In the first minutes of his presidency, Barack Obama laid out a candid assessment of our current crisis. “Our economy,” he said at the start of his inaugural address, “is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age.” He pledged “action–bold and swift” to create new jobs, a new national infrastructure, a new energy plan, a new healthcare system, renewed schools and universities. In an unmistakable message to antigovernment fiscal conservatives, he warned those “cynics” who “question the scale of our ambitions” that failure of nerve at this crucial moment is not an option and that we must aspire to nothing less than “remaking America.”
It was a forceful start to the first hundred days of Obama’s administration, a clear sign that a new era–based on equal measures of realism, grit and hope–had begun. But nations are not remade in oratory alone, and the next ninety-nine days will be a decisive test of the administration’s resolve and vision. It is therefore disappointing that the economic stimulus package proposed by Obama and Congressional Democrats is only half there.
At $825 billion, it is larger than proposals discussed as recently as the new year, but it is still short of the more than $1 trillion leading economists say should be the floor–not the ceiling–of any stimulus plan. It favors spending over tax cuts by a 2-to-1 margin, but the scale of tax cuts ($275 billion) still concedes too much to the supply-side crowd. It provides much-needed relief to states crushed by shortfalls in Medicaid, education and unemployment benefits funding; but even more of this spending–which circulates more immediately into the economy than tax rebates–is needed. It contains innovative projects to develop a smart electricity grid and green technologies, to weatherize homes and modernize schools and healthcare information systems. But the plan still invests too little in the physical and social infrastructure development that will build the economy’s long-term productivity. In many areas it gives priority to traditional spending projects over newer, greener investments. It devotes, for example, $30 billion to build highways but only $10 billion to mass transit, when Chicago alone has more than $7 billion in “shovel-ready” transit projects waiting in the wings. In short, the economic stimulus package is not big enough, bold enough or forward-looking enough to meet the challenges Obama has identified.
The cost of political expediency may be diminished effectiveness. By putting forth a stimulus package intended to garner broad bipartisan support–Obama’s aides have said that they hope to get eighty votes in the Senate, far more than required for a simple majority or a filibuster-proof margin–the administration is missing some proven solutions. A recovery plan could, for example, increase Social Security payments, which would help an aging and increasingly impoverished population. It could beef up welfare–the plan calls for a meager $2.5 billion temporary boost–and create a jobs program for out-of-work Americans. It could further scale up Medicaid payments and broaden eligibility–laying the groundwork for universal healthcare. And as part of its restructuring of TARP II, it could require mandatory renegotiations of mortgages and create a federal housing trust to keep people in their homes. Instead, the next round of TARP funding continues to subsidize banks and does little to reform the financial system. At another time of economic crisis in our history, Roosevelt’s New Deal aspired to provide relief, recovery and reform; Obama’s first hundred days must do no less.