Economic Stimulus Bill: Sound Policy vs. D.C. "Bipartisanship"

I appeared on Rachel Maddow's MSNBC show last night at the top of the show to discuss the legislative wrangling over the economic recovery package - and why Democrats seem so interested not in passing the bill, but in attracting the majority of the Republican Party to support it. You can watch the clip here.

Rachel and I discussed a question that I asked a few weeks ago: How much should taxpayers have to pay for political aesthetics? As I noted back then, the Obama administration concedes to reporters that it could pass an economic recovery package right now, without making any policy concessions to Republicans, such as substituting more tax cuts for more infrastructure spending. And yet, Obama and Democrats are doing just that - making concessions to Republicans in hopes that a majority of Republicans will support the final bill. And so again, how many billions of dollars in inefficient tax cuts must taxpayers be forced to finance in order to help Obama attract extra Republican votes that he doesn't actually need?

What's so bad about this question even being on the table is that since I wrote my original post, Republicans themselves have publicly acknowledged that Democrats do not have to make any concessions to them in order to pass the bill.

As the Boston Globe reports:

With diminished minorities in both chambers, Republicans are unlikely to find the votes to block the bill. In the House, there are enough Democrats to pass it without any additional support. In the Senate, Republicans could derail the bill, but only if united; two Republicans crossing over to support Obama would allow Democratic leaders to thwart a filibuster.

"Most of the Republican caucus has acquiesced to the political reality that the stimulus is going to happen," said strategist Phil Musser, who has advised Republicans in both the House and Senate. "The question is how much political support it's going to happen with."

"There's widespread consensus here," the Senate minority leader, Mitch McConnell, said Friday at the National Press Club. "Everybody believes that government action is necessary, and this is coming out of the mouth of somebody who doesn't normally advocate government action as the first resort."

So, let's review all the verifiable facts:

FACT: Economists on both the right and left agree that spending on infrastructure is a better guaranteed way to create jobs and stimulate GDP growth than enacting new tax cuts.

FACT: Top congressional Democrats acknowledge that spending on infrastructure is a far better way to stimulate the economy than tax cuts.

FACT: Even top Republican pollsters acknowledge that the public strongly supports prioritizing robust spending on infrastructure over more tax cuts.

FACT: The Obama administration acknowledges that it can effectively pass whatever economic recovery package it wants - including one that is robustly progressive in seriously prioritizing spending on infrastructure over tax cuts.

FACT: Senate Republicans and Republican Party strategists acknowledge the same thing that the Obama administration acknowledges: Namely, that Democrats have the political capital to pass almost anything they want.

FACT: Despite this reality, Obama has both pushed Congress to add conservatives' ineffective tax cut proposals to the recovery bill, and reduce funding for job-creating transportation infrastructure in order to fund new tax cuts.

FACT: House Republican leader John Boehner says House Republicans are opposed to the stimulus, unless it is loaded down with corporate tax cuts.

FACT: Next to George W. Bush himself, House Republican leader John Boehner is the single most irrelevant individual in American politics when it comes to this economic recovery package. Why? Because House rules do not permit a filibuster, and therefore the Democratic majority can pass whatever it wants in the House.

FACT: Despite John Boehner's stunning lack of any political power or relevance, both the media and top Democrats continue to act as if he has near-veto power over the economic recovery package. The Huffington Post notes that the Beltway media is breathlessly reporting on Boehner's every declaration, and - for some odd reason - President Obama is spending time meeting with Republican House members, trying to get them to support an economic recovery package.* Again, this is happening despite Boehner and House Republicans having absolutely no actual legislative power to shape the stimulus package.

OK, so knowing all of this, we get to the key question: Why do Democrats seem more interested in attracting majority Republican support they clearly do not need than in passing a bill that uses taxpayer money most effectively to stimulate the economy?

As I told Rachel, my guess is that it has something to do with Obama wanting Republicans to join him in politically owning the economy. That is, he likely believes that if most Republicans end up voting for the economic stimulus, that somehow means they won't criticize him when the economy continues to (inevitably) falter in 2009.

