The Stash

Grading The Stimulus Compromise

Okay, I was wrong--I'll be the first to admit it. The conference committee didn't end up moving nearly as far toward the House version of the stimulus bill as I thought it would. The compromise, from what we know of it, looks much more like the substantively inferior Senate version: the cuts to state aid and school construction and COBRA subsidies more or less stand. So does the $70 billion Alternative Minimum Tax relief measure, which may be a perfectly fine idea, but isn't stimulus under any reasonable definition of the term. This is disappointing, to say the least. (The only real improvement is the rollback of the wasteful car and home-buying tax credit--but even that stings, since I'm currently in the market for a house...)

I think it's going to be insufficient. But I'll keep an open mind on the White House and congressional Dems' role until I can find out what the political calculation was. (That is, was there no hope of passing something bigger in a timely fashion, or did they just overestimate the Republicans' leverage on this? Is the hope to come back and do more later in the year? Thoughts welcome...)

Alas, it turns out I was right about one thing: The Republicans did whine that the conference committee had reached a deal in the "dead of night." How surprising. ABC's Rick Klein has the details.

Just back to the AMT for a minute, since it's pretty upsetting. Tom Harkin sums up the problem in the Times piece:

Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. "It's about 9 percent of the whole bill," he said, "which we were going to do later this year in a tax bill. Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery. This makes no sense whatsoever."

Agreed. In fact, I don't really understand the rush to proclaim this a historic bill on the basis of its price tag. There was a lot of talk this afternoon about the bill's unprecedented size, and it is unprecedented. But the federal budget features over $1 trillion in discretionary spending every year. If the point was simply to pass something big without worrying about whether it stimulates the economy beyond what we were going to spend anyway, you could just pass a $2.2 trillion bill funding the discretionary part of the budget for two years and call it a stimulus. It would be big, but also kind of beside the point, no? Unfortunately, that's pretty much what we've done with the AMT portion of this--and, I suspect, several other portions.

At the very least, shouldn't we call it a $719 billion bill rather than a $789 billion bill?

Update: Edsall sees it more or less the same way.

--Noam Scheiber

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