Fiscal Stimulus: Senator Dodd Wants More Bang for the Buck But Boehner Objects
Seems BNA has been following the fiscal debate and reports the following:
Dodd said he would like to see infrastructure spending in the package leaving the Senate and said Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Committee Chairman Max Baucus (D-Mont.) have also expressed an interest in seeing food stamps and unemployment insurance extensions added to the package. Dodd said Paulson expressed a willingness to work with the Senate on those issues, but added, “I don’t think he’s enthusiastic about it.” In a statement issued later, House Minority Leader John Boehner (R-Ohio) urged the Senate to accept the package. “We negotiated a solid bipartisan agreement that the White House will support. It would be irresponsible for Senate Democrats to load this bill up with pork and other spending,” Boehner warned.
Naturally! Boehner is following the GOP line that we should add to the deficit but not really concern ourselves with the most bang for the buck. To be fair, I’m sort of agreement with Andrew Samwick and Greg Mankiw in questioning whether we really do need to add to the deficit at all given the FED’s aggressive easing. After all, the PG in PGL stands for ProGrowth. Less fiscal expansion and more monetary ease – at least in theory – says lower interest rates and more investment demand. But maybe Lawrence Summers has a point that monetary policy alone won’t be enough. If he’s right, however, why don’t we has the least impact on the deficit by maximizing the bang for the buck? Oh wait – that doesn’t fit well within the political agenda that Boehner’s party is pushing. Never mind.