What this misunderstands, of course, is that Obama is not a senator anymore - and that means he can't dodge political hot potatoes like the economy. Whether he likes it or not - and whether Republicans vote en masse for the stimulus bill or not - he will soon be the one who politically owns the economy. Fair or unfair, that's just how it works in American politics - the president gets the credit and blame for the economy's success and failure.

Knowing that basic Political Science 101 reality, it seems to me that the smarter course of action is to make sure the economic recovery package is structured as effectively as possible to make sure every single dollar is best used to boost the economy. The better the recovery package is - the more direct spending it includes on proven job-creating programs - the more likely it will be to boost the economy, and thus, the more likely Obama will be to get credit for that economic success. Alternately, the worse the recovery package is - the more it is loaded down with ineffective tax cuts - the less likely it will be to boost the economy, and the more likely Obama will be to get the blame for that failure, whether Republicans voted for it or not.

This is the Republicans trap - and it is pretty smart political strategy. They get to advocate for policies that appease their base and satisfy their corporate donors. If they succeed in getting those policies amended into the stimulus bill, they will help sabotage the effectiveness of that bill and then have a perfect attack point with which to bludgeon Obama on the economy. If they fail in getting those policies amended into the stimulus bill, they will be able to say that's the reason the economy is not doing well in 2009. And one these outcomes are guaranteed, whether they vote for the bill or not.

What's not guaranteed is the effectiveness of the strategy - that's up to Democrats and Obama. If they fall for the trap and they continue watering down the bill with the very right-wing tax cuts that the public rejected during the 2008 election, they will make the GOP strategy look brilliant. But if they stop playing games with an opposition that just got drubbed in the election - and if they pass a robust spending plan without regard to how many extra GOP votes they get - they will at least hold out the possibility that the recovery package will ultimately boost the economy (and thus their political support), if not in 2009, then soon after.

The problem may be the deeper conflict between Obama's two key sets of campaign promises. On the one hand, he promised a huge agenda of new progressive spending. On the other hand, he promised bipartisanship. As we are seeing, those two goals create a fundamental conflict - not in the country at large, as polls show, but in Washington, D.C., where the term "bipartisanship" has little to do with true bipartisanship among the American public. The Republican Party in Washington - despite polls and the election mandate - simply will not agree to support the kind of robustly progressive spending that Obama campaigned on.

Thus, Obama has to choose between his campaign spending promises and his odes to bipartisanship - and unfortunately, it looks like he's trying not to make a choice at all. He's proposing a plan that tries to split the difference between GOP-backed tax cuts that Democrats acknowledge are ineffective, and progressive spending proposals. Policy-wise, the net effect is a weaker stimulus package than the moment requires. Politically, the effect is to help resuscitate a Republican Party and conservative movement that should be left to wither away. Indeed, the only way the GOP can claw itself back to political relevance is to garner attention from Obama and the Democrats - and sadly, it seems Obama seems intent on helping the GOP get back in the game.

As I told Rachel in concluding our interview, this situation is particularly sad from a historical perspective. If Franklin Roosevelt's main concern during the Great Depression was getting the majority of the Republican Party to support his proposals, we probably wouldn't have Social Security. Same thing for Lyndon Johnson during the 1960s - if he was primarily worried about getting GOP support for bills he signed, we probably wouldn't have the era's landmark civil rights laws nor Medicare.

I'm not saying that bipartisanship shouldn't be welcomed - but I am saying it shouldn't be the first and foremost goal.

Bipartisanship should come as a welcome - but, at this moment of wide Democratic majorities, legislatively irrelevant - product of good policy. It shouldn't be the other way around. Policy shouldn't be crafted first and foremost to garner Washington's faux bipartisanship, because at least one half of that bipartisan equation - congressional Republicans - aren't interested in representing any kind of public consensus. They are, in a sense, legislative terrorists, and as our government always tells us, you can't negotiate with terrorists. When you do, what happens is that good policy is sabotaged into mediocre or bad policy - all in pursuit of meaningless political aesthetics (And the good news is that at least some congressional Democrats get this and are pushing amendments that move the economic stimulus bill in a far more progressive direction).

