Tag: economy

Don’t expect a stimulus bill anytime soon — or rather, a stimulus bill that does what it’s supposed to do.

A Senate compromise bill expected to win approval Tuesday tilts the legislation away from the kinds of programs needed to soften the economic body blows, keep states afloat and put a little bit of cash in the pockets of middle-class Americans toward the failed policies of the past.

The bill is better than anything we might have expected from the Bush administration, but the compromise reached in an effort to bring several GOP moderates on board makes it far inferior to the lan approved by the House.

From The New York Times:

The price tag for the Senate plan is now only slightly more than the $820 billion cost of the measure adopted by the House. Both plans are intended to blunt the recession with a combination of tax cuts and government spending on public works and other programs to create more than three million jobs.

But the competing bills now reflect substantially different approaches.

The House puts greater emphasis on helping states and localities avoid wide-scale cuts in services and layoffs of public employees.

The Senate cut $40 billion of that aid from its bill, which is expected to be approved Tuesday. The Senate plan, reached in an agreement late Friday between Democrats and three moderate Republicans, focuses somewhat more heavily on tax cuts, provides far less generous health care subsidies for the unemployed and lowers a proposed increase in food stamps.

To help allay Republican concerns about the cost, the Senate proposal even scales back President Obama’s signature middle-class tax cut. The Senate plan also creates $30 billion in tax incentives to encourage Americans to buy homes and cars within
the next year.

Josh Marshall, on Talking Points Memo, offers a pretty fair summary of what happened this week:

So Senate Republicans invoked the threat of a filibuster. And the ‘centrist’ group has leveraged that threat to add more tax cuts that won’t accomplish anything and cut out a lot of spending that would.

John Nichols, in The Nation, sounded a mournful note in considering the trade offs that appear to have won “the votes of two Republican (Maine’s Susan Collins and Pennsylvania’s Arlen Specter) and perhaps another (Mainer Olympia Snowe) that were needed to undermine the threat of a GOP filibuster,” a deal in which Senate Majority Leader Harry Reid “surrendered $86 billion (in) proposed stimulus spending.”

In doing so, the Democrats agreed to cut not just fat but bone, and to warp the focus and intent of the legislation.

The Senate plan is dramatically more weighted than the House bill toward tax cuts (which account for more than 40 percent of the overall cost of the package). This is despite the fact that there is a growing consensus — among even conservative economists and policy makers — that tax cuts will do little or nothing to stimulate job creation in a country that lost almost 600,000 positions in January alone. As French President Nicolas Sarkozy, no liberal, said Friday of countries that opt for tax cuts rather than stimulus: The approach “will bring them nothing” in the way of economic regeneration.

The Senate’s increased emphasis on tax cuts comes at the expense of the aggressive spending in key areas that might actually get a stalled economy moving.

Spending for school construction that would actually have put people to work — while at the same time investing in the future — has been slashed. (Almost $20 billion slated for school construction is gone.)

Money for Superfund cleanup, Head Start and Early Start child care, energy efficiency initiatives and historic preservation projects — all of which create or maintain existing jobs — has been cut. Supplemental transportation funding has been hacked.

The House’s proposal to help unemployed Americans maintain their health benefits has been chopped down.

Ouch. Nichols continues:

In every sense, the Senate plan moves in the wrong direction.

At a time when smart economists are saying that a bigger, bolder stimulus plan is needed, Senate Democrats and a few moderate Republicans have agreed to a
smaller, weaker initiative.

And Republicans are still delaying passage. It could be Sunday, even Monday, before a vote is taken. And who knows what more will be lost — in time and stimulus spending before President Obama signs a bill.

These are the fruits of bipartisan fantasies and the compromises that follow upon them. President Obama, who should have been on television addressing the nation and doing everything in his power to rally support for a sufficient stimulus plan, will be lucky if he gets anything by the President’s Day deadline he set. (Even after the Senate measure passes, a difficult process of reconciling the very different House and Senate bills must take place. Then there will be more votes before any legislation gets to the president’s desk.)

The White House still wants to advance this measure, as do Senate Democratic leaders. And, considering the urgency of the moment, they are probably right to try to do something. But if the final “stimulus package” proves to be insufficient to jump start the economy — and if what is left of public confidence in the prospect of turnaround collapses as a result — this Friday night compromise will be remembered with pained regret.

Early in the morning factory whistle blows,
Man rises from bed and puts on his clothes,
Man takes his lunch, walks out in the morning light,
It’s the working, the working, just the working life.

