As the House and Senate hash out their differences in the stimulus package and President Obama further bemoans Republicans’ “usual political games,” he should note that his critics extend far beyond the GOP. Democrats, Keynesian economists, and even the editorial pages of left-leaning print media have jumped into the fray, criticizing the stimulus package for its scope and long-term spending commitments that have little to do with stimulating the economy.
The Washington Post calls the package a “confusion of objectives,” and long-term growth goals covering health care, education, and renewable energy “are precisely the problem” and “either won’t stimulate the economy now, is of questionable merit, or both.”
Economist Alice Rivlin, President Clinton’s budget director, told the House Budget Committee in testimony that “what we used to call ‘stimulus’…has been merged into a broader concept of ‘recovery’ and investment in future growth.” She recommended that Congress decouple the “short-term” and “long-term” pieces of the legislation, focusing just on “temporary spending or tax relief priorities” that will “jump-start” the economy.
Harvard economist Martin Feldstein, who initially supported President Obama’s idea for a stimulus plan, is now staunchly against the package, calling it the “$800 billion mistake” and “not likely to do much for employment.”
Public support is shaky as well. According to a recent Gallup poll, only 38 percent believe the stimulus plan should be passed as President Obama proposed it; 17 percent reject it outright.
It’s not hard to see why the concern and negativism. What originally started as a $300 billion stimulus plan has morphed into a mammoth spending bill over $800 billion—that breaks down to over $2,600 per person—and has more to do with jump-starting the President’s long-term agenda for spending programs than jump-starting the ailing economy.
As Congress’s own budget office reports, the plan falls short of the President’s own demand early this year that the package create at least 75 percent of jobs by the end of 2010.
In particular, most of the spending for Obama’s “green” programs will take too long to have any affect on job creation during the recession. According to the Congressional Budget Office, only a speck of the funding for energy programs would be spent by the end of 2010 when new jobs are so urgent; four-fifths of the bundle would be spent long after economists predict the recession will have ended.
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