxes" will "do more to get the U.S. out of the current recession" -- nearly three times the 22% who prefer "increasing government spending." A recent NBC News/Wall Street Journal poll found that 60% of Americans are worried that government will "spend too much" to boost the economy. Only 33% worry it will spend "too little."

The debate here is about means, not ends. Americans and both parties want a revived economy. Republicans want focused proposals that create jobs and growth, while the White House seems ready to accept what House and Senate appropriators have drawn up.

Mr. Obama, for all his talents, has already re-energized the GOP and sparked a spending debate that will last for years. The president won this legislative battle, but at a high price -- fiscally and politically.

Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.

The Destructive Center

OP-ED COLUMNIST 

The Destructive Center

By PAUL KRUGMAN

Published: February 8, 2009

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

Fred R. Conrad/The New York Times

Paul Krugman

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.

On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.

But how did this happen? I blame President Obama’s belief that he can transcend the partisan divide — a belief that warped his economic strategy.

After all, many people expected Mr. Obama to come out with a really strong stimulus plan, reflecting both the economy’s dire straits and his own electoral mandate.

Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts. Why? Because he wanted the plan to have broad bipartisan support, and believed that it would. Not long ago administration strategists were talking about getting 80 or more votes in the Senate.

Mr. Obama’s postpartisan yearnings may also explain why he didn’t do something crucially important: speak forcefully about how government spending can help support the economy. Instead, he let conservatives define the debate, waiting until late last week before finally saying what needed to be said — that increasing spending is the whole point of the plan.

And Mr. Obama got nothing in return for his bipartisan outreach. Not one Republican voted for the House version of the stimulus plan, which was, by the way, better focused than the original administration proposal.

In the Senate, Republicans inveighed against “pork” — although the wasteful spending they claimed to have identified (much of it was fully justified) was a trivial share of the bill’s total. And they decried the bill’s cost — even as 36 out of 41 Republican senators voted to replace the Obama plan with $3 trillion, that’s right, $3 trillion in tax cuts over 10 years.

So Mr. Obama was reduced to bargaining for the votes of those centrists. And the centrists, predictably, extracted a pound of flesh — not, as far as anyone can tell, based on any coherent economic argument, but simply to demonstrate their centrist mojo. They probably would have demanded that $100 billion or so be cut from anything Mr. Obama proposed; by coming in with such a low initial bid, the president guaranteed that the final deal would be much too small.

Such are the perils of negotiating with yourself.

Now, House and Senate negotiators have to reconcile their versions of the stimulus, and it’s possible that the final bill will undo the centrists’ worst. And Mr. Obama may be able to come back for a second round. But this was his best chance to get decisive action, and it fell short.

So has Mr. Obama learned from this experience? Early indications aren’t good.

For rather than acknowledge the failure of his political strategy and the damage to his economic strategy, the president tried to put a postpartisan happy face on the whole thing. “Democrats and Republicans came together in the Senate and responded appropriately to the urgency this moment demands,” he declared on Saturday, and “the scale and scope of this plan is right.”

No, they didn’t, and no, it isn’t.

(SOURCE: http://www.nytimes.com/2009/02/09/opinion/09krugman.html?em)

Funding differences in stimulus bill

The Action Americans Need

The Action Americans Need

By Barack Obama
Thursday, February 5, 2009; A17

By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring.

What Americans expect from Washington is action that matches the urgency they feel in their daily lives -- action that's swift, bold and wise enough for us to climb out of this crisis.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

That's why I feel such a sense of urgency about the recovery plan before Congress. With it, we will create or save more than 3 million jobs over the next two years, provide immediate tax relief to 95 percent of American workers, ignite spending by businesses and consumers alike, and take steps to strengthen our country for years to come.

This plan is more than a prescription for short-term spending -- it's a strategy for America's long-term growth and opportunity in areas such as renewable energy, health care and education.

And it's a strategy that will be implemented with unprecedented transparency and accountability, so Americans know where their tax dollars are going and how they are being spent.

In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive.

