“The Stimulus Isn’t Working, Lets Do A Second!”

Jul 6, 2009 7 Comments ›› Erik Wong

A second stimulus is NOT the answer to a bailout that DIDN’T WORK. Obviously, the answer is to go in another direction and stop blowing money on worthless pork while the country collapses into debt. It’s called CONSERVATISM for a reason.

ABC:

As job losses mount, Democrats are growing impatient about the impact of the massive stimulus package passed earlier this year, with talk beginning on Capitol Hill about a possible second stimulus bill.

Today on ABCNews.com’s “Top Line,” Sen. Sheldon Whitehouse, D-R.I., said a second stimulus is “probably needed,” and predicted that Congress is likely to act before the end of the year to inject even more federal dollars into the economy.

Said Whitehouse: “I think that it is probably needed. We’re going to need to have some further discussion. It will probably take place towards the end of the year and we want to take a look at the economic conditions at the time. But it certainly should be on the table at this point.”

Whitehouse’s home state of Rhode Island is among the hardest-hit in the current economic downturn. In light of a Providence Journal story revealing that most stimulus money headed to Rhode Island has gone to close the state’s budget gap — instead of on job-creating projects — we asked the senator whether he was satisfied with the spending pace and overall impact of the first stimulus measure.

“No — obviously not,” he said. “I think that the sooner we can get these jobs out for people the better off they will be, and the sooner the economy can really start to turn around in a way that means something to regular people and not just to bank executives. So, we’ve got a job to do to try to speed that up.”

He continued: “We very may well need to do a second stimulus, and we have to reassure the American people that just because the banks are back on better footing again, we haven’t overlooked them. They’re the priority, and we gotta make sure that’s clear.”

The Obama administration, while acknowledging that the stimulus’ impact hasn’t been what they predicted it would be, is putting off questions about a second stimulus.

On ABC’s “This Week with George Stephanopoulos” Sunday, Vice President Joe Biden said that while administration officials “misread the economy” earlier this year, it’s too soon to say whether more stimulus spending is necessary.

“I think it’s premature to make that judgment,” Biden told Stephanopoulos. “This was set up to spend out over 18 months. There are going to be major programs that are going to take effect in September, $7.5 billion for broadband, new money for high-speed rail, the implementation of the grid — the new electric grid. And so this is just starting, the pace of the ball is now going to increase.”

Also on today’s program, Whitehouse said he remains hopeful that the Senate will take up a health care reform bill before the August recess.

He touted a Congressional Budget Office report issued last week on the latest draft from the Senate Health, Education, Labor and Pensions Committee that estimated the plan would cost roughly $611 billion over 10 years.

But Whitehouse, who serves on the HELP committee, acknowledged that the final price tag could exceed $1 trillion when additional elements are included by the Senate Finance Committee.

“I really don’t have a handle on that cause the finance committee hasn’t produced a bill yet and hasn’t produced numbers yet, so it’s certainly possible” the final cost will top $1 trillion, Whitehouse said.

Done right, health care reform saves money in the long run, he said: “There’s a lot to work with if we can start to squeeze some of the waste, some of the duplication, some of the error, some of the unnecessary conflict out of this incredibly over-expensive system that we have to carry right now.”

Watch the full interview with Sen. Sheldon Whitehouse HERE. (You can also find out about the dachshund who wanted his say during a conference call between senators and reporters last week.)

Also today, we chatted with The New York Times’ Mark Leibovich, the author of the cover story in the latest New York Times Magazine.

Leibovich unpacks the mysteries surrounding Gov. Sarah Palin’s surprise announcement (hint: he’s as mystified as the rest of us), and predicts that senator-elect Al Franken, D-Minn., is going to try his best not to be funny after he’s sworn in tomorrow.

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The New Republic:

The Journal has its second piece in as many editions about the chatter over another stimulus bill. As on Friday, the paper reports that the White House has discussed the idea internally, but believes it’s too early to pursue given that so little of the first stimulus (only about 10 percent) has been implemented.

I disagree with this substantively–the economy has deteriorated far more than expected when the administration made the forecast on which the first stimulus was based, so it’s almost certain to be insufficient even when fully implemented. But, then, I suspect the administration’s economists feel more or less the same way. The big obstacle here is obviously political. And I don’t necessarily mean that cynically–the only stimulus that matters is the stimulus you can get through Congress, and the prospects of passing a second stimulus at this point are exceedingly slim. As today’s Journal piece notes:

So far, though, politicians of both parties are showing little eagerness to tackle another stimulus bill. Republicans have attacked the current stimulus package as wasteful and ineffective, labeling it as government bloat at a time of record deficits. As the GOP seeks to reclaim the mantle of fiscal discipline, many are loath to support another round of government spending.

“This was supposed to be about jobs, jobs, and jobs. And the fact is, it turned into nothing more than spending, spending, and more spending on a lot of big government bureaucracy,” House Minority Leader John Boehner of Ohio said on “Fox News Sunday.”

Many Democrats, too, said they’re disappointed with the recovery program so far but, for now at least, are resisting calls for a second package. “I don’t think anybody can honestly say that we’re satisfied with the results so far of the stimulus,” House Majority Leader Steny Hoyer (D., Md.) said on “Fox News Sunday.” But he said it was too soon to push for more. “We certainly want to see how this develops over the next few months.”

I guess my only response is that, while the politics of a second stimulus may be extremely unfavorable, the politics of 10 percent unemployment as you head into a midterm election–or, worse, a presidential re-election campaign–are far, far worse. Even if you can’t pass another stimulus today, you want to begin laying the groundwork for passing one as soon as possible. Yes, you’ll take a lot of heat from the GOP even at that point. But not nearly as much as you’ll take if the unemployment rate doesn’t improve by the summer/fall of 2010.