New Poll: Strong Support for Public Investment
The latest NBC/WSJ poll finds big support for public investment to get the economy back on track, mixed with an undercurrent of concern about spending too much. (Tell Congress: Pass Econ Recovery NOW!)
63% say “government spending that will help create jobs” is more important than tax cuts.
57% agree that the economic recovery plan is “a good idea because it will help make the recession shorter, get people back to work, and provide money for transportation, education, and Medicaid programs.”
89% support “creating jobs through increasing production of renewable energy and making schools and public buildings more energy efficient”
85% support “creating jobs through building or repairing roads and bridges”
76% support “providing aid to states for Medicaid and educational programs to avoid cuts to these programs”
65% support “expanding government-assisted health insurance coverage and unemployment benefits”
The Reaction notes:”Even most Republicans (68%) are willing to give spending a chance.”
But a sizable minority of 46% express concern about Obama “spending too much on the economic stimulus program” and 61% see the budget deficit as “a real and important number that has a direct affect on the average citizen,” suggesting more work to do to explain that deficits can be manageable and desirable.
Incoming Obama budget chief seeks to tamp down that undercurrent with transparency, as TPM reports, “Stimulus Bill Contracts Are Going Online.”
Meanwhile, Digby warns, “More bipartisan establishment institutions [the Pew Charitable Trusts and the Committee for a Responsible Budget] join with Pete Peterson to give the Republicans and the Blue Dogs excuses to ensure that the government can’t do what’s necessary to stave off a depression … if you think that this is about anything but destroying social security, think again.” (Tell CNN: balance anti-investment propaganda with equal time for pro-investment views.)
Consider the Evidence on deficit spending: Is there a Keynesian free lunch with respect to government revenues? The idea is that heavy government expenditures and/or large temporary tax cuts will increase demand and thereby invigorate the economy. This will produce larger tax revenues several years down the road than would otherwise have been the case, helping to offset the deficits incurred now. This seems plausible. But it sounds suspiciously similar to the claim made by ‘supply-side economics’ advocates: a reduction in tax rates will increase investment and hence growth and thus government revenues … One distinction [is that the] Keynesian version I’ve seen suggests that a large government deficit will be partially recouped by the resultant spur to economic growth…”
To that end, Sen. Durbin appears to be preparing for tax increases on the wealthy in 2010. The Hill: “Congressional Democrats, faced with skyrocketing budget deficits and the worst recession in decades, must decide by 2010 whether to extend a number of major tax cuts set to expire that year. … ’2010 will be a year of reckoning when it comes to taxes,’ said Senate Majority Whip Dick Durbin (D-Ill.), who noted that rising deficits would force leaders of his party to make tough political decisions. ‘It won’t be easy.’”
Congress Continues to Modify Obama Plan With Fewer Biz Tax Breaks
USA Today reports less tax cuts, more public investment: The economic stimulus plan taking shape in Congress could cost as much as $850 billion but probably won’t include President-elect Barack Obama’s proposal for a job-creation tax credit, Sen. Charles Schumer, D-N.Y., and other top Democrats said Wednesday … Schumer and other congressional Democrats said they will seek to add spending to the plan, arguing that government projects such as school construction will help pull the economy out of its nosedive.”
W. Post sees Dems replacing biz tax breaks with Alt. Min. Tax reform: “… the stimulus package is expected to include at least $300 billion in tax cuts and nearly $550 billion in domestic spending … In place of [some] business credits, Democrats expect to include a ‘patch’ for the alternative minimum tax, a provision meant to prevent upper-middle-class wage earners from moving into a higher tax bracket. … Estimates peg the cost of this year’s AMT fix at $70 billion…”
More details from W. Post: “In the Senate, Sen. Charles E. Schumer (D-N.Y.) has won support for a college tuition tax credit that could cost more than $10 billion … Yesterday, Democrats on the House Appropriations Committee privately reviewed the spending plan, which sources said includes $80 billion in funding to states for education programs and about $90 billion for Medicaid assistance. The proposal also includes about $85 billion worth of infrastructure spending, most for highway and bridge construction. It would also increase funding for unemployment insurance and food stamp programs.”
