Sean Trende of RealClearPolitics makes a strong case that the Obama White House could have succeeded in passing another round of fiscal stimulus had it devoted enough political capital to doing so. Trende is arguing in part to counter the emerging conventional wisdom on the left that the president’s coverage expansion wasn’t a distraction from his efforts to revive the economy.
Noam Scheiber’s reporting suggests that the president believed that more stimulus was needed, but that pursuing it would prove too politically costly:
Obama worried that the jobless recovery could define his second year in office and wanted to address it proactively. The problem was that the chances of passing another several hundred billion dollars of stimulus were looking increasingly remote. When Romer dwelled on the idea later in the year, the frustrated president came close to losing his temper. “Well, the American people don’t think it worked, so I can’t do it,” he groused. At best, the president felt, Congress might be able to pass some scaled-down measures, such as giving companies targeted incentives to hire, maybe some additional infrastructure investments and money for “greening” old buildings. But given the direction of public opinion, even this would soon look ambitious.
Scheiber, a firm proponent of the fiscal stimulus law, is very clear on what happened next:
The irony is that the stimulus really was working. The economy started growing again sometime in the summer after almost two years of shrinkage. And although unemployment kept ticking upward, the job losses that had gushed forth in January and February had nearly stopped by the end of the year. All of the nay-saying notwithstanding, a sustained but honest campaign by the White House might have laid the groundwork for another substantial round of jobs-related spending. But that proved impossible. The administration by then had its hands full with something else—something that would rival even the dreaded stimulus for the scorn it inspired in voters. [Emphasis added]
As Scheiber goes on to explain, the key thing that happened is that the president and his advisors never anticipated that their coverage expansion effort would take as long as it did. Rather, they had assumed that they would achieve victory on coverage expansion and (incredibly) energy policy by the summer of 2009, thus allowing them to return to jobs and the economy by the fall. This, of course, isn’t quite how things played out.
Trende, like Scheiber, also believes that a sustained White House campaign could have laid the groundwork for another round of stimulus, though he makes his case without endorsing the idea as such:
If the Democrats could pass a massive health care bill that was opposed by a majority of the American people, that was perceived as increasing the deficit and that managed to touch just about every hot-button issue under the sun, from immigration to abortion, they could have passed another stimulus. They might have had to exempt Nebraska in order to do it, but they could have done it.
In fact, I think the pitch would have been pretty simple. Show congressmen and senators the Romer-Bernstein chart, as adapted by conservative bloggers. Note that the dots were well above the worst-case scenario before the stimulus went into effect. And convey to them that, without more stimulus spending, those dots were going to remain above that worst-case scenario line well past the November midterms and that their opponents would be featuring this chart non-stop in 30-second ads beginning in September of 2010.
Trende makes another point that is often neglected:
Finally, recall that Congress actually did pass a number of smaller stimulus measures during the 111th Congress, which collectively spent a not-insubstantial amount of money. These included: the Helping Families Save Their Homes Act of 2009 ($8 billion spent from 2009 through 2014); the Worker, Homeownership, and Business Assistance Act of 2009 ($6 billion spent from 2010 through 2014; $33 billion in tax cuts in 2010); the Travel Promotion Act of 2010 ($750 million spent from 2010 through 2014, offset by revenues from increased travel); the Hiring Incentives to Restore Employment Act of 2010 ($11 billion from 2010 through 2015); and the Small Business Jobs and Credit Act of 2010 (about $30 billion in spending and $55 billion in tax cuts in 2011).
Many of these bills were estimated to pay for themselves over the course of the decade, but in the short-to-medium term, they represented additional deficit spending, and a nice jobs agenda.
One gets the strong impression that President Obama made a political bet regarding what he should do with his good-sized legislative majorities before finding himself in a position, after the 2010 midterm elections, in which he needed Republicans to back a course of action that (in their view) would damage the economy’s long-term growth potential while giving it a short-term boost. Why would congressional Republicans do such a thing? And if the president demonstrated incredibly poor political judgment during the 111th Congress, do we have any reason to believe that he has learned his lesson?
Note that during his speech in Ohio earlier today, the president essentially said that he both needed to be reelected and that Democrats needed to win both houses of Congress to repudiate the Republican agenda. One is reminded of President George H. W. Bush’s efforts to run against congressional Democrats in 1992. Contrast this with President Clinton’s 1996 reelection campaign, when he had demonstrated that he could work with congressional Republicans yet he could also best them in political combat. The parallel is striking.