Last I checked, nobody remembers by how many congressional votes our nation's greatest statutes passed into law. What we remember is the policy. To subvert that policy in pursuit of the image of bipartisanship and praise from the Beltway media is to waste this real but fleeting window of opportunity.

* UPDATE: Some good breaking news - word just off the newswires is that Obama told House Republicans he's not giving in to more tax cuts. That's great - although I still think Obama shouldn't be spending any of his time - and political capital - helping House Republicans seem even vaguely relevant.

Comments

[huffy2001]

Brilliant analysis. I hope the WH is listening. I sent this link to them from WhiteHouse.gov. Perhaps more people could do the same.

Personally, I wouldn't mind seeing Boehner bury himself so deep he never recovers. I truly loathe him.

[Wombaticus]

It's important that Obama been clearly seen as the guy with his hand extended in cooperation, and that the GOP is seen turning away from it. All this at a time of national crisis that is unarguably the legacy of the GOP policies.
Next time, I don't think the hand will be extended.

[RebelWithoutAPause]

I wholeheartedly agree with David Sirota. While I acknowledge President Obama's warnings of setbacks and false starts and admire his wisdom and courage for at least TRYING to be partisan, the trap being set for him by Republicans and their Lord Limbaugh is one setback and false start that the President can most definitely avoid.

When you're dealing with intractable adversaries hell-bent on regaining power at all costs so that they can continue to ram the failed policies of the last eight years down our collective throats, then it's time for President O to "take off the kid gloves" and do what he's got to do to get this country back on track again--and to hell with the pipe dream of "Washington bi-partisanship"

[Oldchef]

The Senate should take the Republican tax cuts out of the stimulus package and replace them with infrastructure projects. Talking heads are saying there's not enough shovel ready projects to do the job, but I can see at least a billion dollars or two of projects here in my little state of Delaware, so I think that argument is total horseshit. Having reached out to Republicans this week and been totally rejected, the time is now to go ahead with what's right for America and shame the Republicans for their obstructionist stance. Us working class folks are getting seriously upset about some of the grandstanding on the part of politicians when there's people starving out here, losing jobs, home and health.

[MangoMom]

I'm in the final chapter of Robert Kuttner's book, The Squandering of America, which makes clear the policies that have led to the present state of the economy. President Obama must absolutely ignore the trap Republicans are setting for him. He reached out to them and their response was a lock-step vote to disembowel the stimulus bill. They have had eight years of virtually total control of the economy and political life of this country with near-disastrous results. They apparently don't give a damn! The president should ignore them and do what is right; Democrats in the House and Senate had better do what is needed rather than what is expedient.

[mjc]

Think all that is really left of the GOP's "political base" IS the corporations and pundits like Geo Will and Rush Limbaugh. The stimulus package was indeed a Democratic triumph; they just need to acknowledge that. The Republican Party has no principle they can offer American voters that wasn't burned down in the Geo Bush administration so being anti-Obama is their rallying cry. Can they wail about bipartisanship? Probably not, unless stupidity has gone a lot further than most of believe. They might have said that they were the party of government which governs least is the best government, but Geo Bush's administration proved that under Republicans the bigger the government the better to fight wars, the better to whittle away civil rights, the better to spy on Americans of every class, the better to ignore any communality with the rest of the world. Tax cuts which the GOP supported as we went to war....an almost unheard of propositio­n....are now seen by them as a "STIMULUS"? Too many Americans, without jobs or retired, don't actually pay much in taxes unless they own a house which isn't a federal source of tax dollars. Most of us have their name and number; forget about the GOP.

[pecospedro]

Why do Democrats want GOP support for the "stimulus package"? Are you real? A cursory examination of the bill which passed the House yesterday reveals it won't stimulate diddly, but it will sure expand government. When it fails to help the economy, an all but certain outcome, the GOP will be thankful they cannot be blamed. That is the cover Obama and his cronies want desperately.