LA Times sees GOP betting against Obama plan: “Obama had hoped to induce Republicans to back his plan by putting forward a series of business tax cuts. But GOP support is peeling off as the party crafts alternative ideas that rely even more heavily on tax reductions. Obama’s stimulus package is on track to pass before the Presidents Day recess in mid-February. But it is increasingly doubtful that he will pick up the 80 Senate votes he had hoped to win in the first major legislative test of his presidency. Instead, the bill is likely to pass on the strength of the Democrats’ majority.”
Wonk Room’s Pat Garofalo trashes House conservatives’ alternative stimulus plan: “as stimulus outlines go, this is spectacularly bad. It couples the ineffective tax cuts of previous proposals with a completely destructive spending reduction that would only exacerbate the economic crisis.”
Children’s Health Insurance Expansion Sails Through House
W. Post: “The House easily approved an expansion of government health coverage for low-income children yesterday, a top priority for President-elect Barack Obama and the first in a series of stalled measures expected to move quickly through the Democratic Congress as President Bush leaves office. Obama hailed the 289 to 139 vote and nudged the Senate to act with the “same sense of urgency so that it can be one of the first measures I sign into law when I am president.”
NYT: “The Senate Finance Committee is expected to approve a similar bill on Thursday, with action by the full Senate to follow quickly.”
FiveThirtyEight analyzes: “Does the bill’s improved performance this time around simply reflect the additional seats that the Democrats have gained in the Congress? Or have minds actually been changed by Obama or the broader political environment? The answer is a little bit of both.”
Chamber of Commerce Prez Lists Wavering Pro-EFCA Senators in W. Times interview: “‘They knew as well as I knew that there was no way that could get close to 60, so it was a free vote for them to cast,’ Mr. Josten said. ‘It will not any longer be considered a free vote by the business community.’ He said Sen. Arlen Specter of Pennsylvania, the sole Republican to vote to advance the bill in the last Congress, is looking for a reason to oppose it this time. Mr. Josten also said there were a half-dozen Democrats whose votes are not guaranteed for the bill as written: Sens. Mark Warner of Virginia, Mark Pryor and Blanche Lincoln of Arkansas, Thomas R. Carper of Delaware, Mary L. Landrieu of Louisiana and Ben Nelson of Nebraska.”
Auto Rescue Update
W. Post checks in on labor-management talks following the auto rescue: “…union leaders at GM — and at Chrysler, where parallel discussions are underway — might not be in a hurry to reach an agreement. Some are hopeful that the incoming Obama administration will … rescind the requirement that worker compensation be reduced.”
Dean Baker slaps the W. Post for not focusing on exec comp: “The Post has virtually ignored the much larger gap between executive compensation at the Big Three and at the transplants. While top executives at Japanese manufacturers like Toyota only earn around $2 million a year, executives at the Big Three can earn 10 times this amount. This would seem to be a reasonable focus for those concerned about making the U.S. industry competitive.”
Change In the Congressional Climate?
The Green Grok scratches head over Pelosi’s cryptic climate comments: “The new [House committee] leadership also seems to indicate that the 111th Congress is serious about getting climate legislation done this session. But Speaker Pelosi is giving mixed signals. Last week she indicated that despite enough support in the House to move a cap and trade bill, the House should proceed with caution. ‘I’m not sure this year, because I don’t know if we’ll be ready,’ Pelosi told reporters at the Capitol. ‘We won’t go before we’re ready.’ … Perhaps most strange about her remarks was the word ‘mysterious’: ‘Of all the bills that we have done, you know I sort of know the policies, I know what the possibilities are, this is the most, should we say, controversial, not controversial, mysterious.’ Should be an interesting session. I love a good mystery. Anybody want to hazard a guess as to when climate gets on the congressional agenda?
Grist’s David Roberts throws cold water on Charles Krauthammer’s gas tax increase proposal: ” I certainly don’t want to come off as saying a gas tax is a bad idea because a turd like Charles Krauthammer supports it … And I sincerely don’t think it’s a bad idea — it easily clears my better-than-nothing bar. But does it amount to a serious climate/energy solution? Those who welcome the new conservative ardor for gas and carbon taxes should be very, very careful about who they empower, and how, and what political dynamic results.”