So a compromise has been reached between the House and the Senate on the economic stimulus legislation. Details remain sketchy, but the bill is less expensive than both previous versions, thanks to cuts in some regressive tax rebates (seems they took my suggestion) and small restorations to the certain state and education funding that was cut during the Nelson-Collins negotiations. Still no economic explanations for the cuts; in fact, the greatest line in the Times piece is this:

Senator Collins said getting the final number to under $800 billion was more than symbolic; it meant “a fiscally responsible number,” she said.

So, to recap: Getting the bill under $800 billion was more than symbolic, it symbolizes fiscal responsibility. Glad we got that clear. Luckily, we have Senator Tom Harkin to express more reasonable concerns:

“I am not happy with it ... You are not looking at a happy camper. I mean, they took a lot of stuff out of education. They took it out of health, school construction and they put it more into tax issues.

Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. “It’s about 9 percent of the whole bill,” he said, “which we were going to do later this year in a tax bill. Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery. This makes no sense whatsoever.”

Nonetheless, it's hard not to see this as a major victory for President Obama. The bill still reflects the priorities he set out initially, its still more or less on schedule, and the legislation (and Obama personally) still have broad public support. I also expect that this bill will have a net positive effect on the economy, although the scale of that effect remains to be seen. In the meantime, we'll watch with interest to see how the voting goes when the completed bill goes back to the House and the Senate for final approval -- will any House Republicans switch their votes to favor the new package? Will a few more GOP senators join Specter, Snowe and Collins in supporting the bill? Tune in later this week for answers to these and other post-partisan questions ...

-- Tim Fernholz

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