by Randolph T. Holhut
American Reporter Correspondent
February 26, 2009
IT'S NOT PERFECT, BUT OBAMA'S STIMULUS IS A NEEDED START
DUMMERSTON, Vt. -- Set aside the blather of the political pundits for a moment and let this sink in: On the 24th day of his presidency, Barack Obama recorded a legislative achievement that few of his predecessors had accomplished at any point of their terms in office.
In just over three weeks time, the Obama Administration guided economic stimulus legislation through Congress. With virtually no assistance from the Republicans, President Obama's team pulled off the passage of the most sweeping economic measures since Franklin D. Roosevelt's New Deal.
Sure, there were missteps and miscalculations of the kind that will keep the political pundits' tongues wagging for weeks to come. But in the real world, beyond the Washington bubble, most Americans see it differently. They see President Obama delivering on his promise to marshal the resources of the federal government to lift the nation out of a deepening recession.
The bill he signed into law in Denver last week contains a package of tax cuts and spending that amounts to $778 billion. It may not be enough money - and the legislation does not have everything that is needed for economic recovery - but it is a good start.
According to the Congressional Budget Office, the United States is facing an estimated output shortfall of almost 14 percent of its Gross Domestic Product over the next two years, or around $2 trillion. And the current recession is now dramatically worse than the recessions of 1990-91 and 2001. The U.S. economy has lost 3.6 million jobs in the last 13 months. By comparison, a total of 1.6 million jobs were lost in the 1990-1991 recession before the economy began turning around and new jobs were created. In the 2001 recession, a total of 2.7 million jobs were lost.
Few are paying much attention to what the Republicans in Congress have said about this bill. House Minority Leader John Boehner called it "an act of generational theft." Senate Minority Leader Mitch McConnell called the package "The Europeanization of America." It seems odd that Boehner and McConnell and the rest of the GOP can say things like that with a straight face. Are they hoping Americans forget about the $800 billion or so that's been spent on the U.S. invasion and occupation of Iraq? Or the $1.7 trillion in tax cuts that mostly went to the richest Americans? Or the $700 billion bailout of the bankers and brokers?
As for those conservatives who said we can't afford a robust stimulus package, but were enthusiastic supporters of the Bush tax cut bill in 2001, here's a comparison of the economies of 2001 and 2009, courtesy of the Center for American Progress.
Back in the spring of 2001, when the Bush tax cuts were being debated, unemployment stood at 4 percent, 12.7 percent of Americans lived in poverty, the national mortgage foreclosure rate was 0.48 percent and 17 million Americans relied on food stamps. Today, unemployment is at 7.6 percent and rising, 17 percent of Americans live in poverty, the foreclosure rate is 1.19 percent and more than 30 million Americans are getting food stamps. Yet, we were told in 2001 that $1.35 trillion of tax cuts were critical to the health of the economy by the same people who said that spending $800 billion on economic stimulus won't work.
President Obama said it best at his first prime time news conference on Feb. 9: "What I won't do is return to the failed theories of the last eight years that got us into this fix in the first place, because those theories have been tested and they have failed. And that's part of what the election in November was all about."
The Republicans did what opposition parties are supposed to do. They opposed Obama's ideas. You expect that from a party that believes government can do nothing right. Unfortunately, they had no alternative plan and doing nothing is not an option. Americans know this.
According to a poll released last Friday by the Pew Research Center, 40 percent of Americans say they have been affected by some sort of job problem in the past year - be it unemployment, underemployment, layoffs, reductions in pay and hours or job losses by members of their households. And 56 percent of Americans expect things to be as bad, if not worse, a year from now. Many economists share that view. The national unemployment rate, now 7.6 percent, could be as high as 9 percent by the spring of 2010.
Americans want action. That's why Obama was elected president and that's why, despite the naysayers in Washington, he still has strong support. But in the face of the worst economic crisis in decades. the margin for error for the Obama Administration in the coming months is razor thin.
I just hope Obama's team learned an important lesson. While there's nothing wrong with members of opposing parties putting aside differences and coming to together for the common good, the problem is that Republicans like bipartisanship when Democrats capitulate to them, and scream bloody murder on the rare occasions when Democrats push back.
President Obama and his team must not let the GOP set the terms of the debate in the coming weeks. They need to be steady and disciplined to keep from being done in by a political and media culture that focuses on the "gotcha" moment to the exclusion of everything else. Americans don't want to see their best chance at rolling back three decades of economic neglect fail because of the same old political games.
Randolph T. Holhut has been a journalist in New England for nearly 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com. For extra added thrills, read his ongoing daily blog on The Harvard Classics.