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Democrats Among Stimulus Skeptics

Video
President Barack Obama met with Republican leaders on Capitol Hill as he seeks support for his proposed economic stimulus plan. Video by AP

House members warn, though, that it will be hard to argue for ambitious undertakings after the stimulus package passes, and that Obama may never again have as good a chance as this to act boldly. "After this initial rush . . . a lot of people are going to begin to wonder about whether we're pushing the limits of our borrowing capacity here, and I'm afraid that when it comes time to do more robust investment . . . it will be 'pay as you go,' " DeFazio said.

The $825 billion package includes $275 billion in tax cuts, more than $300 billion in aid for laid-off workers and budget-strapped states (for food stamps, temporary health coverage, increased unemployment benefits, Medicaid funding, schools and police), expenditures that many economists agree will enter the economic bloodstream quickly and trim further layoffs by state governments.

The administration has sought to address Obama's longer-term goals with the rest of the package. To make the workforce more competitive, the plan includes $15.6 billion in Pell grants for college students, $6 billion for modernizing college buildings and billions more for expanding scientific research.

To start down the road of health-care reform, the package includes $20 billion toward what Obama says will be an eventual $50 billion investment in computerizing medical records to make health care more efficient. Health-care experts welcome the money but worry that the pressure to spend it fast for stimulus reasons could keep the new network from being implemented as effectively as it needs to be to reduce costs.

David Brailer, who oversaw health information technology under President George W. Bush, also noted that there would be few immediate hires for the work, because there is a shortage of people with the needed skills.

The potential savings in computerizing records "are pretty large . . . but they're not available if you just dump computers on doctors' desks," he said. "We thought health-care IT would be done in the context of comprehensive health-care reform, not when we were staring into this chasm. The risk is that we just end up with a bunch of technology and nothing to show for it."

The biggest long-term investment in the package is $50 billion intended to make the country more energy-efficient -- money for weatherizing government buildings and low-income housing; for expanding the electric grid to make it easier to transfer wind and solar power; and for tax credits to encourage the growth of renewable energy.

Energy entrepreneurs have particularly high hopes for a $4.5 billion investment toward a "smart grid," technology that would allow homeowners and businesses to make more efficient use of electricity. Industry insiders estimate that the money, combined with matching industry funds, could deliver the technology to nearly a third of American utility customers.

But they, too, worry that spending rapidly in search of a stimulative effect -- and without sufficiently educating consumers -- could keep the technology from meeting its full potential.

The biggest test of the administration's energy goals may come in spending the billions that have been devoted to states and cities for improving energy efficiency. To get the money out quickly, the plan sends it through a range of programs that are not accustomed to seeing funding on this scale. State energy offices that annually receive less than $100 million combined from Washington are slated to receive $3.4 billion.

In South Carolina, the state energy office is so small that its director, John Clark, answers the phone. He said his office, which receives $1.5 million per year, has put out an urgent call to state offices and school districts for energy-saving projects to use the $35 million he expects to receive. He will also have to advise the state's cities and counties, which have even less experience in big energy efficiency projects and are slated to get $35 million of their own from a separate $3.5 billion block-grant program in the package.

Rep. Jay Inslee (D-Wash.) said that he was heartened by the abundance of energy investments, but that he had been hoping for something even bolder and more transformative, such as more money toward developing lithium batteries for automobiles. He hoped that the package would be followed by further investments, but worried that this may be the last shot for a while.

"We need to think of it as a first step," he said. "The question is: Are we going to step up to the plate to sustain this effort?"

Staff writer Paul Kane contributed to this report.


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