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* Greg Sargent’s WaPo blog is pretty much the place to go on the stimulus bill. His most recent post is entitled: Latest Cuts To The Stim Package: Head Start, Child Nutrition, Food Stamps Public Transit. Sargent obtained a memo “detailing the latest cuts being eyed by the gang of Senators being led by Dem Ben Nelson and GOPer Susan Collins”…
Eliminations:
Head Start, Education for the Disadvantaged, School improvement, Child Nutrition, Firefighters, Transportation Security Administration, Coast Guard, Prisons, COPS Hiring, Violence Against Women, NASA, NSF, Western Area Power Administration, CDC, Food Stamps
Reductions:
Public Transit $3.4 billion, School Construction $60 billion
Those last two, especially, won’t go over well in the big cities, and Obama was supposed to be the president who understood cities.
* There are some increases…
Increases:
Defense operations and procurement, STAG Grants, Brownfields, Additional transportation funding
* Earlier this morning, the Washington Post had this list of items on the chopping block…
· $39.8 billion for state education departments to shore up school budgets.
· $14 billion for education programs, including special education and Head Start.
· $9.5 billion for Energy Department programs, including an environmental cleanup fund.
· $6.5 billion for space exploration, science programs and grants for local crime-fighting efforts.
Those education dollars are sorely needed. But I’m not sure yet what the exact impact will be on Illinois’ budget.
More as it develops.
*** UPDATE - 12:21 pm: Here’s the latest roundup…
* Politico: Education groups are flooding Capitol Hill with calls and e-mails to fight the push by Sens. Susan Collins (R-Maine) and Ben Nelson (D-Neb.) to slash around $50 billion from proposed new federal grants for state education aid.
* Gallup: Public Support for Stimulus Package Unchanged at 52%
* CBS Poll: Fifty-one percent of those surveyed support the stimulus package, while 39 percent do not. An additional 10 percent don’t know. Last month, 63 percent supported the package and just 24 percent opposed it.
* Congress Matters: C-SPAN2 says the working group looking to make cuts have gotten their number up to about $107 billion, going in the opposite direction from the walk-back we heard about yesterday.
* TPM: New Executive Pay Limits Added to Senate Stimulus
* NY Times: Democrats Cite Jobs Report as Stimulus Talks Continue
* 538: On Stimulus, Democrats Beating GOP On Party Unity [RedState view here]
* National Journal: How Obama Gets To 60 - Four GOP Senators Have Shown A Willingness To Cross Party Lines Consistently During The Stimulus Debate
*** UPDATE 2 - 2:35 pm: More negotiations ahead…
The complicated state of the Senate stimulus debate just got more intense.
Sen. Olympia Snowe (ME), one of the four Republicans considered genuinely open to cooperation with Democrats on a workable economic recovery bill, just released a statement saying she was approached by Majority Leader Harry Reid (D-NV) to come up with a list of trims from the $275 billion-plus tax section of the stimulus.
To be clear, this is separate from the $80 bilion-plus package of spending cuts that are being hashed out by a group of 15 or so centrist senators from both parties.
Added tax cuts have expanded the Senate package to the point where it is more than $100 billion above the House-passed bill.
*** UPDATE 3 - 4:35 pm: This is a fantastic development…
Several of the GOP’s most prominent governors blasted the stimulus plan making its way through Congress Thursday, urging Senate Republicans to resist passing the bill and taking aim at what they called unnecessary spending in the package.
My advice: Take away all their state specific programs for budgets, infrastructure, education, healthcare, etc. and give them to Illinois.
*** UPDATE 4 - 5:35 pm: A deal?
Amid stunning new job losses and yet another bank failure, key senators and the White House reached tentative agreement Friday night on an economic stimulus measure at the heart of President Barack Obama’s recovery plan.
Two officials said the emerging agreement was for a bill with a $780 billion price tag, but there was no immediate confirmation. […]
One Republican-proposed document outlined proposed cuts of more than $85 billion. Most of that –$60 billion — would come from money Democrats want to send to the states to avoid budget cuts for schools as well as law enforcement and other programs.
Talk of cuts in proposed education funds triggered a counterattack from advocates of school spending as well as unhappiness among Democrats.
One, Sen. Carl Levin of Michigan, told reporters he and others hoped that some of the funds on the chopping block would be restored next week when negotiations open on a House-Senate compromise.
* More from WaPo…
The deal is believed to include about $80 billion in spending cuts, and possibly around $10 billion in tax benefits that would be eliminated, although details had not yet been made available.
Democrats were meeting this evening to sign off on the deal, with a series of votes scheduled to take place after 7 p.m. Unless Republicans object to moving forward, a final vote on the bill could happen at the conclusion of those votes.
posted by Rich Miller
Friday, Feb 6, 09 @ 12:07 pm
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Understanding the big cities, and having the clout to do something about them in a rising tide of negative demographics, are 2 different things.
