How's It Playing?

A look at how well the stimulus package and the Daschle withdrawal are playing the (new) purple states.



The Orlando Sentinel opposes the "Buy American" provisions.

The package that passed the House last week includes a protectionist provision that would require U.S.-produced iron and steel to be used in any construction projects financed by the measure. The Senate's package, under debate this week, would go a step further by also mandating that any manufactured goods used in the projects be U.S.-made. The geniuses who came up with this idea must have been napping during history class.

When Congress slapped high tariffs on imports in 1930 under the Smoot-Hawley Act, other nations retaliated with their own tariffs. World trade plummeted, and the Depression deepened.

While the Buy American rule wouldn't impose tariffs on imports, it would invite other countries to adopt their own buy-national restrictions, at the very least. U.S. exporters and their workers would be shut out from hundreds of billions of dollars worth of business with those countries. Several of those countries, normally big customers for American goods and services, are launching their own building programs to stimulate their economies. The list includes Germany, Britain, France, Australia, India and China.

The St. Louis Post-Dispatch's editorial board comments on the Daschle debacle and says Obama "needs to step up his game."

Ultimately, the buck stops on the president's desk. Mr. Obama's vetting team uncovered the tax problems of Mr. Geithner and Mr. Daschle, and the president proceeded anyway. He argued that the economic expertise of Mr. Geithner and his respect on Wall Street made the former president of the New York Fed too valuable to sacrifice over the question of $38,000 in unpaid taxes. The Senate eventually agreed and confirmed him.

Similarly, until Tuesday morning, Mr. Obama continued to insist that Mr. Daschle, the former Senate Majority Leader from South Dakota who has a passionate interest in health care reform, should be confirmed despite revelations that he had hadn't paid $140,000 in back taxes until he was deep into the vetting process. Mr. Daschle blamed the problem on his accountant.

Mr. Daschle might have skated through like Mr. Geithner had Ms. Killefer's tax problems not emerged. That the woman he'd appointed as White House performance officer -- in effect, the person in charge of scrutinizing federal spending -- had overlooked her own tax obligations was one asterisk too many.

For another example of how the stimulus is playing in a purple state, consider this editorial in the Indianapolis Star, which is critical of the notion that throwing large sums of money around will create jobs, tweaking both the federal stimulus bill and a state stimulus plan introduced by Dems in the Indiana state house:

One, unless targeted through a careful cost-benefit analysis, the spending likely will not create much stimulus. Two, careful analysis takes time, which means the government spending may kick in after the economy has started to recover on its own.

Those shortcomings apply not just to the federal package but also to a state stimulus plan pushed by Democrats in the Indiana House. The Indiana initiative is by necessity much smaller than the federal plan -- $800 million instead of $800 billion -- but the economic principles are the same.

In addition, the Indiana package, approved Monday by the House Ways and Means Committee, has two other major weaknesses. The legislation, House Bill 1656, would divert $800 million from the state's Major Moves effort (a highway and bridge fund generated by the lease of the Indiana Toll Road) to local road projects. The lawmaker who authored the bill, state Rep. Terri Austin, D-Anderson, hopes cities and counties can put the money to use quicker than the state. But it still could take up to two years for those projects to begin, and the effort could wipe out funding for state projects that already are planned.