Does Econ Recovery Need More Short-Term Punch?
Time reports some Senators want to pack more short-term punch: “Not helping matters is a report from the Congressional Budget Office which came out Tuesday showing that only 38% of the $350 billion in appropriated funds — which includes $274 billion for infrastructure investments — would make their way into the economy within two years of enactment. While some Democrats defended the study, saying it did not look at large parts of the bill, it was still a topic of some contention at the caucus’ weekly lunch meeting on Wednesday … ‘One thing I think we have to look at is a redirection of some of this money,’ [Sen. Kent Conrad] told reporters tersely after the caucus meeting, ‘to things that will have more of an immediate effect.’ The Senate Appropriations Committee postponed its mark-up of the Senate version until next week after negotiators said they wanted to revisit some provisions.”
Note that the CBO report did not factor in, per W. Post, “$275 billion in tax cuts and nearly $200 billion for jobless benefits, health care for the poor and other entitlement programs [which] are expected to pour cash into the nation’s faltering economy much more quickly.” (Related NYT report: “Growing Need for Medicaid Strains States.”)
Nor did it recognize that the package was always intended to combine short-term and long-term investment, to deal with our fundamental economic problems. Dean Baker yesterday: “Actually, projections showing that spending will not occur until after October 1, 2010 (the cutoff referred to in the article) will still provide a much needed boost to the economy according to CBO. In its baseline scenario the unemployment rate is still projected to be close to 9 percent by the end of 2010. This would mean that any boost to the economy from a stimulus package could still have a useful impact in lowering unemployment.”
Meanwhile, TPM quotes Rep. Oberstar saying mass transit funding was reduced in favor of tax cuts. Krugman responds: “Sad if true.” But Open Left reports (via Blue Mass Group) that Sen. Schumer wants more mass transit in the Senate version.
The Hill reports that House Republicans on the Appropriations Committee
failed to increase the amount of tax cuts by $122B.
AFL-CIO blog announces: “The United Steelworkers (USW) launched a new website, “Make Our Future Work,” to assist workers in coping with the economic crisis and mobilize to put America back to work. The site’s main feature is the USW’s ‘Main Street Recovery Plan,’ released last month, which calls for a major economic campaign to pass a substantial, strategic and sustained economic recovery plan. The site offers strategy suggestions to mobilize your community to fight for an economic plan that creates new, well-paying jobs.”
Will Small Biz Back Health Care For All?
ABC looks at whether the small business lobby will support or oppose Obama’s health care reform plan:
[Small business lobby National Federation of Independent Businesses] wants to protect these small businesses from facing new costs.
There are signs, however, that Obama might be able to assuage their concerns.
During the presidential campaign, Obama proposed requiring large employers that do not make a “meaningful contribution” to the cost of health coverage for their workers, to contribute an unspecified “percentage of payroll” toward a public fund.
Smaller businesses, however, would face no such requirement.
Obama has promised small businesses that he would provide them with a refundable tax credit worth up to 50 percent of what they contribute toward their employees’ health premiums.
Beyond the proposed tax credit, Obama has proposed helping small businesses by allowing them to buy into the National Health Insurance Exchange which would spread risk and lower costs. He also wants to help business by creating a reinsurance system that would cover a portion of the catastrophic health costs they pay in return for lower premiums for employees.
Neither Obama nor his aides have ever precisely defined who would qualify for the exemption. Once health care reform is considered on Capitol Hill, you can expect a fierce lobbying campaign on the structure of the exemption.
But for now, there are signs that the constellation of liberal interest groups which support health care reform will give Obama latitude in structuring a generous small business exemption because they remember the way in which the reform effort fell apart when Clinton was president.
Stop, Baby, Stop?
Reuters reports that Obama may halt Bush’s coastal drilling plans: “An Interior official said the department is waiting for clarification from the White House on whether a proposed draft of a five-year plan to lease areas in the Atlantic and Pacific waters for oil and natural gas drilling can go forward. The preliminary plan would authorize 31 energy exploration lease sales between 2010 and 2015 for tracts along the east coast and off the coasts of Alaska and California … Separately, the Interior official said the department’s plan to develop oil shale fields in the western United States may also be stopped by Obama’s order.”