E.J. Dionne: Obama's Big-Tent Stimulus; "attuned to his task as politician in chief"

[DeepModem Mom]

WP: Obama's Big-Tent Stimulus
By E. J. Dionne Jr.
Friday, January 9, 2009; Page A17

....The substantive issues surrounding an economic stimulus -- will the package be big enough and what mix of spending and tax cuts would do the job best? -- are clearer than the politics of getting it passed fast. Here's how Obama is trying to weave the politics and the substance together.

To begin with, there is deep resistance to deficits from the fiscally conservative Blue Dog Democrats, for whom deficit reduction has been akin to a religious commitment. That's one reason Obama has been talking about controlling future entitlement spending and why he is touting plans to root out inefficiencies in government -- witness the attention he gave to naming Nancy Killefer, a management consultant, as his "chief performance officer." For Obama, a highly public war against waste and fraud will ease passage of the stimulus while also showing that Democrats, who propose using government as the instrument for solving a lot of problems, intend to make reform a high priority.

House Speaker Nancy Pelosi plans to do her part as early as next week by bringing up a bill sponsored by Rep. John Tanner (D-Tenn.) that would require agency-by-agency audits to eliminate waste.

The effort to win over the more conservative Democrats is working. On Wednesday, for example, Rep. Jim Cooper, also of Tennessee and a leading advocate of entitlement reform, praised Obama for insisting that "we can stimulate the economy and address our long-term problems at the same time."

Obama may also face a conflict between getting his package passed fast and having it contain the most effective proposals. Many economists, particularly but not exclusively liberals, argue that government spending programs stimulate the economy more quickly than tax cuts. Recipients of tax cuts might choose to save rather than spend the money they get back or use it to pay down debt. Obama solves this problem in part by focusing much of his tax relief on middle- and low-income Americans, who are more likely to use the money for consumption. And the bulk of the package involves new spending, particularly on infrastructure and new environmental and technological investments. He is also pushing programs especially important to liberals: increases in unemployment benefits and food stamps, and fiscal relief to states for Medicaid and education expenditures.

Help to the state governments is crucial because they face a shortfall of more than $350 billion between now and 2011, according to the Center on Budget and Policy Priorities....

But about $100 billion of the package is expected to go to a variety of business tax cuts, some likely to be at best marginally stimulative. Why is Obama doing this? One Capitol Hill Democrat familiar with the president-elect's recent meeting with congressional leaders said that Obama told Republicans that while he could probably get his program through with mostly Democratic votes, he preferred to win GOP support so that his program could pass quickly and be sustainable over time. The price may be worth paying, but only if the business tax cuts would actually promote a quick recovery. Wasting part of the economic package on ancient business wish lists would violate Obama's own call for political leaders to "put the urgent needs of our nation above our own narrow interests."

Nonetheless, the most striking aspect of Obama's approach is how attuned he has been to his task as politician in chief. He has, so far, managed to maneuver around potential roadblocks rather than blast through them, even as he proposes a reorientation of our politics....

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/08/AR2009010803030.html?hpid=opinionsbox1

[Cha]

1. Obama and Team have a huge

task to turn our country around and I wish them the best of the best.