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The Stimulus Debate That Matters

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President Barack Obama is calling the economic slump a 'continuing disaster' for America's families. Video by AP

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By E. J. Dionne Jr.
Friday, January 30, 2009

President Obama's visit with House and Senate Republicans this week was useful for setting a new tone and offering a refreshing break from the Bush administration's habit of consulting almost no one. But it was a sideshow to the main battle over how to improve the economy, which is taking place among Democrats.

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Lost amid the stories about whether the stimulus bill should include small sums for family planning or new grass on the Mall is a more important argument within the president's own party over how to spur long-term growth and how the stimulus should be used to promote social and economic reform.

In truth, the stimulus proposal has united Democrats to a degree not seen in decades because most of the programs on which they want to spend are also those deemed by economists to be most likely to jump-start the economy. But if the party's progressives find themselves in agreement on the fundamentals, they have differences over priorities.

One camp favors using the stimulus to focus on the needs of Americans of modest means. The $819 billion stimulus bill that passed the House last night on a party-line vote, as well as the proposal being developed in the Senate, includes substantial new spending for the unemployed, for food stamps and for advances in health-care coverage. The tax cuts in both versions tilt toward Americans with lower incomes. Education programs also fare well.

But another group of progressives sees the bills as shorting investments for infrastructure: roads, bridges and particularly mass transit. This camp was buoyed by a report released yesterday by the American Society of Civil Engineers concluding that it would take $2.2 trillion to bring the nation's infrastructure into good repair.

In the meantime, environmentalists have pushed for large investments in clean energy and conservation. The stimulus plans are generous in these areas, but their advocates are seeking more.

And many different kinds of progressives support substantial fiscal relief for the states -- even though Washington politicians rarely get much credit for such help -- simply to avoid draconian and economically counterproductive cuts in state budgets.

Underlying the debate is another progressive worry: that as large as the stimulus proposal is, it may not be big enough to pull the economy out of a steep decline.

Between now and late February, when the Senate and House are expected to resolve the differences between their proposals, pressure could build for a larger stimulus, or for a second package later this year. Either step could allow progressives to allocate more money to their competing priorities, particularly infrastructure.

With a few exceptions, Republicans and conservatives have largely stayed out of these arguments. They prefer to insist on more tax cuts for the well-off and for business, ignoring the reality that all but the most ideological economists dismiss such measures as having limited value in boosting the economy.

Obama graciously brushed off the GOP's advocates of big tax cuts by acknowledging "legitimate philosophical differences" over the makeup of the plan. A less polite way to put it: Because of their philosophical leanings, most Republicans have chosen to make themselves irrelevant to the debate. Their disengagement was underscored by Rep. John Boehner, the House minority leader, when he urged his members to oppose the plan even before Obama met with them on Tuesday.

The president has been willing to give House and Senate Democrats substantial leeway in crafting their proposals because he knows that both will end up being broadly to his liking. He can influence the final outcome when the two houses work out their differences next month.

The administration did intervene, however, to chip away at a few small but politically troublesome expenditures that won wide and negative media attention.

For example, one congressional staff member said that the administration's pressure on the House to drop a provision providing modest sums for state family planning programs reflected the view of chief of staff Rahm Emanuel and other Obama lieutenants that injecting a cultural issue into an economic debate would be politically counterproductive.

Yet if Obama looks serene, he has reason to be. He has already changed the tenor of the debate, and economic events have shifted the philosophical ground on which it's occurring. The most important arguments are among progressives over how much government should do, how it should do it and where it can spend money most effectively. That's very different from the debate Washington is accustomed to, but it's a debate worth watching.

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