Evaluating Obama's 'Second Stimulus' Proposals

Can he bring the economy around before November?

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As the job market and housing sector continue to suffer, the White House is seeking initiatives meant to re-stimulate the economy, following the first stimulus efforts of 2009. According to Time magazine, "most nonpartisan economists agree" that the first stimulus was successful in the short-term but did not go far enough. The "second stimulus" proposals are a $100 billion tax credit for businesses and $50 billion on infrastructure spending. Any such measures must still be improved by an increasingly partisan Congress that is expected to shift heavily Republican in November.

  • Showing Economic Control For Midterm Elections  The Washington Post's Anne Kornblut says the move comes "Under mounting pressure to intensify his focus on the economy ahead of the midterm elections." The measure is to be "paid for by closing other corporate tax loopholes ... This is not the first time Obama has called for making the credit permanent. But with the economic recovery moving more slowly than the administration had hoped - and Democratic candidates nationwide panicking as the issue threatens their majorities in the House and Senate on Nov. 2 - he is increasingly eager to show he understands the depth of the problem and is trying to act."
  • About White House vs Republicans  The Los Angeles Times' Christi Parsons writes, "Republicans oppose Obama's economic policy, making more sweeping proposals politically untenable for the Democratic president. Obama chose the Cuyahoga Community College as the site of his announcement partly to contrast his own plans with those of House Minority Leader John A. Boehner (R- Ohio), who offered his own thoughts on the economy during a recent address nearby. Boehner stands to become Speaker of the House if the Democrats lose control of the chamber in November's congressional elections. Obama also intends to present listeners with a choice between his own ideas on the economy and the GOP's 'failed policies and failed philosophy,' White House communications director Dan Pfeiffer said."
  • Infrastructure Spending Unlikely To Pass  The Associated Press says of the "$50 billion in long-term investments in the nation's roads, railways and runways" planned by Obama, "The proposals would require congressional approval, which is highly uncertain at a time when many legislators and voters are worried about adding to federal deficits that are already sky-high. Even if lawmakers could pass a bill in the short window between their return to Capitol Hill in mid-September and the elections, it's unlikely the spending would give the economy a significant boost by the time voters head to the polls."
  • Good For Obama  Liberal blogger Matthew Yglesias approves. "I don’t think that presidential 'messaging' has much power to alter the outcome at the midterms, but that’s all the more reason the White House may as well propose ideas that make sense on the merits and then hope for the best," he writes. "It’s foolish for the White House to constrain itself to only proposing ideas congress is likely to approve. This new approach is the right way to go."
  • How It Cold Pass  Conservative blogger Ed Morrissey rejects the near-consensus that the spending has no chance of passing. "Don’t be too sure it won’t pass Congress before November. Transportation bills like this give Capitol Hill denizens plenty of opportunity to get pork for their home districts and states.  In this election cycle, pork may be all Democrats can use as an argument for re-election. They certainly larded the first stimulus bill with plenty of home-town pork, and with $50 billion more in borrowed cash, don’t expect them to be shy the second time around."
This article is from the archive of our partner The Wire.