{"id":14344,"date":"2008-01-24T14:15:45","date_gmt":"2008-01-24T19:15:45","guid":{"rendered":"http:\/\/www.thecarpetbaggerreport.com\/archives\/14344.html"},"modified":"2008-01-24T14:15:45","modified_gmt":"2008-01-24T19:15:45","slug":"officials-strike-deal-on-stimulus-plan-but-is-it-any-good","status":"publish","type":"post","link":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/officials-strike-deal-on-stimulus-plan-but-is-it-any-good\/","title":{"rendered":"Officials strike deal on stimulus plan — but is it any good?"},"content":{"rendered":"

The good news is, Congress and the White House struck a tentative deal<\/a> on an economic stimulus plan. The bad news is, Congress and the White House struck a tentative deal on an economic stimulus plan.<\/p>\n

House leaders and the White House on Thursday reached a tentative agreement on an economic stimulus package of roughly $150 billion that would pay stipends of $300 to $1,200 per family and provide tax incentives for businesses to encourage spending.<\/p>\n

A House aide close to the negotiations said that Speaker Nancy Pelosi of California and the Republican leader, Representative John A. Boehner of Ohio, reached an “agreement in principle” after Ms. Pelosi agreed not to include two proposals that had broad support among Congressional Democrats: an extension of unemployment benefits and a temporary increase in food stamps.<\/p>\n

In exchange for those concessions, the Bush administration and House Republicans agreed that the stipend of at least $300 would be paid to all workers receiving a paycheck, even those who did not earn enough to pay taxes last year.<\/p>\n

“The vast majority of low-income people are going to get a minimum of $300,” said a White House official familiar with the outlines of the accord.<\/p><\/blockquote>\n

The “tentative” agreement was struck between House members and the administration, which hardly signifies a done-deal. Senate Dems have clearly emphasized what they see as the need for extending unemployment benefits and increased food stamps, ideas Republicans dismissed today as “extraneous spending.”<\/p>\n

Sen. Max Baucus (D-Mont.), chairman of the Finance Committee and one of the chamber’s most fiscally conservative Dems, reiterated his interest in extending unemployment benefits. When Baucus criticizes a stimulus bill from the left<\/i>, you can assume Republicans are happy with the deal.
\n
\nKevin argues<\/a> that, on the whole, it could have been worse, especially given that today’s deal limits rebates to single taxpayers who earned up to $75,000 or couples with incomes of as much as $150,000.<\/p>\n

Virtually everyone who paid payroll taxes will receive $300 and the $150K household cutoff will prevent at least some of the wastage we’d get from giving money to people who are likely to just save it instead of spending it.<\/p>\n

(And what’s wrong with saving money, you ask? Nothing. That’s what we’ll do with our rebate, and national savings will thereby increase by $1,200. Hooray! Unfortunately, this is all funded by deficit spending from the feds, and increasing the deficit reduces<\/i> national savings — in this case by $1,200. Net effect to the economy: pretty close to zero.) […]<\/p>\n

Bottom line: I doubt that this plan is going to provide an awful lot of stimulus. But it might do a
\nbit of good, and certainly won’t do any harm. In today’s world, that counts as a win.<\/p><\/blockquote>\n

Paul Krugman, meanwhile, has a less optimistic<\/a> view.<\/p>\n

If this description is correct, the stimulus bill will be a real disappointment. As I pointed out in an earlier post, economic theory — Milton Friedman’s theory! — suggests that if we want stimulus funds spent, they should go to people in temporary economic difficulty who are likely to be liquidity-constrained. But it appears that most of the measures that would do that — benefits to the unemployed, food stamps, aid to state and local governments — are being bargained away. Even the tax credit is apparently not fully refundable, so those who need it most, and are most likely to spend it, won’t get the full amount.<\/p><\/blockquote>\n

There’s probably plenty additional wrangling left to do, with the Senate weighing in with its own take, which the White House probably won’t like at all. Stay tuned.<\/p>\n","protected":false},"excerpt":{"rendered":"

The good news is, Congress and the White House struck a tentative deal on an economic stimulus plan. The bad news is, Congress and the White House struck a tentative deal on an economic stimulus plan. House leaders and the White House on Thursday reached a tentative agreement on an economic stimulus package of roughly […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[617],"tags":[],"class_list":["post-14344","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/posts\/14344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/comments?post=14344"}],"version-history":[{"count":0,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/posts\/14344\/revisions"}],"wp:attachment":[{"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/media?parent=14344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/categories?post=14344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stevebenen.com\/thecarpetbaggerreport\/wp-json\/wp\/v2\/tags?post=14344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}