Obama's case for action
Spending big on the economy is less risky than doing too little, he asserted Thursday.
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“We’re going to need a fiscal stimulus in the form of tax cuts and increased government spending,” Mr. Feldstein told a congressional panel. “It pains me to say that because I’m a fiscal conservative who dislikes budget deficits and dislikes increases in government spending.”Skip to next paragraph
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But US funds already committed to the rescue of mortgage giants Fannie Mae and Freddie Mac and other financial institutions have helped drive the federal deficit so high that many on Capitol Hill are gulping at the idea of almost $1 trillion in new government spending.
On Jan. 7, the Congressional Budget Office estimated the 2009 deficit at a record $1.2 trillion. A new stimulus package could send that to $2 trillion, notes Chris Edwards, tax director of the Cato Institute.
“Even the biggest critics of Washington’s spendthrift ways never thought they would see a number like that,” says Mr. Edwards, who opposes the stimulus package.
Wary reaction from GOP lawmakers
Republicans on Capitol Hill remain wary of the bill’s price tag, though many acknowledge that the economy needs help.
Obama’s concerted efforts to push for his package appear designed to counter such hesitance.
That may not be too surprising, given the current climate of economic malaise. Still, the amount of action involved is unprecedented for a president-elect, says Julian Zelizer, a history professor at Princeton University in New Jersey.
Obama has been careful to note that the United States has only one president at a time, particularly when he’s been asked about delicate foreign-policy questions. But on the economy, he may already have become the defacto chief executive.
“There is something good here: the idea that a president-elect is getting his act together early on,” says Dr. Zelizer.
Obama is getting a certain comfort level with presidential responsibility already – and with getting feedback on his ideas. At the same time, the more he lays out his plan, the more he provides targets to his opponents, says Zelizer.
They “can start to put together a plan to take him on,” says the Princeton professor.
- Staff writer Gail Russell Chaddock in Washington contributed to this report.