Today, and probably for the next week or so, we’ll see flares sent up by various people in both political parties about the structure, size and details of President-elect Obama’s economic stimulus proposal.
Among Democrats, Obama’s economic team has already gotten an earful from Senate Democrats who appear concerned that too much in the way of tax cuts made it into the package. The highly influential Nobel Laureate economist/columnist Paul Krugman weighed in this morning with a formal complaint that the package isn’t large enough to turn the economy around.
Republicans, meanwhile, generally fall along the range that runs from those promosing visigothic assaults on anything Obama proposes, to those who will support tax cuts only, to those who are making conciliatory noises while laying down markers about the size or composition of the stimulus package that make cooperation unlikely.
In discussions with Senate Democrats, it appears, Team Obama stressed that the President-elect’s strongest constituency at present in taking the current approach happens to be the public. And the nature of that support makes White House-congressional negotiations over the stimulus package especially tricky. On the one hand, big majorities want to see action taken on a cooperative and “bipartisan” basis. On the other hand, neither party in Washington has anything like the credibility of Obama himself. And above all, anything that looks or smells like the September financial bailout will quickly get into trouble.
In terms of public perceptions, it probably wouldn’t hurt Obama to listen carefully to folks on the Hill and then ignore at least some of their advice. Republicans will almost certainly make that easy for him, eager as they are to find the moment when they can declare total war and try to turn back the clock to 1993. As for congressional Democrats, anything that looks like an effort to engage in wheeling and dealing will only be helpful to the extent that it gives Obama the opportunity to say no.
Maybe Paul Krugman is right that the whole exercise is too little, too late, to save the economy from a prolonged and very deep recession. I’m not an economist. But the one thing we do know is that public confidence is critical to both the economy itself, and to any steps taken to revive it. And that’s the resource Barack Obama must maintain through the tough days just ahead.