I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change. They know that we have tried it those ways for too long. And because we have, our health-care costs still rise faster than inflation. Our dependence on foreign oil still threatens our economy and our security. Our children still study in schools that put them at a disadvantage. We've seen the tragic consequences when our bridges crumble and our levees fail.

Every day, our economy gets sicker -- and the time for a remedy that puts Americans back to work, jump-starts our economy and invests in lasting growth is now.

Now is the time to protect health insurance for the more than 8 million Americans at risk of losing their coverage and to computerize the health-care records of every American within five years, saving billions of dollars and countless lives in the process.

Now is the time to save billions by making 2 million homes and 75 percent of federal buildings more energy-efficient, and to double our capacity to generate alternative sources of energy within three years.

Now is the time to give our children every advantage they need to compete by upgrading 10,000 schools with state-of-the-art classrooms, libraries and labs; by training our teachers in math and science; and by bringing the dream of a college education within reach for millions of Americans.

And now is the time to create the jobs that remake America for the 21st century by rebuilding aging roads, bridges and levees; designing a smart electrical grid; and connecting every corner of the country to the information superhighway.

These are the actions Americans expect us to take without delay. They're patient enough to know that our economic recovery will be measured in years, not months. But they have no patience for the same old partisan gridlock that stands in the way of action while our economy continues to slide.

So we have a choice to make. We can once again let Washington's bad habits stand in the way of progress. Or we can pull together and say that in America, our destiny isn't written for us but by us. We can place good ideas ahead of old ideological battles, and a sense of purpose above the same narrow partisanship. We can act boldly to turn crisis into opportunity and, together, write the next great chapter in our history and meet the test of our time.

The writer is president of the United States.

SOURCE: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/04/AR2009020403174_pf.html

List of spending "cuts" in Senate bill

List of spending "cuts" in Senate bill

After the Senate cut $100 billion out of the stimulus bill, three Republican senators, Olympia Snowe (R-ME), Susan Collins (R-ME), and Arlen Specter (R-PA) agreed to vote for cloture so the bill could come to a vote, probably tomorrow. If you want to know what specific items were changed in the bill to make it palatable to the three Republicans, here is the list.

A list of programs cut (actually reduced proposed allocations) from the House/Obama bill by Senate negotiators, put together by a Republican leadership aide:

$40 billion State Fiscal Stabilization
$16 billion School Construction
$1.25 billion project-based rental
$2.25 Neighborhood Stabilization (Eliminate)
$1.2 billion in Retrofiting Project 8 Housing
$7.5 billion of State Incentive Grants
$3.5 billion Higher Ed Construction (Eliminated)
$100 million FSA modernization
$50 million CSERES Research
$65 million Watershed Rehab
$30 million SD Salaries
$100 million Distance Learning
$98 million School Nutrition
$50 million aquaculture
$2 billion broadband
$1 billion Head Start/Early Start
$5.8 billion Health Prevention Activity.
$2 billion HIT Grants
$1 billion Energy Loan Guarantees
$4.5 billion GSA
$3.5 billion Federal Bldgs Greening

(Smaller cuts -- $10-$600 million)

$100 million NIST
$100 million NOAA
$100 million Law Enforcement Wireless
$50 million Detention Trustee
$25 million Marshalls Construction
$100 million FBI Construction
$300 million Federal Prisons
$300 million BYRNE Formula
$140 million BYRNE Competitive
$10 million State and Local Law Enforcement
$50 million NASA
$50 million Aeronautics
$50 million Exploration
$50 million Cross Agency Support
$200 million NSF
$100 million Science
$89 million GSA Operations
$300 million Fed Hybrid Vehicles
$50 million from DHS
$200 million TSA
$122 million for Coast Guard Cutters, modifies use
$25 million Fish and Wildlife
$55 million Historic Preservation
$20 million working capital fund
$200 million Superfund
$165 million Forest Svc Capital Improvement
$90 million State & Private Wildlife Fire Management
$75 million Smithsonian
$600 million Title I (NCLB)

