JUDGMENT CALLS
Robert J. Samuelson
Economic Politics
Why both parties are behind President Bush's plan
Normally, getting both sides of Congress to agree on anything is a tough challenge. Why then is there suddenly so much bipartisan support for the economic stimulus plan called for Friday by President Bush? In an election year, even a $140 billion to $150 billion plan—equal to 1 percent of the nation's nearly $14 trillion gross domestic product—can appeal to both Republicans and Democrats.
For the moment, no one wants to be seen obstructing a "stimulus plan," and so the president and Democratic congressional leaders stressed that politics should be kept out of something that is clearly political. "[We] can come up with a package that can be approved with bipartisan support," the president said at his press conference. House Speaker Nancy Pelosi later issued a statement saying that "Democrats welcome President Bush's willingness to work together with Congress."
What might a stimulus package include? Economist Nariman Behravesh of the consulting firm Global Insight expects the final plan to have three elements:
- Tax rebates of $1,600 for families and $800 for singles. Presumably, taxpayers would receive checks directly from the government. Depending on exactly who is eligible for the rebates, the cost would vary between $110 billon to $130 billion.
- Investments incentives for business. These would probably be accelerated depreciation allowances permitting faster tax write-offs for new investment. The cost would be about $10 billion.
- More generous unemployment benefits. Payments could be increased, and the length of eligibility could be extended from the usual 26 weeks to 39 weeks. This cost, too, would be about $10 billion.
Without the stimulus, the economy would grow about 1.5 percent in 2008, Behravesh said. With it, growth would be about 2 percent. At a press briefing, Treasury Secretary Henry Paulson said the stimulus could raise employment by 500,000 over what it might otherwise be. Behravesh put the gain at half that size. Consumers, he said, would spend about half their rebates, with the rest being saved or used to pay down debt.
Neither the president nor Paulson, who will lead the administration's negotiations with Congress, spelled out details of a program, saying they didn't want to poison the climate for talks. But differences remain. Unlike the White House, Capitol Hill Democrats have advocated new spending programs; richer jobless benefits might bridge that disagreement. Democrats have also stressed "targeting" tax rebates for the middle class and poor rather than providing them to everyone.
Still, the odds now favor an agreement. If that happens, how will Republicans and Democrats make the economy an issue in 2008? Easy. If the economy avoids a sharp slowdown and recession, Democrats will say they pushed the White House into the stimulus. If the economy gets worse, they'll continue blaming Republicans for the crushing housing collapse. And Republicans? If the economy does OK, they'll take credit for the stimulus package. If it doesn't, they'll attack the Democratic Congress for not making the Bush tax cuts permanent and undermining confidence.
Despite all the nice talk, it's still about who wins in November.
© 2008
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Member Comments
Posted By: eddiewhere @ 01/23/2008 12:49:40 AM
Comment: "Our country is too large to have all its affairs directed by a single government. Public servants at such a distance, and from under the eye of their constituents, must, from the circumstance of distance, be unable to administer and overlook all the details necessary for the good government of the citizens; and the same circumstance, by rendering detection impossible to their constituents, will invite public agents to corruption, plunder and waste." --Thomas Jefferson to Gideon Granger, 1800. ME 10:167
"I consider the foundation of the Constitution as laid on this ground: That "all powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people." [X Amendment] To take a single step beyond the boundaries thus specifically drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition." --Thomas Jefferson: National Bank Opinion, 1791. ME 3:146
We have been fooled by our own government and there is no way any Republican is going to win this election. THE Middle class has had it with all this Bin LADEN terrorist crap. WE are now scared of our own government more than we are of the terrorist because the decisions this government is making on our behalf is not in our best interests and it is killing us. The government is now dominating our civil liberties. They are giving the states millions for Real ID Cards. This is just the start of government intrusion. Combine this with the misuse of the Patriot Act and the future Plans of insurance comPanies and corporations to have full access to our personal records and we have a real crisis.
Credit Card companies have already started selling and sharing our personal information with the private sector. We really have to wake up and protect our constitution it is all we have to defend ourselves against interests that become too rich and powerful in this country. The government keeps expanding and is being predominantly controlled by special interest and lobbyist. The middle class is being weakened and our civil liberties are being threatened. Real ID Cards will not make "us safer" infacat terrorists can obtain fake ones and move about freely. The American people did not vote on Real ID Cards, we need a vote. Our constitution would have to be ammended in order for Real ID's to become legal. I do not know what has happened in Washington but it is getting out of hand. They know what they are doing is unconstitutional so they are trying to bribe the states by offering them money. I hope every state agrees with me and Prevents the federal govenment from imPosing and unconstitutional law. If the states allow the government to do this then they would have set a bad Precedent that could lead to further government violations.
Posted By: eddiewhere @ 01/22/2008 9:19:36 PM
Comment: Listen to Bush's upcoming state of the union address. Look and listen carefully. Is he avoiding detail, is he camaflouging his real agenda. Can he really make you believe that he will leave no child behind again, How many times can one nation be foolded. Think about all the bankrupt people sitting at home, those in debt, those without healthcare, and unable to afford education watching his speech. Their probably wondering how they could have been suckered into voting for this guy.They did not listen and we all know many of them voted for Bush in two thoudand four. OBAMA/.Hillary for president.
WHY CAN'T WE SEE THAT THE PeoPle Profiting from the war are haPPy with the status quo. WHo are these PeoPle,
Private Contrators who lobbied the RePublican adminstration
Cheney/ Halliburton who Provided billion dollar contracts to selected firms.
These caPitalists decided to unite and Profit in Iraq, Build a new economy in Iraq where the oil comPainies, caPitalists that suPPort the Bush Administration, War Profiteers and other Private comPanies could all make Billions at the tax Payers exPense. HERE"S THE proof, keep in mind this is just the tip ot the ice berg
Cheney's stock options which were worth $241,498 a year ago, are now valued at more than $8 million-- for an increase of 3,281% . Cheney has pledged to give the proceeds to charity. Cheney continues to receive a deferred salary from the Halliburton. He was paid $205,298 in 2001; $162,392 in 2002; $178,437 in 2003; and $194,852 in 2004.
Halliburton, has already raked in more than $10 billion for work in Iraq, and was handed some of the first Katrina contracts. The company has been criticized by auditors for its handling of no-bid contacts in Iraq, and there have been numerous allegations of over charging for services. Auditors found the firm marked up meal prices for troops and inflated gas prices in a deal with a Kuwaiti supplier. The company also built the American prison at Guantanamo Bay. "It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it. Lautenberg???
They even "pimped" our troops. ENOUGH IS ENOUGH
Do you think Bush and Cheney care that we are spending billions in IRAQ, NO. THis is why they hated the CLINTONS. THE CLINTON"S ACTUALLY USED TAX payer money to help the middle class and all AMERICANS.
Posted By: lovo del norte @ 01/22/2008 1:37:26 PM
Comment: SO MUCH FOR THE SUPPORTERS OF THIS WAR, WHAT ELSE DID OUR PRESIDENTIAL CANDIDATES VOTED FOR? YOU GUYS OUT THERE MAY WANT TO DO SOME RESEARCH AND SEE WHAT THEY SUPPORT BEFORE YOU COMMIT YOUR VOTE TO ANY OF THESE GUYS. ASK YOURSELVES: WHAT KIND OF AMERICA WE WANT IN THE NEAR FUTURE? AS FOR MYSELF IT DEFINETLY HAS BE FOR SOMEONE THAT IS AGAINST ALL WARS.