Two important things have happened in the past 24 hours: House Speaker John Boehner failed to bring his debt ceiling bill to the floor because he wasn’t confident he had the votes, and GDP numbers were released, showing anemic economic growth.
With the failure of Boehner’s plan last night, Senate Majority Leader Harry Reid has vowed to bring his debt ceiling bill to the floor. Although Reid’s bill is better than Boehner’s because it wouldn’t produce another hostage negotiation in six months, it would still likely harm the economy.
Given the awful GDP numbers and the Democrats’ increased leverage, they should push for some stimulus measures in Reid’s bill. As Jonathan Cohn pointed out earlier this week, one of the big problems with the loss of Obama’s otherwise awful “grand bargain” is that at least Obama’s deal contained some small effort at stimulus:
As you may recall, the Grand Bargain that President Obama was hashing out with House Speaker Boehner included an extension of unemployment insurance, a renewal of last year’s payroll tax holiday, and some general language promising more funding for highways.
I was no great fan of that deal but I certainly appreciated that provision. Together, those changes would have pumped at least $160 billion into the economy, officials familiar with the negotiations have said. Very roughly, that would have translated to an additional 1.5 percentage points in gross domestic product and one million jobs, according to several economists I consulted.
Deliberately hurting the economy at a time when growth is weak is bad enough — Democrats should take advantage of the moment to ameliorate what harm the Reid bill is likely to cause, by pushing again for the stimulus measures the president sought. Yes, I know that additional stimulus measures would make any compromise even less likely to pass the House, but given the state of the economy, it’s crazy for Dems not to try.