The stimulus narrative has now been set. Consider the opening exchange from Sunday’s McLaughlin Group (the TV was on as I was cleaning out the dogs’ pen on Sunday morning, otherwise I would have missed this — McLaughlin is an awful show lacking in any kind of substance). it focused on the stimulus and on a supposed report from the Congressional Budget Office that John McLaughlin said found that “the majority of funds from the president’s federal injection for public projects, with their many jobs, will not be spent by the end of 2010 — two years, roughly, from now.”
For all federal projects — that includes highways, bridges, schools, et cetera — the total money earmarked is $355 billion; of that $355 billion, $136 billion, 32 percent, spent by the end of 2010 — 32 percent, about one-third of the total.
McLaughlin then put a badly worded and biased question — “Do you agree that the problem with capitalizing the economy through federal money poured into infrastructure rebuilding, the problem is that the process, under the best of circumstances, takes between one and two years; it does nothing for the next 12 months?” — to his largely conservative panel, generating the expected responses:
From Pat Buchanan:
John, that’s just one of the problems with it. No doubt that is a problem. It’s down the road. So it looks more and more like this is just a big permanent expansion of the federal government. Secondly, the thing is beginning to be larded up with pork. The National Endowment for the Arts is coming in for $50 million. Third, the Republican tax cuts are diminishing in size. This is going to be the mother of all pig-outs. It’s losing, quite frankly, that cachet of an immediate, dramatic injection into the economy. And that’s why the markets, under Barack Obama, since his election, the equity markets and things have been tanking. What they are saying is one of two things. Either he ain’t going to get it through — but he is — or this is not going to work or it is not relevant to the economic crisis and the financial crisis this country faces.
Monica Crowly, a “synicated radio commentator,” followed suit:
Well, look, I mean, when we talk about one or two years down the road, look, when the Democrats came in and Obama won the presidency, they talked about having an economic stimulus package on his desk day one. Now they’re talking about mid-February, toward the end of February. They can’t get it together. Why? Because this economic stimulus bill is an epic mess. There are 152 different appropriations in there — nurse training, Medicare, Head Start, weather-proofing your house…. because what we need right now is an immediate economic stimulus that is going to have immediate short-term gains in the exact areas we need it. We do not need pork in there for weather- proofing your house. Okay, we need it targeted. And if it’s targeted with tax cuts, a temporary halt on payroll taxes, relief for businesses, in ways that are not going to blow up this $1.2 trillion deficit as it is — I mean, what we’re talking about now is not economic stimulus. This is a $1 trillion load of pork
running down Pennsylvania Avenue like a herd.
And then there was Mort Zuckerman, of U.S. News & World Report, who offered what he called an alternative to the Obama approach, even though his alternative is included in the Obama plan:
I think it is the wrong — it is a well-intentioned but ill- focused program. Certainly it’s going to go — this recession is going to go on for a long time. And if he has a program that moves as slowly as this, he’s finally going to be blamed for it and he’s not going to be able to lay it off against President Bush. There is another alternative to this kind of capital investment, which is to work through the state and local governments, who have pre-approved programs that can get started right away. It takes it out of the hands of the federal government, and therefore out of whatever their political benefits would be. But that seems to me to be by far the better way to do it and the faster way to do it. It is critical, critical, that we get this jobs program going as soon as possible. This economy is still going downhill at an accelerating rate. And if he doesn’t have a federal program that moves fast enough, he is going to and should be blamed for it.
Only Eleanor Clift, of Newsweek, countered the conservative script:
We are in uncharted territory, and that phrase has been expressed on this show many times. There is a collective feeling among economists from the left and right that a massive spending package is required. And you cannot have the economy digest everything in the first year. Frankly, if the bulk of this is spent in two years and we get out of this in two years, we’ll be ahead of the game.
The problems with this discussion are many. First, the so-called report was nothing of the sort. As the Huffington Post reported on Friday — that would be two days before McLaughlin aired — “there is no such report.”
“We did not issue any report, any analysis or any study,” a CBO aide told the Huffington Post. Rather, the nonpartisan CBO ran a small portion of an earlier version of the stimulus plan through a computer program that uses a standard formula to determine a score — how quickly money will be spent. The score only dealt with the part of the stimulus headed for the Appropriations Committee and left out the parts bound for the Ways and Means or Energy and Commerce Committee.
Because it dealt with just a part of the stimulus, it estimated the spending rate for only about $300 billion of the $825 billion plan. Significant changes have been made to the part of the bill the CBO looked at.
The HuffPost story came after a piece in Thursday’s edition of The Washington Post, which also raised questions about the expanding narrative:
Peter Orszag, the director of the White House Office of Management and Budget, said Wednesday that if House or Senate versions of the bill do not spend the money as quickly, the White House will work with lawmakers to achieve the 75 percent goal. Congress is working on a stimulus bill of at least $825 billion.
In an interview with the Associated Press, Orszag responded to a Congressional Budget Office assessment that money targeted for infrastructure under a House proposal would take years to be spent. He said the issues identified by CBO could be easily corrected.
“There are relatively straightforward changes to increase the spend-out on that part of the bill,” Orszag said.
CBO concluded that only $26 billion out of $358 billion in infrastructure and other appropriated spending would be delivered into the economy by the Sept. 30 end of the budget year. The CBO’s analysis applied only to 40 percent of the overall stimulus bill. Still, Republicans cited the study in pushing for more tax cuts and less spending.
And, still, conservative commentators — like Pat Buchanan on MSNBS this morning — are pushing their misleading narrative.
So much for that liberal media we still hear too much about.
Hank Kalet 