Read Bill first, and definitely the AP rundown.
I cannot express how irritating and disappointing is the continued media emphasis on the game and process of the legislation, as opposed to precisely what's in it. One is relatively easy to report; the other requires a lot of reading. But they're the pros, right?
The figure is $789 billion. The number came down from $838B (that's bad), for a dumb reason — purported “fiscal responsibility” — but may well contain more juice than the higher figure. That's good. Maybe. Or maybe not:
The deal reflected a calculated gamble by Mr. Obama in the first weeks of his term. To win Republican votes, the final stimulus package is considerably leaner than what many economists say is now needed to jolt the economy, given its grave condition.
Apparently not in the stimulus: The dumb-ass $15,000 inducement to flip homes and re-inflate the real estate bubble. That's good!
State aid got cut from the House's original $79 billion to $54 billion — still higher than the Collins/Nelson Senate bill's $39 billion. That's not good enough, but apparently it's what we have. School construction, which was $16B in the House figure, is apparently folded into the state figure now. (Mostly bad.) Thanks again to Collins/Nelson for screwing our schools. I wonder if we'll get another bite at this apple, considering that $80 billion of the total package is the AMT fix, which is a.) not stimulus and b.) was going to get done later anyway.
10 Billion in NIH funding is still in. Some of that money will be coming up here, one would think.
WSJ says the size of the package was reduced in part due to cuts in big-business-favored incentives and cuts. Like this gem:
Democrats shed most of that by cutting back a tax break sought by unprofitable businesses to recoup taxes paid in the past five years by offsetting former profits with more recent losses. Democrats agreed to limit the tax benefit to small businesses, reducing its cost to just a few billion dollars from $19 billion included in the Senate bill.
So overall, it's still not big enough, and good things were cut out in order to make sure it's not big enough. So, more must be done.
Overall, it’s certainly a bit disappointing because clearly some things that should be in this package aren’t. I’d also agree that more must (and likely will) be done to ensure the economy doesn’t fall off a cliff.
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p>Still, I would step back for a moment and make a note about how significant this package really is, historically speaking. The fact that we’ve been led to this point by terrible private sector mismanagement is an outrage, and it’s unfortunate it has come to this — but whether or not this package is flawed, it does represent a complete shift from the politics of the last couple decades plus. It is a signal that we are entering a new era that recognizes the importance and positive aspects of government action, and moving away from the simplistic rhetoric of the previous era that blamed government as being the problem.
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p>It can be easy to lose sight of because of concerns over certain pieces of the package and perhaps also because we’ve “expected” some sort of a package for the last couple months now — but this is an historic bill and I think a real turning point in American public policy.
And can you imagine what the bill coming out of Congress would look like if the election had gone the other way? We would be in such terrible trouble.
That stimulus, it reminds me of the time I was going to have some people over for dinner. As I remember it was a Thursday, or Friday, no defintely a Friday, and there were five people coming over, or six, but then some cancelled so as it turned out only five. So, anyway, they all wanted an Italian dish and so I went to the grocery, Shaws I think but you know how good the produce is at Big Y, so I weighed which one to visit then decided on Shaw’s because it was closer.
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p>So anyway as I was shopping at Shaw’s who did I run into but my neighbor who was just raving about a local restaurant, and what great Italian food they had. But they didn’t do catering, you know, what a shame, because if they catered, then I wouldn’t have to cook, so we started discussing the recipe and he told me that you just can’t beat fresh basil, but I’d rather not spend the money when I have dried basil at home. You know, this summer I actually grew some outside. Grows like a weed and it’s fresh almost ’til the winter. But, no, does he believe me? About the dried basel I mean. No, he starts quoting fricking Julia Child in that high pitched voice and he’s yammering on and on about French School compared to the Chicago Culinary school. No wait, that wasn’t him, that was earlier at home when I was watching the home cooking channel.
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p>Anyway, yeah the stimulus hearings were like that and the only way the bill would be worse is if rabid flying monkeys with Bird Flu swept Boston. Which reminds me, “Wicked”, what a good play, ‘specially the part with the bubble machine.
The difference between the original House bill and what the “centrists” got is greater than the $838 vs $739 billion, because the final figure includes about $70B in non-stimulative changes to the alternative minimum tax, which the house would have done anyway.
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p>Difference is, had it been separate the House might have attached it to a progressive bill (boosting its chances), whereas in the instant proceeding it was used to artificially inflate the apparent size of the stimulus and mask actual cuts.
