The bailout package failed. Republicans didn’t line up behind their leadership, unconvinced about the size, the urgency or even the rightness of rescuing tycoons from their own mistakes.
Congress may soon try again, especially because the market showed its contempt for the failure. The temptation will be to scale back, to find a solution below the $700 billion range that’s kinder to taxpayers and the deficit.
That’s the wrong impulse. The deal shouldn’t be scaled back, but sweetened.
The $700 bailout was aimed at the financial economy, not the real economy. It aimed money at Wall Street, not at Main Street.
Money for Main Street might have looked like the $56 billion stimulus bill the Republicans killed in the Senate last week, the latest in a historically high line of filibusters.
The bill was intended to start rebuilding our infrastructure. $8 billion for roads; $2 billion for mass transit. It would have extended unemployment insurance benefits and provided funding for state Medicaid programs and food stamps. It would have put money in the hands of people who spend it, and prevented cuts in vital services.
The bill received 52 votes in favor and 42 against. A similar bill already passed the House. In a functioning democracy it would have been sent to the President for signature.
If you think it’s bad now, just wait. After October 1 many state and local governments will start a new fiscal year. They’ll finally have to cut things they’ve been paying for with last year’s money.
Leaders shouldn’t see the stimulus package as spending. They should see it as jobs. One billion dollars of federal funding in transportation infrastructure can create up to 47,500 jobs. $20 billion in deferred school maintenance could generate 250,000 jobs.
Government spending is THE counter cyclical answer to recession. It is way to put people to work when the business cycle turns down. It worked for FDR and it works overseas. We need it now.
It may sound ironic, but a bigger bill that does more things for more people may stand a better chance of passing.
This is not the time to worry about deficits or offsets. This is the time to spend. Put people to work. Grow the economy. Shrink the deficit. Grow by growing; not by cutting.
