Congressional procedure is painfully opaque. It's difficult for me to determine Senate procedure on a conference committee report and that is making it hard for me to predict what is going to happen next on the stimulus bill. So, let me lay out what I know and also what I'm not sure about.So honestly, who knows. Obama wants this thing on his desk by the President's Day holiday a week from Monday, but the odds of that seem lower and lower daily to me. The GOP will want to stall this as long as possible before not voting for it, and quite possibly another round of negotiations may take place after the vote magically fails on Tuesday (with Harry Reid, you never know.)The House passed their stimulus bill a couple of weeks ago. It was a good bill and would have made a fine final product. It cost about $820 billion. The Senate has made numerous amendments to the House bill. Some of those amendments were good, like adding a lot of money for the National Institute of Health. Others were not so good, like stripping out a lot of education spending. In the end, however, the bills will both wind up costing around $820 billion. The big difference is that the Senate version includes $70 billion to address the Alternative Minimum Tax issue. So, the Senate version has roughly $70 billion more in tax cuts and roughly $70 billion less in direct stimulative spending. I think almost all economists would agree that the House version is better, but neither of them will become law.
What happens now is that the House and Senate will elect conferees who will meet together in a conference committee. They will work together to make one piece of legislation that both houses can support. And then those bills will go back to each house for a final vote.
Meanwhile, Americans have been losing their jobs at roughly the rate of 125,000 a week now for the last five months straight, so clearly we must take as much time as possible in order to make sure the stimulus has enough tax cuts.
Idiots.
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Its pretty disappointing all right. But think of it this way: how long do you think it will really take their constituents to figure out these Republicans have let them down AGAIN?
Our best hope -- remote though it is -- is that it won't take very long.
Nor should it. After all, as really basic Macroeconomics teaches us: the health of the economy is determined by the available money supply, which in turn is very nearly dictated by the "C+I+G schedule" i.e. the sum of C=consumer spending, I=capital investment and G=government spending.
Obviously under today's circumstances, we cannot expect C or I to rise, so we have no choice: we must raise G.
Real economists have known this since Keynes published his General Theory in 1936. It is rabid ideologues and far right sycophants who continue to deny this.
You don't have to take my word for it. You can take the word of a Nobel Prize winning economist, who explains it all very well at http://www.nytimes.com/2009/02/06/opinion/06krugman.html?_r=1&em
One things emerges crystal clear: we NEED this stimulus and we need it IMMEDIATELY. Partisan wrangling is threatening the whole country mass unemployment for YEARS.
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