Even as it slugs its way through the Senate, few doubt that President Obama's massive economic stimulus package will soon reach his desk and be signed into law. When the dust settles, Obama will have finally pushed through his first major piece of legislation of his young presidency.
Yet the real political victory, if one wants to call it that, belongs to the Republicans. Between its introduction and passage, Republicans successfully undermined public confidence in the bill by adopting the old adage, "the devil is in the detail" and making sure to give Obama hell every step of the way. In an $800 billion-plus spending program, there were bound to be a few low hanging fruits. They nitpicked the smaller, million dollar items that amounted to, as Obama observed on Anderson Cooper on CNN, "less than one percent of the total package."
Nevertheless, the strategy worked. Rasmussen Reports revealed declining public support for the bill as it muscled its way through the House and into the Senate. The 45% that initially supported the plan slipped to 42% a week later; to just 37% in the final week. A CBS poll found support slipping from 63% a month earlier to just 51% last week. Even world markets posted mixed results when the bill passed the House, with Asian markets rising and European markets falling.
In recent days, Obama has taken the offensive with town hall meetings and a prime time press conference, even an appearance on Telemundo, trying to restore public confidence in the bill. But it appears he is waging a losing battle. At this point, even global markets, which once desperately awaited the significant infusion to the American economy, are now taking a wait-and-see attitude.
Veteran Democrats like Senators Charles Schumer (D-N.Y.) and Dianne Feinstein (D-Calif) accused Republicans of the same old partisan tricks in opposing the bill so overwhelmingly. Obama should consider this "an early lesson," said Schumer. He didn't explain why no Democrat thought it necessarily to warn Obama in the first place.
Republicans, meanwhile, savor their victory. Should the bill succeed in creating "between three and four million new jobs," as Obama hopes, they can insist the economy was recovering anyway; the bill simply amounted to a free government handout. And, in fact, there are indications that the banks are lending money again and the real estate market is bottoming out. Should the bill fail, they can say they told us so.
But the truth is that no one really has a clue to whether the stimulus package will work. The dramatic, unprecedented twists and turns of modern financial markets continue to catch even the most brilliant economists flatfooted, forcing them to throw away the playbook and draw up new rules almost every day. For all anybody knows, like the common cold, the sick economy might simply run its course and emerge healthier than ever before, with or without the bill.
Yet, everyone agrees that public confidence in the economy is an important ingredient in any recovery scenario. Should the markets continue their downward spiral, Republicans - having successfully tarnished initial enthusiasm for Obama's stimulus package - must wonder whether their political victory came at a price far greater than they might have been willing to pay.
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