Early reporting from Capitol Hill suggests President Obama's aid package for the economy may not sail through to Congressional approval immediately.
It's too early to suggest the legislation is in serious trouble (though some media reports are doing that). The reports do confirm, however, that if Obama is to reach out to Republicans and is serious about consensus government, he'll need to rein in some of the knee-jerk political instincts of Congressional leaders in his own party. Pelosi is quoted as saying, "Yes, we wrote the bill; yes we won the election" but this hardly seems commensurate with the President's stated desire to reduce partisan posturing.
Besides, the GOP leadership surely have a point when they suggest that funding for Pell grants, or the arts, is inconsistent with the legislation's priorities; they may be on shakier ground in asking for more tax relief for business (which also will not have quick effects), but those ideas might also be considered. Both parties need to realize that they will benefit most (in voters' eyes) by acting quickly; by refraining from porkbarrel spending on unrelated pet causes; and by focusing on the priority of getting the economy moving again. Dickering, but not bickering, will be welcome.
Obama meets today with Congressional leaders of both parties, and later with Republicans. Compromise solutions can materialize rapidly when necessary, so I have little concern that the package will pass in some form, and without major delays.
The second real difficulty is to know what effect the legislation will have. Economists and politicians alike disagree on what measures will work best, or soonest. I'm uncomfortable with the sort of legislation that just throws money in several directions in the expectation that some of it may sprout a solution, but understandably, no one -- I assume especially not the President -- is likely to put all the eggs in one basket. I do think the suggestion by Washington Post columnist Steven Pearlstein, to focus on what he calls the "shadow banking system," has a lot of merit. After all, just a few short months ago, when the full extent of the crisis had not yet been revealed, analysts were fairly unanimous in saying that the real threat was in the disappearance of this subtier of packaged loans. Seems like a good place to start.
Excellent point on the response of the Banking System. Jim Lear interviewed a high tech company in Portland which had to shut down because of the bank refusing a small but necessary loan. The company had all the right qualifications but no go. Obama may have to nationalize the banking system if they don't stop hoarding the funds.
Posted by: sanders watkins | January 24, 2009 at 02:25 PM