Comment by Six Degrees of Separation Friday, Feb 6, 09 @ 12:15 pm
Ronald Reagan once said “Government does not solve problems, it subsidizes them.” This is a perfect quote for this stupidity.
Comment by Stayathomemom Friday, Feb 6, 09 @ 12:18 pm
Why school construction? Bricks and mortar putting people to work and new schools to boot. And if most cities are like Chicago, most of your construction workers and craftsman live in the burbs, so good for them, too.
Let’s face it, if you can’t get in in this bill at this time, with a Dem Congress and administration, the states and locals are on their own for good.
Comment by wordslinger Friday, Feb 6, 09 @ 12:23 pm
I don’t understand the reductions in transit and school construction. Isn’t one of the big goals here to BUILD things, creating jobs? Wouldn’t both these items do that?
Ah well. Stupid tough choices.
Comment by Concerned Observer Friday, Feb 6, 09 @ 12:24 pm
Those items don’t have any thing to do with stimulating the economy..Hope they cut more pork..
Comment by ironman Friday, Feb 6, 09 @ 12:28 pm
Ironman…building schools wouldn’t stimulate the economy?
Comment by Concerned Observer Friday, Feb 6, 09 @ 12:31 pm
Firefighters?!?!?!?!?!?!?
Comment by Qwerty Friday, Feb 6, 09 @ 12:36 pm
They can cut all they want from the senate bill. The real test will come in reconciliation. I think the leadership plans (hopes) to craft a more balanced bill behind closed doors. The building plans will find their way back in then.
Comment by Pot calling kettle Friday, Feb 6, 09 @ 12:38 pm
Here’s an idea for those most focused on the stimulus price tag - cut the AMT fix from the bill.
Congress would pass this legislation later in the year anyways, and since self-proclaimed economy experts like McConnell and Snowe want the bill closer to $800 billion…
Instead, you’ll force state governments to make more draconian cuts, which of course includes layoffs. But let’s instead ratchet up tax cuts that will be used to pay down debt and buy items manufactured overseas.
Another I-35 bridge collapse, or another Katrina, or another train derailment…guess that’s just “pork”. Gimme a break.
Comment by The Doc Friday, Feb 6, 09 @ 12:38 pm
Some of the cuts in infrastructure/public transit are probably negotiated on being revisited when the new transit bill gets addressed, which I believe is supposed to be this year. What many people fail to remember is that this stimulus bill isn’t the whole US budget, and things may get funded by bills later in the year. Expect to see most of the cut road repair/public transit projects to be re-introduced when the transit bill is debated.
Comment by South Side Mike Friday, Feb 6, 09 @ 12:47 pm
I think some cuts are warranted even from school construction. How about cutting “the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.” I see more crumbling schools in small towns with much more limited resources. Let the Pres. learn something about the rest of the country.
Comment by Hearing Voices Friday, Feb 6, 09 @ 12:49 pm
South Side Mike:
the Obama Administration and Congressional Leaders have already said that the transportation reauthorization bill will be delayed a year. they said this in anticipation of the economic recovery bill passing. What this tends to mean in Washington is that negotiations won’t begin on the reauthorization until a year from now. So we won’t see a reauthorization bill for 18 months to 2 years.
Comment by GA Watcher Friday, Feb 6, 09 @ 12:54 pm
I think this is more a spending bill than a stimulus bill. I have no problem with construction projects, but a stimulus bill should actually create LONG-TERM jobs, not just allow a rep to bring a chunk of bacon like a skating park.
Pot is probably on the money with the idea that this pork-a-polooza will be replaced by a more balanced version.
Comment by Slick Willy Friday, Feb 6, 09 @ 12:57 pm
While we’re debating the best way to spend a trillion dollars that don’t exist…
Let’s say you are facing a major personal crisis because you are flat broke, and deeply in debt.
What should you do?
A) Spend less money.
B) Spend more money.
C) Spend a lot more money.
Comment by Bubba Friday, Feb 6, 09 @ 12:57 pm
GA, I had not heard that. Thanks for the clarification.
Comment by South Side Mike Friday, Feb 6, 09 @ 12:58 pm
===Let’s say you are facing a major personal crisis because you are flat broke===
That’s just completely ridiculous. The international economic crisis wasn’t caused by the US government being broke.
Please, don’t do that again. Thanks.
Comment by Rich Miller Friday, Feb 6, 09 @ 1:09 pm
food stamps are the single best program for immediate economic stimulus. every economist agrees on this - Moody’s economist.com found it would product $1.73 of economic activity for every $1 invested in the program. http://money.cnn.com/2008/01/29/news/economy/stimulus_analysis/index.htm
it is a great stimulus! we need things like this that will stimulate the economy, not stupid things that advance people’s ideology.