[idest]

"A cursory examination of the bill which passed the House yesterday reveals it won't stimulate diddly" - An assertion not backed up by any supporting evidence or testimony is worthless. Lots of people with more economic expertise than you have examined the bill in depth and come to a different conclusion.

[AltonEDrew]

Mr. Obama made a promise to the electorate that he would bring some change to how politics in DC works and the pursuit of bipartisanship is a part of that. I don't expect the pursuit to be fruitful most times but I expect that Mr. Obama will keep his word on making that attempt all the time. Any political mileage he gets will result, at least in the short run, from the public perception that he tried to reach out to Republicans.

If anything the real cover he gets is not from avoiding the responsibility of the economy but building a buffer between him and the Democratic leadership. The 2008 elections have made Boehner politically non-relevant which is all the reason for Mr. Obama to feed Boehner's ego. Make Boehner bigger than he is and manuver Boehner between the Democrats and the President. This has already begun to work with the Republicans saying consistently all this week that while they appreciate Mr. Obama attempts to reach out to them, it is the Democratic leadership in the House that is causing problems.

If there has been an error on Mr. Obama's part, it has been letting the House Democrats go a bit too far. He will have to use his political capital at some point to get a reasonable package before the American people.

Alton E. Drew
www.altondrew.com

[derik]

Case in point, when the TARP$ were flowing last year, many of the recipients were doing a bunch of pre-TARP spending to get their balance sheets to be looking real bad. I know I was generating millions of dollars worth sales for technology and services for these very same TARP recipients last year. In fact, the people I know were doing the same. I believe, collectively this group of people pulled in around $30b worth of "lets spend it while we can" sales. Now, it appears all those people are without jobs too (myself included). wow, what an education I have had since September 2008 on how organizations work. It is incredible.

[derik]

I have read the stimulus plan in detail. It is a multi-agency bill. The oversight appears to be less than optimum. After all, we do need oversight and governance across all these agencies.
Another point, as such investments flow to the economy (the bill's goal was to save/create jobs), it seems that there are now many companies laying off people before the bill passes. Strange how all this heated up. In my opinion, it makes sense that some wording be included that the money not flow to companies (directly or indirectly) that "magically" started some heavy job cutting in these last few weeks. hmm, maybe have a stopper for any cuts since Jan 20th makes sense. Or maybe require full disclosure of job cuts in the last 3 months or something. My take is that many companies cutting jobs as we speak before the bill passes (in whatever modified form) are going to take the money and run. They will run the money and create jobs overseas. And we will have invested and not have the US job creation levels we need to make it through this meltdown. This is in many ways, a time where those business that did not cut jobs could really use this money to compete against these job cutting companies run by crooks. In my opinion, we should create jobs here first that indirectly creates jobs overseas. After all, globally we can have economies that flourish.

[sanfranciscofeet]

I hope this fight over the Stimulus Bill will help Obama wake up to reality and throw his Bipartisan dream out the window. :"You can't negotiate with terrorists. " With this GOP crowd, it's their way or the highway. You have to admire their balls, even if their philosophies are so wrong for America. I wish Democrats had half their courage.

[joedabear]

Obama is the major one touting bipartisanship.
Don't you get it?
There is an old saying."Gi­ve them enough rope and they'll hang themselves".
I think it's brilliant.

[TheBaffler]

Democrats are so addicted to caving in to Republican demands that they do so even when it isn't necessary.

Bipartisanship: Democrats making concessions for nothing in return.

[paixa3]

David. To answer your question in the head line. Stupidity?

[Doofus]

The politics of this matter are very complicated, no? It doesn't really
turn out to be 'Demos good, Repos bad', much as we'd all like it to.

As even a noodge like Jim Cramer says, what's called for is
'Big Dig'-like public works projects in every major city in the
country, and that *might* get the economy moving. That's
probably about $50-100B per city. That's NOT pumping out
some tax-rebates like last time, which worked about like
confetti.

But the economics is desperately complicated. To the
extent that arguing about the associated 'politics' at this
point is down-right silly.