President Obama suffered a set back yesterday when the U.S. Senate rejected his proposal for $35 billion in additional stimulus spending. Last week, Obama failed to get a larger $447 billion plan through the Senate. According to the White House, the spending would have funded over 400,000 education jobs for one year. The funds would have gone to state and local school districts to allay budget shortfalls and thereby avoid layoffs. While publicly disappointed, there are those in the administration who welcome the opportunity that the GOP rejection provides. Democrats will certainly seek to use the rejection to portray republicans as a party of obstructionists that are indifferent to those in need. It is no doubt hoped that the GOP's new found commitment to fiscal sobriety will cost it with an electorate that is getting accustomed to having money thrown at it whenever things go bad.
The Democrats are becoming more savvy. Gone are the days of massive, trillion dollar bills and bail outs. In their stead we have smaller, carefully targeted spending bills aimed at specific objectives such as education and infrastructure. The administration is adapting. In addition to the 400,000 education jobs it is claimed the bill would have created, the president's $35 billion proposal that was vetoed yesterday would, among other things, have provided funds to help pay the salaries of local police and firefighters. We are not talking about abstract economics here. By carefully targeting spending proposals the president is doing his part to make budget negotiations intimate. Against the vague and undefined specter of Big Government, Obama is pitting the image of school teachers, fire fighters, and bridges. Now, when Republicans reject spending proposals, they are not simply rejecting run a way spending by a bloated government, they are rejecting something concrete. In this instance they are rejecting spending to pay for teachers and firemen.
Obama's continuing push for ever more money puts republicans in a tight spot. If the economy doesn't improve he gets to point the finger at republicans and chastise them for their miserliness and intransigence. If the economy does improve he will get the credit. He can claim that it was due to his aggressive spending policies. On the other hand, if republicans yield and support more spending they will become complicit in Obama's policies. Worse still, if republicans become complicit the party could split. The pragmatists in Washington who accede to more spending could easily face aggressive challenges in the primaries next Fall from the right. If nothing else, they will lose a powerful issue to run on. There is the possibility that the economy will take off in the next few months. In that case, everyone could take credit, but let's be realistic here.
Three years into Obama's administration and the economy is still foundering. The president has spent money like no one before him and has very little to show for it. Nevertheless, there are those in the administration who have concluded that the solution is to spend still more. I have come to suspect that the tide of spending is not simply due to a sincere belief in the efficacy of the federal government to solve our nation's troubles. There is more to it, not the least of which is to assure the public that the administration is on top of things. Obama's actions may be wasteful and ineffective but they are actions nevertheless. The public needs to believe that the administration has a plan, and it does. It may not be a good plan, but economics has never been one of the electorate's strong points. Americans want to turn on the news and hear that the administration moving aggressively to solve our problems.
Obama is not going to reduce regulation. He is not going to lower taxes. He is not going to trim government. He is going to spend money. That is the only trick he has. But there is another important reason he will not do so. Such an action would pose a serious risk to him and his party. If he lowers taxes or lightens the burden of government and the economy recovers, it would be a serious blow to the liberal doctrines of governmental supervision and intervention. Just as an economic recovery would vindicate Obama's policies, continued or worsening economic deterioration would refute them. If he acts to lighten the burden government places on the economy and it recovers, it would be a vindication of conservative principals. Obama ardently wants an economic recovery but if he wants to be reelected he needs it on his terms.
If we ever resolve the financial crisis that is threatening our nation I would like to see a discussion over how it happened that state and local governments have come to depend on Washington to make ends meet. As for stimulus spending, if creating jobs was simply a matter of government spending, everybody who wanted a job would have one. In any event, we are not really talking about spending money at all. The government has no money. We are talking about borrowing money.
The easiest way in politics to demonstrate commitment to an issue is to spend money on it. Compassion in Washington is usually measured in dollars.The more you care, the more you spend. Obama is determined to show the nation that he cares and the Republicans don't. It is a pretty good plan. If he gets the money he wants he gets to continue in his role as the nation's benefactor and the champion of the downtrodden. If he doesn't get the money, he gets to accuse republicans of indifference, if not callousness.
Obama may have only one trick, but it is a good one.