Comment by cg Friday, Feb 6, 09 @ 1:13 pm
This is off topic, but did anyone notice this story off to the right?
Burris: “I Am in Debt.”
“I have legal bills, to the tune of $400,000.”
http://www.chicagopublicradio.org/Content.aspx?audioID=31980
Comment by Qwerty Friday, Feb 6, 09 @ 1:22 pm
GA Watcher and South Side Mike-
The previous federal transportation bill was extended 12 times before the current bill was approved. The current authorization was about 2 years late also.
http://www.fhwa.dot.gov/reauthorization/extension.htm
Comment by Six Degrees of Separation Friday, Feb 6, 09 @ 1:26 pm
Ok. Sorry, Rich.
Comment by Bubba Friday, Feb 6, 09 @ 1:33 pm
First of all I am a banker (no tarp participation) and a trained in economics. Just like past modern era recessions our basic problem is we are overly leveraged and we recover only when balance sheets (individual and business) balance sheets are repaired (reduced leverage).
There will be a period of time (say 2 to 3 years) where debt retirement/settlement will prevail. Government stimulus can help through this period with various desired “safety nets”, but there will be a point in time when government deficits has to disappear otherwise the government will upstage any credit that would go into the private sector that creates long term jobs.
If the feds want to stimulate the economy, they need to do it with spending or stimulus that naturally sunsets. It is hard for me to point to any federal program that has naturally sunset, but a term (short to intermediate) tax cuts both at the individual and business level (business in equipment and plant investments - individuals in creased $’s from their job to (a) retire personal debt and (b) rebuild their spending ability in the future. This needs to be across the board versus targeted to say the construction trades (infra-structure).
In my professional opinion what the congress is working on now is primarily a spending bill disguised as a stimulus bill.
Comment by bankman Friday, Feb 6, 09 @ 1:37 pm
@Bubba:
I think the scenario we’re dealing with is something more like:
Suppose you earn a living by making homemade widgets. Your neighbor Fred, on the other hand, produces homemade doodads, but he just so happens to buy a big widget aficionado and buys a considerable quantity of them from you. Similarly, you buy doodads from Fred. One day Fred finds himself deeply in debt, and decides to cut out all widget spending, so he can apply as much of his income as possible to paying down his debt. Problem is, now that Fred’s not buying any more of your widgets, your own income has significantly decreased, so you’re forced to curtail your doodad purchases, which in turn reduces Fred’s income and thwarts his ability to pay down his debt.
Multiply this scenario by everyone in the country, and you see the situation we’re faced with. Many people are significantly cutting back on their spending, perhaps because they’re in debt, their house isn’t worth as much as it used to be, their investments aren’t worth as much as they used to be, they’ve lost their job, or they fear they might lose their job. But when everyone stops buying things, the people that make things soon become unemployed, and they in turn buy even less, reinforcing the problem.
The purpose of a federal stimulus is to to employ people so they buy things, to create incentives for other people to buy things, or to buy things directly, therefore keeping the wheels of the economy turning until it can sustain itself.
Or something like that.
Comment by Nate Friday, Feb 6, 09 @ 1:40 pm
One person’s pork is another persons necessary spending. The Republican’s are playing this to the hilt by plucking individual projects about which they know nothing and complaining that it is pork. Tim Johnson shows how this can backfire.
Every district and constituency has worthwhile projects and programs that look like pork to outsiders. I don’t know if Milwaukee needs a new school or not, but declining enrollments tell me nothing about the condition of the remaining facilities. 15 vacant schools aren’t worth much if they were all built in the 1940’s. The best solution for Milwaukee might very well be to tear down old schools and build some new ones. I don’t know, but their congressperson probably does. I choose not to throw stones.
My hope is that our deciders will figure out how much we can afford to spend and put the money where it will do the most good. That will mean a little to every congressional district in the form of infrastructure (more to more hard hit districts) and to most socio-economic constituencies in the form of services or tax cuts. With respect to the services and tax cuts, my understanding is that lower income folks are more likely to spend more of what they get because it goes for necessities, so they should get more stimulus money.
Comment by Pot calling kettle Friday, Feb 6, 09 @ 1:42 pm
[…] From the Washington Post (hat tip Capitol Fax Blog): A group of Democratic and Republican senators sought to trim as much as $100 billion from the economic stimulus plan. Some of the most expensive items to be cut: […]
Pingback by Local: District 150 probably won’t get help from stimulus package | Peoria Pundit Friday, Feb 6, 09 @ 1:50 pm
Here some tidbits about spending on highways from the FHWA Road Information Program -
* Every $1 billion in highway construction creates 42,000 jobs.
* Of those 42,100 jobs:
* 19,750 are workers supplying highway construction materials and equipment;
* 14,500 are workers in businesses where construction dollars are spent; and
* 7,900 are workers at construction sites.
