I'm not the only person worried about the size of the stimulus -- Paul Krugman writes a column about the topic, John Judis argues the idea better than I ever could, and now Democratic Senators are pushing for more focus on effective investment in meetings with Obama advisers.
While the meeting in the Senate yesterday will be seen with dismay in some corners -- particularly Senator Tom Harkin's remark about "trickle-down" economics -- I'm actually somewhat pleased at the way this is working. The Obama plan was initially cautiously priced (!) and included incentives for Republican votes, but all parties were pretty clear that the legislature would be making a variety of change, and hopefully improvements, to the bill. A frank meeting between the transition team and senate Democrats can't hurt that dynamic, and it gives political cover to Obama as he sells the plan to a spending-skeptical public. More than that, I'm a big believer in institutional prerogatives. Obama and these Senators need to work together to create good legislation, which is why this quote from David Axelrod is good -- "These folks are not potted plants. They’re elected officials, and they’re doing their jobs” -- and this quote from Larry Summers is better -- “Message received, loud and clear.”
The other good thing about the Senate exercising its prerogatives is the stated intention of including the Durbin foreclosure mitigation plan (cramdown!) in the stimulus package, weirdness of negotiating with Citigroup notwithstanding. This is an option that doesn't cost the government any money but will likely have important effects on the economy, especially since the toothless voluntary mortgage refinancing program has only had 400 applications since its inception, out of the millions of foreclosures in the country.
The posturing between the new administration and the Senate may be mere Washington kabuki, but it's important, especially as it showcases the most productive possible relationship between Obama and the left: Progressives unafraid to clearly and constructively demand more ambition from the administration, and the administration taking their concerns seriously. There's a lot of sausage-making to go before we see the true shape of the stimulus legislation. It's clear, though, from today's unemployment figures -- another half-a-million jobs lost last month; the highest unemployment number, 7.2 percent, in 16 years -- that action is needed, and soon. Especially given the fact that underemployment is at 13.5 percent -- more than one in ten American workers either lacks a job, can't find a new one, or has part-time work when they want to be working full-time. That ought to sober up anyone who thinks maybe we should take a less-is-more approach to this situation.
-- Tim Fernholz