SOURCE: http://www.politico.com

Job loss: Worst in 34 years Employers slashed 598,000 more jobs in January as unemployment rate climbed to 7.6%. By Chris Isidore, CNNMoney.com senior writer Last Updated: February 6, 2009: 10:46 AM ET NEW YORK (CNNMoney.com) -- Employers slashed another 598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%, according to the latest government reading on the nation's battered labor market. The latest job loss is the worst since December 1974, and brings job losses to 1.8 million in just the last three months, or half of the 3.6 million jobs that have been lost since the beginning of 2008. The loss since November is the biggest 3-month drop since immediately after the end of World War II, when the defense industry was shutting down for conversion to civilian production. January's job loss was also worse than the forecast of a loss of 540,000 jobs from economists surveyed by Briefing.com The rise in the unemployment rate also was worse than the 7.5% rate economists expected. The unemployment rate is now at its highest level since September, 1992. As bad as the unemployment rate was, it only tells part of the story for people struggling to find jobs. Friday's report also showed that 2.6 million people have now been out of work for more than six months, the most long-term unemployed since 1983. And that number only counts those still looking for work. The so-called underemployment rate, which includes those who have stopped looking for work and people working only part-time that want full-time positions, climbed to 13.9% from 13.5% in December. That is the highest rate for this measure since the Labor Department first started tracking it in 1994. More job pain ahead? Some economists are worried that the labor market is poised to get worse still. "This has just begun," said Sung Won Sohn, economics professor at Cal State University-Channel Islands. He projects an unemployment rate rising above 9% by the end of the year, while the monthly job losses could soon top 800,000. "Hiring is falling off dramatically and layoffs are accelerating," he said. "The layoffs have become an almost popular thing to do for corporations. Many businesses are scared. They want to take precautionary steps." January was a brutal month for layoffs, as major companies ranging from Microsoft (MSFT, Fortune 500), Boeing (BA,Fortune 500) and Caterpillar (CAT, Fortune 500) to Home Depot (HD, Fortune 500) and Starbucks (SBUX, Fortune 500) all announced substantial job cuts. Announced layoffs so far this year have already topped 300,000. In addition, payroll services firm ADP estimates that small- and mid-sized businesses trimmed 430,000 jobs in January. "The breadth of job losses now surpasses the prior two recessions," said John Silvia, chief economist for Wachovia. The report showed the already battered manufacturing sector shedding 207,000 jobs last month, while the construction industry cut 111,000 jobs. But it's not just the goods-producing sector that is losing jobs. The services sector, which now provides more than two-thirds of the nation's employment base, also reported widespread losses. Business and professional services, the sector that includes lawyers, accountants and tech services, lost 121,000 jobs. Retailers cut 45,000 workers, while the finance sector trimmed 42,000 workers and the leisure and hospitality sector lost 28,000. The number of temporary workers, viewed as another indicator of business and labor market strength overall, fell by 76,000. Among the only sectors posting narrow gains in jobs were education, health services, and the government. Weak numbers to take center stage in stimulus debate The jobs report comes as the Senate debates the Obama administration's proposal for a nearly $900 billion economic stimulus bill. During a debate late into the night Thursday Republicans and some Democrats questioned the bill's mix of measures and its size. The White House released a statement saying the January report was proof that quick approval of the stimulus bill is needed. "These numbers, and the very real suffering of American workers they represent, reinforce the need for bold fiscal action," said Christina Romer, the chair of the President's council of economic advisers. "If we fail to act, we are likely to lose millions more jobs and the unemployment rate could reach double digits." Brian Bethune, chief U.S. financial economist for research firm Global Insight, said how quickly the stimulus plan is passed, and how effective it is in jump-starting the economy, will determine whether the recent job losses are the peak, or if they continue to climb. He argues that stimulus needs to be for programs that get money into the economy as quickly as possible. "Business confidence is extremely weak right now," he said. "They've taken a show-me-the-money attitude. What you need to stop more job losses is a series of very effective policies. That's the only thing that will help here." First Published: February 6, 2009: 8:37 AM ET