* Every dollar invested in the highway system yields $5.60 in economic benefits.
So your pork to build or reconstruct a road in your district, and put people to work, is a bad idea because those people aren’t my voters and the money isn’t spent in my district.
What ever happened to working for the common good?
Comment by Huh? Friday, Feb 6, 09 @ 2:05 pm
Pot -
What is your explanation of the multi-billion increases in spending for a variety of government agencies?
My other big problems with this bill are:
1. What happens when all the money runs dry, and Obama’s sexy new “green” industries have not caught on? We have been hearing about solar power for decades, but basic engineering problems remain, such as the low efficiency of solar circuits. There is no guarantee that the industries will be more than government research products when the well runs dry, and a command from The Messiah is not going to make it so.
2. What happens when China and the Middle East no longer wish to fund our additiction to borrowing?
Comment by Bubs Friday, Feb 6, 09 @ 2:08 pm
Differences between normal appropriations and a ’stimulus’ package explain much of the reaction of the Republicans and enthusiasm of the Democrats in pushing such a bill with so little examination. Niall Ferguson has an interesting analysis of the cause and cure of the actual recession here: http://www.latimes.com/news/opinion/commentary/la-oe-ferg6-2009feb06,0,6972232.column
Comment by walter sobchak Friday, Feb 6, 09 @ 2:22 pm
==2. What happens when China and the Middle East no longer wish to fund our additiction to borrowing?==
How about we stop importing their crap and rebuild America’s industrial base? We already have most of the world’s food, water, and plenty of fossil fuels and minerals. They need us a lot more than we need them. Make it cheaper to buy American made products and lay off foriegn oil. That’s where the green stuff comes in. We are just one or two breakthroughs away.
Comment by Bill Friday, Feb 6, 09 @ 3:10 pm
So more people are hurting, but cutting food aid and money for disadvanged kiddies?
Comment by Wumpus Friday, Feb 6, 09 @ 3:24 pm
There should be a separation of what is a stimulus package from just a gush of random government spending.
One thing I have not yet heard is a windfall profit tax on the companies who will be building these projects. Limited talent and equipment will boost profit margins. Secretive Mayor Daley wants to suspend the bidding process for his secret shovel ready projects.
It is a terrible folly to use these stimulus funds to pay for operational expenses. This mmeans the systems will not be reformed and an new debt will have been generated.
As the talking heads have termed this Washington fiasco bill, it is porculus, not stimulus.
The right thing to do is to generate a true stimulus bill, pass it and move on the regular spending.
Comment by Anonymous Friday, Feb 6, 09 @ 3:50 pm
This bill is so flawed Obama should shelve it and start over. Obama seems to be in constant campaign mode. He needs show leadership, not give campaign type speeches. Obama administration has been a disappointment to date.
Comment by Ken Friday, Feb 6, 09 @ 3:57 pm
==What is your explanation of the multi-billion increases in spending for a variety of government agencies?==
When the Fed Gov’t spends money, it generally has to go to a state or through some agency. Why create a new agency to hand out stimulus money when the administrative structure is already in place at existing agencies?
Example: Want to give stimulus to Universities and meet the goal of expanding research in certain areas: beef up existing NSF grants programs (there are already proposals on the shelf ready to go) or create a new grant program under an existing section.
Comment by Pot calling kettle Friday, Feb 6, 09 @ 4:07 pm
…Several of the GOP’s most prominent governors blasted the stimulus plan making its way through Congress Thursday, urging Senate Republicans to resist passing the bill and taking aim at what they called unnecessary spending in the package.
–
It’s a jobs bill, not a slaves bill. You need to spend money on paying Americans wages…
Duh.
Instead of griping about nebulous “unnecessary spending” I’d like to hear what they plan to remove from the jobs bill in order to even get to a 5% reduction.
And PS, it was the Senate GOPs adding in $100+ billion in additional tax cuts that popped the price tag up to $900bil … The House GOPs were balking against the jobs bill when it was $800bil. (Gee, do ya think they just added in the extra $100bil so they could turn right around and say, “Lookee here! We cut $100 billion in ‘unnecessary spending!’”)
–
Ken,
With that attitude it’s going to be a long four years for you … just like it was a long 8 years for the folks who thought Bush 43 was in constant campaign mode (ie, engaging in … gasp … politics).
Comment by Rob_N Friday, Feb 6, 09 @ 5:21 pm
The loss of the 39 billion in educational funding is going to be very hurtful in Illinois. Be ready fro 10-20% education cuts and big layoffs. Then a bigger quicker tax increase, because we would not be able to buy some time with the federal money. What were those senators thinking.
Comment by SIUPROF Saturday, Feb 7, 09 @ 10:31 am