Republicans make up 40% of the legislature and between the two legislative branches a grand total of 3 Republicans voted yes.
Well, this is the same media that turn every national election into a discussion of horse races. It’s an open question whether that’s because they think we’re too stupid to understand detail and nuance, or whether they are too lazy to find those things out. I lean toward that last.
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p>… because Amtrak and “high-speed” do not intersect all that much. Where are we going to build $8B worth of high speed rail? How many miles will that get us? If we started from scratch, I bet it would barely handle Baltimore to D.C. these days, so I assume this is more of a retro-fit concept.
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p>This is, in essence, a big fat subsidy for the pharmas. Otherwise the unemployed would simply drop COBRA a lot sooner.
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p>Stimulus? For whom? How much of that gear is made (or even distributed) by U.S. businesses?
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p>Technically, this is just a dumb as the tax deduction for home buyers that was removed.
How do you figure? COBRA is a way for people who are laid off to keep buying health insurance through their former employer’s group plans, though they have to pay the full freight themselves. This apparently will pick up part of the tab. So it helps people keep their health insurance, which seems like a good thing. If, as you say, the unemployed would drop COBRA without the subsidy, it means they won’t have health insurance (or they’ll have to find it on the private market, which outside of MA is very difficult). Not necessarily a good thing, right?
I’m wondering what the cost difference would be between picking up 60% of their COBRA premiums and offering them Medicaid, perhaps with the beneficiary picking up 50% of the costs. I have to figure Medicaid would have been cheaper.
I agree that health insurance is important, and I feel for the folks that are left hanging when they get laid off, but what does this particular spending do, stimulus-wise? It reinforces the revenue stream going for insurance companies and other large health industries. It also provides some health security for people out of a job for about a year or so (until their COBRA expires), but what would they do with that money otherwise? I have a feeling many would decide to take their chances and blow off COBRA entirely. So, it’s not clear to me how this spending is actually finding its way back into the economy. What do big insurance companies do with their profits? They don’t tend to boost economies, IMHO.
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p>It may be a very good choice anyway, because it helps keep our labor force healthy and moving, but its not a great economic stimulus, per se.
There have been talks about extending the HSR corridor to Montreal for years now.
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p>Also I think there was a vague plan to extend it south to FL.
My experience with projects like this would take years and years of environmental studies, population studies… before the fist “shovel” was ready or even bought. Bad idea. Look at Amtrak.
… is mostly already there. It needs some engineering in order to make it capable of handling the HSR, but this is exactly what was done for the NE corridor. In general you are right in that projects take time to come to fruition, but the myth that is out there is that ‘work’ doesn’t begin until the actual construction crews hit the ground. All that preparation time is because all the preparation is actual work. Not the least of which is a detailed inspection in order to diagnose the engineering needs properly.
I mean, the Acela restored rail to 1950s speed, but it’s still faster to fly to DC.
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p>As a benchmark (though they are building faster in Asia), you can take a train from Paris to Marseilles in three hours. That’s the equivalent for Boston to Virginia.
I would love to see it, but good luck fighting all the lawsuits that will come from abutters in SW Connecticut. It would be Cape Wind-cubed.
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p>If you haven’t read this article and are interested in rail issues, I highly recommend it — http://www.washingtonmonthly.c… Rather than laying down new track everywhere (which would take years to get built anyway), they should take some stimulus money and fix the choke points in the system — Baltimore, NY, Chicago, dare I say N-S link. They also need to find some way to fast-track all the b.s. environmental permitting and NIMBY lawsuits so we can get these projects up and running tomorrow.
It seems like most folks (myself included) here share the opinion that 1) the stimulus is probably not big enough anymore and 2) the tax cut provisions will be both ineffective and possibly more damaging to the economy. It’s not unlikely the President will have to come back for more money.
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p>My question is, how do you frame the debate next time to keep tax cuts largely out of it? Is there any way to pinpoint, 6-12 months from now, which aspects of the stimulus did the most good and push more of those through?
I predict we’ll see Democrats blaming the 6% cut that the 3 Republicans forced on them. They’ll also blame the previous administration. The Republicans (minus the 3 senators) will of course blame the Democrats. Productive dialog, no?
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p>It might have been better if Democrats got everything they wanted and clarified where responsibility lies for success or failure in the coming years.
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p>Allowing me to deduct sales tax on a new car is probably enough to get me to buy a new car this year. I’ll have to do the math. But, as I’m approaching needing a new car in the next 1-2 years, the ability to save some money by purchasing this year may be the tipping point. Multiply this by ??? people who will be similarly convinced to purchase and calculate the effect on the related industries. I’ll leave that to someone else.
