The Congressional Budget Office projects that the federal government will run deficits through 2019. And Sen. Kent Conrad of North Dakota, chair of the Senate Budget Committee, predicts an annual rise in the national debt of close to $1 trillion for the next decade. Yet somehow, despite such financial realities, President-elect Barack Obama managed to engender bipartisan support for an unprecedented government spending program even before taking the oath of office. The reason? Fear.
Lawmakers on both sides of the aisle are terrified that the nation's full-fledged recession might drag on for years. Rather than wait for the markets to correct themselves, they stand on the precipice of approving a stimulus package that could reach the trillion-dollar mark just three months removed from passage of a $700 billion government bailout and two months since the Treasury made an extra $800 billion available for credit markets.
The difference this time around is the potential for permanent change. In a Jan. 8 speech outlining his broad agenda for the stimulus dollars, Obama spoke of alternative energy, education, and health care, a set of issues requiring long-term reorganization and investment. His comments mirrored much of that said on the campaign trail, suggesting that Obama's plan to stimulate the economy flows directly from his promises to reshape America. "It's a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges," he said.
And so a great irony emerges: Obama's expensive new vision for America, which Congress might never have otherwise funded, now appears fast-tracked amid financial crisis. Among the players with much say in the final package, few seem ready or willing to tap the brakes.
Rep. Nancy Pelosi, D-Calif.
The House speaker is pressing hard for passage of Obama's stimulus package by mid-February. And her apparent willingness to quash the inclusion of any earmarks in the bill underscores a commitment to that rush timeline. But Pelosi's aversion to tax-cutting for the well-off is proving a sticking point.
She has hinted that Democrats will continue their push to carve such cuts out of the plan. What's more, Pelosi favors passage of a second bill repealing President George W. Bush's tax cuts for those earning more than $250,000 per year before they are set to expire in 2010. She claims that such cuts are "the biggest contributor to the national debt."
Sen. Max Baucus, D-Mont.
The chair of the Senate Finance Committee has expressed openness to tax cuts provided a significant portion goes to encouraging the production of alternative energy. Baucus leads a large contingent of Democrats concerned that Obama is missing an opportunity to direct funds from the unprecedented spending package toward long-term investment in a new energy infrastructure-this, despite Obama's call for doubling alternative energy production in the next three years, maximizing energy efficiency in homes and federal buildings, and revamping the electric grid. Baucus and many Senate Democrats have a far grander scheme in mind, one that might reshape the relationship between government and energy producers for years to come. Environmentalists in the party want a refundable tax credit for renewable energy production, which would guarantee government payouts to companies that produce wind or solar power. But any ramp-up of dollars allocated to alternative energy could open the door to more angling for other partisan interests, too.
Blue Dog Democrats
Fiscally conservative Democrats appear ready to go along with the stimulus package but expect future restraint in return for their cooperation. Rep. Baron Hill of Indiana, speaking on behalf of the Blue Dog Democrats, said he was reluctant to expand the deficit, but gave no indication that his 51-member contingent would hold up passage of Obama's plan.
Instead, the expectation is that Congress will resurrect the pay-go ethic promised two years ago once the economy is juiced. Louisiana Rep. Charlie Melancon, a Blue Dog leader, says he is convinced of Obama's commitment to rein in spending on future bills: "We keep trying to write a check with no money in the bank, and we can't continue to do that. What we've heard from the president-elect thus far, it's music to our ears."
Sen. Mitch McConnell, R-Ky.
The Senate minority leader has taken a bipartisan tone from the outset of the stimulus debate, praising Obama's willingness to include tax cuts as part of the plan. He says that Obama has been open to hear and include Republican ideas: "I think we are being listened to. I'm pleased with what the new president's had to say so far."
But that agreeable attitude is not without objections. In an apparent effort to recapture the GOP image as deficit hawks, McConnell has criticized attempts to include in the stimulus package pet projects like a Las Vegas museum of organized crime or a Miami water slide. Mayors from around the country have requested $73 billion for such public initiatives, claiming they will create thousands of new jobs. McConnell is stressing the need for targeted and temporary relief, rather than permanent government expansion.
Rep. John Boehner, R-Ohio
The House minority leader affirms the need for a stimulus package but has expressed significant concern regarding the size and scope of what many Democrats propose. Central to Boehner's apprehension are proposed infrastructure projects, such as bike paths and civic beautification. He contends that any spending on infrastructure must target only essential initiatives, such as widening highways or constructing needed buildings.
The bulk of the stimulus plan, he says, should go toward allowing "American families and small businesses to keep more of what they earn." During preliminary stimulus discussions, Boehner stressed the urgency of quick passage and agreed that a President's Day deadline was attainable. But upon hearing the intentions of some Democrats to tweak the plan away from tax-cutting and toward long-term government expansion, he now doubts whether lawmakers can reach adequate compromise in such short order: "Whether we can do it in a responsible way that quickly is unknown."
Conservative lobbies and think tanks
While Republican lawmakers have expressed near universal support for an unprecedented government spending bill to spur the economy, many conservative lobby groups and think tanks remain unconvinced. The Heritage Foundation argues that the best means to soften the economic recession and speed up recovery is to extend the 2001 and 2003 tax reductions and to provide further tax breaks to small businesses and corporations via a 10 percent cut to the top rate. Brian Riedl, a Heritage budget analyst, calls Obama's approach a repeat of "1970s-style, big-government expansion." Club for Growth president Pat Tooney argues that Obama's plan is naive: "If government spending was all it took to avoid a recession or get out of one, how could we ever have one?"
But the U.S. Chamber of Commerce, a lobby group representing 3 million businesses that typically opposes government spending, contends that the current financial crisis amounts to a heart attack in need of shock from a big-spend defibrillator. Chamber president Thomas J. Donohue has praised the direction Obama is taking, which "includes not only tax cuts for workers and businesses, but also his strong emphasis on infrastructure."