7 p.m. ET all around the dial, the recovery begins. Remember that $300 billion number that was being kicked around? Change of plans:
In excerpts released by the White House Thursday night ahead of the president’s speech to a joint session of Congress, Obama says the country faces a national crisis and a question: whether elected officials will meet their responsibilities the same way regular Americans do.
Congressional officials and others outside the White House say the plan costs nearly $450 billion and would increase and extend a payroll tax cut for workers that goes to Social Security, while providing the tax cut to employers, too.
According to CBS, more than $100 billion will go towards infrastructure and a similar amount will be comprised of money to states to hire more teachers and first-responders and tax breaks for small businesses. The White House promises that it’ll be fully paid for elsewhere in the budget, but whether that means new tax hikes or merely spending cuts is unclear yet.
How excited are economists? This excited:
[E]conomists on both ends of the political spectrum say infrastructure improvements might not make much of a splash in the short-term.
“It’s not good stimulus,” said Alice Rivlin, a Democratic member of the president’s Debt Commission and former head of the Office of Management and Budget.
“It doesn’t come online fast enough. If you’re really talking about things that will create jobs quickly, you need to rely on either direct government hiring in the manner of things done in the Great Depression, or demand-side things that will get more money spent by wage earners,” she said.
Alan Viard, an economist with the conservative-leaning American Enterprise Institute, said infrastructure spending can be “reasonably powerful” but cautioned additional funding might not be the most effective way to spend the taxpayers’ dime.
Does it matter? This is a campaign speech, not a speech to galvanize serious support for a “recovery.” For cripes sake, he moved it up an hour in order to accommodate a football game. The economy’s not turning around in the near term even if the House GOP rubber-stamps his plan as is after the speech, and everyone knows it. We’re already staring at a 50/50 chance of a double dip according to some analysts (“history seems to suggest that the situation will probably get worse before it gets better”), but if this nightmarish NYT piece yesterday about a eurozone banking meltdown proves accurate, a whole new global economic crisis awaits. There’s not much at this late hour that The One can do, so why not at least help his reelection effort and “put Republicans on the spot,” as the AP phrases it, by “forcing [them] to own the problem with him”? That’s what the “country over party” crap is all about. Blame-shifting, the Hopenchange way. He might as well take lefty Michael Tomasky’s advice and just unload on Republicans from the get go. That won’t help the economy either but it might goose his turnout among liberals next year.
Seated in the gallery tonight: On the Republican side, a host of entrepreneurs whose businesses are suffering from overregulation. On the Democratic side, in the First Lady’s box: Richard Trumka, who upon hearing that a non-union worker who crossed the picket line had been shot once cheerily remarked, “[I]f you strike a match and you put your finger in it, you’re likely to get burned.” Perfect.