Whether or not the Senate actually ends up voting for the economic stimulus bill this weekend, it does seem the version they will vote on will be the version Sen.Susan Collins has been shepherding through.
The
biggest cut, roughly $40 billion in aid to states, was likely to spur a
fierce fight in negotiations with the House over the final bill. Many
states, hit hard by the recession, face wrenching cuts in services and
layoffs of public employees as they struggle to comply with laws
requiring them to balance their budgets.
In addition to the large cut in state aid, the Senate agreement would cut nearly $20 billion proposed for school construction; $8 billion to refurbish federal buildings and make them more energy efficient; $1 billion for the early childhood program Head Start; and $2 billion from a plan to expand broadband data networks in rural and underserved areas. (Link)
Cutting the aid to states is truly dumb. Just the other day I wrote about the prison system in California and noted the current budget crisis in California.
If you haven't heard, California is bankrupt. The state has a $40B deficit and is barely functioning without a budget; state offices are on a mandatory furlough program (closing two days a month), it's now delaying nearly $3B in payment for services and labor, and will reportedly be issuing IOU's in lieu of state income tax refunds.
A number of other states face similiar circumstances. To cut those funds is a clear indication that the intent for some in Congress is not providing near term economic stimulus but staking out some kind of political claim. Another example of politics over common sense is Sen. John Kyl's support for tax cuts but only if they go towards the wealthy - the group least likely to provide a stimulative effect to the shaky economy. Consider these two positions taken by Sen. Kyl.
Jon
Kyl of Arizona, the Senate's 2nd-ranking Republican said central
elements of Obama's plan such as the $500 dollar tax cut for most
workers would do little to help the economy, just as last year's $600
rebate checks failed to provide a jolt. (Link)
According to today’s Post, Arizona Sen. Jon Kyl is responding by pushing for permanent cuts in corporate and capital gains taxes–neither of which is likely to have much short-term stimulative effect. (Link)
Just more of the same logic used to fool the public into accepting the Bush tax cuts, where the bulk of relief went to the wealthiest Americans. We can now see how that's turned out.
At the end of the day, the proof will be in the pudding, so to speak. Does the stimulus package that's ultimately approved by Congress and signed by the president have the desired effect. The following came from The Daily Dish, and it seems to me a good summary of the current status and the risks for all concerned.
a) no one knows quite what will work for sure;
b)
Obama was elected in part to tackle this crisis and the election was
obviously not a vote to continue the approach favored by the GOP;
c) Obama will be held responsible for the effects of the package, as he should be;
d)
in the context of the current collapse in demand, the distinction
between a "stimulus" package and a "spending" bill seems increasingly
esoteric;
e) Obama did a great deal to try and bring Republicans on board and to allow for a to-and-fro; the GOP, for good or ill, had no interest in cooperating with the in-coming president. They too should be held accountable for this. If the bill fails to make a dent on the collapse of demand, and if it does end up hurting the US through even more debt, then the GOP will be able to make that point in the next election. But if it works, their opposition should be recalled.
f) none of this makes sense if looked at entirely alone. The looming financial reform package must be seen as part of the rescue. If Obama can find a center for serious long-term entitlement reform, then the long-term consequences of more debt in the stimulus bill will be drastically mitigated. Again, true fiscal conservatives will focus on entitlement reform as the balance to this bill - not stupid posturing over trivial issues like pork.
There should be
accountability at the end of all this. If successful at mitigating the
effects of the economy and, ultimately, some success at turning the
economy around, Obama and Democrats should be awarded due credit. At
the same time, those Senate Republicans who opposed the bill should be
held accountable for their obstinance and a trancelike adherence to now
disproven ideological positions that experts believe will have little
positive effect on the current problem.
And it's pretty clear Mr. Obama understands the risks he's taking. He's gotta know this could be his end, and the lasting legacy of a short presidency should he fail.
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