Election-Year Deficit Fears Stall Obama Stimulus Plan - WaPo

[WillyT]

Election-year deficit fears stall Obama stimulus plan
By Lori Montgomery
Washington Post Staff Writer
Saturday, June 19, 2010; A01

<snip>

Barely a week after President Obama tried to re-energize his push for more spending on the economy, his agenda is stalled on Capitol Hill, mired in election-year anxiety about the deficit.

Congress has delivered only about a quarter of the $266 billion in "temporary recovery measures" the president sought in his February budget request and ignored much of the rest. There is unlikely to be another "recovery" check for Social Security recipients. Come December, Obama's "Making Work Pay" tax credit -- the signature initiative he regularly touts as a tax cut for 95 percent of Americans -- will probably be gone.

Even the state aid that Obama last week called critical to preventing the layoffs of hundreds of thousands of teachers and other government workers is foundering. After days of talks, frustrated Democratic leaders in the Senate failed again Thursday to muster the 60 votes needed to approve the cash and left town for the weekend with no clear path forward.

If Congress doesn't provide additional stimulus spending, economists inside and outside the administration warn that the nation risks a prolonged period of high unemployment or, more frightening, a descent back into recession. But a competing threat -- the exploding federal budget deficit -- seems to be resonating more powerfully in Congress and among voters.

Whether or not Obama's directive to spend more now and tackle the deficit later -- which he laid out in a letter to Congressional leaders Saturday -- is the right economic medicine, some lawmakers say it sounds like political doublespeak outside the Beltway. Polls show most people don't think Obama's first stimulus package worked, and they are sending mixed signals about whether Washington should spend more on jobs or start minding the national debt.

Administration officials are forging ahead, theorizing that voters would be even angrier if Washington skipped the additional spending and unemployment began to climb again. The White House is also trying to do a better job of selling the original $862 billion stimulus package, enacted last year, which has gotten high marks from many economists.

"This is an environment in which there's a great deal of jaundice about government and government spending," White House senior adviser David Axelrod. "But it's foolhardy to suggest that we should walk away from the things we need to do to continue recovery efforts as a way to deal with our fiscal problem."

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More: http://www.washingtonpost.com/wp-dyn/content/article/2010/06/18/AR2010061805607_pf.html

:banghead:

We're gonna do it to ourselves AGAIN!!!

:argh:

[Frustratedlady]

1. If these clowns would work harder to turn this country around, they wouldn't need

to oppose every single change that comes down the pike.

Don't they realize they are losing votes because they aren't accomplishing anything but playing politics? That goes for the Dems, too.

Time to move out of the sandpile and act like adults, rather than kindergartners. Either push, pull or get the hell out of the way.

[jwirr]

2. We are at the crossroads - are we going to follow FDR or Hoover? nt

[DJ13]

3. This is Obama's own fault....... seriously

He formed a deficit commission and repeatedly tries to out Republican the Republicans on talking tough about the worries of deficits, so why does he think he can now talk about the (real) need for more stimulus after that?

[Davis_X_Machina]

4. Any second-round stimulus...

...was dead before the Catfood Committee met in Auguust for the first time. The entitlements commission was a condition -- not baked into the legislation, but a condition nonetheless -- of the stimulus bill getting passed in the first place, from the first days of the Obama administration. And it was deficit-hawk-ish Democratic reps and senators who were responsible for setting the condition.

[msongs]

5. Obama's stimulus plan for wars and more wars go forward unaffected nt