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p>But I will comment on the $16B (originally $20B) for school construction. I imagine the resulting economic stimulus is the same as it would be for any other construction project.
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p>Whether there’s any impact on student achievement depends on the details. If it’s filtered by the states as new construction grants, we might not see much of an impact, if only for the reason that new construction price tags are so astronomically large (we could afford about 125 Newtons or Springfield vo-techs). This doesn’t even go into the fact that there is no research to show new schools improve learning.
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p>However, student achievement can improve by equipping their science labs. I just question whether the federal-state-local grant mechanisms for school construction allow such things to be included outside of major renovation/building.
You buy car for $20,000. Sales tax is $1,000 here in MA.
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p>Say you’re marginal rate is 28%, so the impact of the deduction is $280. Not sure that would have me rushing out to buy a new car (and if you’re in 15% bracket, we’re only talking $150, assuming that you have deductions over the standard deduction to begin with).
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p>Now if we’re talking tax credit, that’s a stimulus; think the deduction isn’t quite all it’s cracked up to be.
I’d agree that if I wasn’t already in the market for a car, it’s not going to motivate me.
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p>But for me, it’s either this year or next, and if I can save a couple hundred bucks by buying it this year, it’s going to be one thing that I consider. The savings will pay for an alarm system or similar upgrade.
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p>When you mention tax credit, are you referring to the $500 per worker credit?
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p>If so, how do you see that as a stimulus whereas providing incentive to buy a car this year rather than next isn’t?
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meant that instead of a tax deduction (which depending on the person’s circumstance and how the details work out, may mean $0 on the low end, modest in the middle, or taken away entirely by the AMT), posit the car purchase incentive as a tax credit. Far more valuable, and applies to everyone.
First of all, it doesn’t contain much in the way of tax cuts for the rich.
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p>But, more importantly it raises the likelihood that there will be a more progressive federal tax code in the works to help pay off the debt. They don’t want those $25M/year bankers to pay any more in income tax.
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p>Wait until the 2011 budget is released and hear them squeal.
I realize I am not speaking from the approved Dem talking points, but whatever.
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p>This “Payroll Tax Cut” is moronic and useless. Withholding $13 less a week is not going to do anything for the economy. Indeed, it’s not going to do anything for anyone except for those really living on the margins. Sure, we should help those people. But let’s call it relief and limit it to the most needy. This “tax cut” won’t even be enough for a middle-class couple and their two kids to go out to Applebees once a month.
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p>There was a lot of criticism about the rebate checks, but at least it came in a lump sum. I.e., people felt a windfall. Sure, some saved it or paid down debt, but a lot of people spent all or part of it. This is simply not going to be noticed by the vast, vast majority of recipients.
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p>And I really want to know why Social Security recipients get their payment in the form of a lump sum $250 check. I mean, if it’s smarter to piece the stimulus out over time for people who work, then why not for seniors? I smell vote-buying, and I am getting really sick of living in a gerentocracy.
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p>When you add up this useless provision ($120b) with the AMT fix we were going to go anyway ($70b), you have $210b that could have actually accomplised something worthwhile. We could have moved toward universal healthcare. We could have had a real investment in infrastructure improvemens (like the rail projects discussed above). We could have made real steps in the move to clean energy.
The Environmental News Service is reporting that $50 billion in nuclear loan guarantees inserted by the Senate have been removed by the conference committee.
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p>Guy Chichester, this one’s for you.
the list of “shovel ready”
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p>http://www.mass.gov/Agov3/docs…
I write this as a researcher and someone who makes his living off of NIH grants. This is THE STUPIDEST part of the stimulus package. Why? Who could object to medical research?
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p>1. Medical research is not done in 2 year increments. If we put this money into the standard 4 or 5 year projects we will find that in two years there is no money for new research because it is all going to support research started during the stimulus.
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p>2. Funding a larger percentage of the research now and a lower percentage later will mean we are funding weaker research now than we would otherwise since it is lower in the priority scores and ignoring better research that will come along in 2 years.
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p>3. This encourages more people to get into the field when we really need fewer. Why? Because most NIH research generates more expensive technologies when we need to think about how we are going cut medical expenses.
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p>4. This will not generate more private funding (unless it is from the pharmaceutical companies which is no blessing) and thus it is a dubious stimulus.
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p>On the other hand, it might help get my next grant funded.