— Bruce Springsteen
“Factory”

New Jersey once was a manufacturing mecca. Led by the urban northeast, in particular, Paterson, and the cities along the Delaware River, the state made everything from bandages and bologna to wallboard and water pipes.

Those days are over, with a handful of manufacturing plants with large workforces giving way to lightly staffed distribution centers or closing altogether

Among the most recent to go — closing date Feb. 12 — is the Griffin Pipe Products Co. in Florence. The plant, which opened in 1959, manufactured piping used in housing construction.

A report on NJ.com said that the “Illinois-based Griffin Pipe Products Co. announced it would extend a previously announced two-month layoff period permanently, leaving scores of workers without jobs at the Florence plant on West Front Street come Feb. 12.”

Management would not confirm the number of layoffs but a union representative said more than 170 workers were affected.

“This was an extremely painful decision and action to take,” a company statement read, citing the failing housing market and decreased demand for the ductile iron pipe used in construction as reasons for the downsizing. “Our Florence employees are our top priority at this point.”

A small number of workers, fewer than 20, will be kept on to help run the distribution center that will replace the iron pipe manufacturing operation, but even the promise of full-time employment is of little comfort to those losing their original, often well-paying jobs.

Of course, all decisions like this are painful — but far less so for the people making them. The people feeling the pain are the ones who will be forced to look for work next week — some of whom have been at the Florence factory for decades.

“I’ve worked here for 37 years, but now I’m being downgraded and displaced to a lower-paying job,” said John Richardson, a maintenance engineer from Trenton. Due in part to his seniority, Richardson will not lose his job next Thursday like so many, but will take a major salary cut when he moves to the new shipping department.

There is fear among workers, according to the story, though some are hoping that “President Obama’s proposed economic stimulus plan will reignite the country and state’s demand for iron pipes.”

But Mr. Richardson isn’t so sure.

He expresses bitterness toward the company he believes is turning its back on hardworking, longtime employees.

“This company made profits this year, but they’re still closing down. I’ll be here, but some of these guys are not going to make it,” he said. “What would happen if I did get laid off? I’m 59 years old. Who would hire a guy who’s 59 years old?”

And yet, we still don’t have a stimulus plan, because Senate Republicans — and make no mistake, it has been held up by Republicans pushing the false promise of a tax-cut led recovery — refuse to budget. Some cracks may be forming — the two Maine senators, Olympia Snowe and Susan Collins, arguably the most moderate of the remaining GOP members, are working with Democrat Ben Nelson to pare things back, though though it is too early to know what that will mean in practice.

A series of procedural votes Wednesday may offer some hints, but it is difficult to say.

In a series of votes on amendments to the bill on Wednesday evening, Senate Democrats easily beat back a number of efforts by Republicans to vastly change the stimulus measure by stripping out spending programs and broadening the tax cuts.

In a number of those votes, the Democrats were joined by Ms. Collins and Ms. Snowe, as well as Senator Arlen Specter of Pennsylvania and George V. Voinovich of Ohio.

The president is still pushing his plan and is considering a Monday night address should the stimulus remain stalled. He contiues to express a “willingness to compromise,” but he has “warned critics of the stimulus bill that they were standing in the way of his agenda, and he urged Congress to act fast.”

“I’ve heard criticisms of this plan that echo the very same failed theories that helped lead us into this crisis, the notion that tax cuts alone will solve all our problems, that we can ignore the fundamental challenges like energy independence and the high cost of health care and still expect our economy and our country to thrive,” he said.

“I reject that theory,” Mr. Obama continued, “and so did the American people when they went to the polls in November and voted resoundingly for change. So I urge members of Congress to act without delay.”

But, as Big Tent Democrat writes on Talk Left, writes

Fred Hiatt and the WaPo Editorial Board and the typical Beltway “bipartisan” BSers not only feel no sense of urgency — they simply have no grasp of the magnitude of the problem

which really should not be a surprise.

Rome is burning and the Neros of the Beltway insist on fiddling to no effect. Today’s jobs report is expected to show another half million jobs lost in January. But the Beltway wants “hearings.” Disgraceful.

Yes. Disgraceful.

This cartoon from Mr. Fish on Truthdig sums up where we are and where we may be going:

In the House vote, by the way, Congressmen representing the towns covered by Princeton Packet Group papers split, with Democrats Rush Holt and John Adler voting yes and Republicans Leonard Lance and Chris Smith voting no.