Stimulus Lessons

The passage of an economic recovery package was never going to be a particularly clean or easy process. We have a brand new president and Congress, with a Republican minority prepared to sacrifice good policy for partisan victory. We have the worst economic crisis in decades, which appears to be gathering momentum at a frightening pace. And so we have the pressure to act boldly and very swiftly — pressure that might have been reduced by the passage of a smaller, stop-gap stimulus bill last session, but of course legislators were preoccupied with the automakers at the time.

Under the circumstances, the proposed stimulus package isn’t really that bad. It’s of a good size, it combines immediate and sustained spending and tax cuts, and it seems quite passable. We could have done much worse.

But as the pre-passage postmortems begin to roll out, it does seem clear that things might also have gone better. The potential of a transformative stimulus has not been fulfilled, leaving a bad taste in the mouths of many progressives. And I think we ought to learn a few lessons from the process.

Our infrastructure and energy policies need to be drastically overhauled. This is going to require careful forethought — and time. New initiatives in the stimulus might well complicate or undermine later attempts at reform. The simplest example is the highway versus transit debate; it’s difficult to make headway on goals to reduce emissions and vehicle miles traveled while funding lots of new lane miles. Better to set up new guidelines for local, state, and regional planners, along with new funding streams and standards. But that can’t be done in a month.

And it isn’t necessary to do it in a month, given the other stimulus avenues available. The combination of tax cuts with a massive plan to support state and local spending — on benefits, but also on infrastructure projects already in progress or operation — would likely have provided all the immediate stimulus we require. And this could have (and should have) been paired with efforts to expedite follow-up bills addressing infrastructure needs and energy policy. Those bills could then be tailored to function as stimulus as necessary; initial, planned deficit spending could give way to revenue-supported spending. Adding in efficient taxes to kick in after recovery (and there are options aplenty — carbon tax, congestion tolling, and increased gas taxes are all options) would ease long-term debt concerns.

In short, the administration should have acted boldly and swiftly, but also pointedly. The moment it became apparent that other priorities couldn’t easily be squeezed into the bill given its constraints, they should have been set aside, to be handled later.

But as I mentioned last night, I think the Obama team will learn a great deal from this experience. I expect subsequent legislative pushes, on health care and energy and infrastructure, will be much improved by this trial by fire. And hopefully, progressives will also learn from the experience. We all feel pressure to have our pet issues addressed immediately, particularly given the fact that solutions to many challenges are complementary. But we’re going to need patience. It was, perhaps, a bit unreasonable to expect a dramatic infrastructure overhaul in this time-sensitive bill. We need to be able to give the leadership the time to get the policy right.


  1. Dave Reid says:

    True but it should be pointed out that us “progressives” are questioning “our” own guy, and you know what that is a good thing. Further like you say we all need to learn from this and figure out how to be better organized in the future.

  2. Doug says:

    “Our infrastructure and energy policies need to be drastically overhauled. This is going to require careful forethought — and time.” I agree and all the more reason for energy and infrastructure not to be part of the stimulus bill.

    I think you would be fairer not to single out Republicans for sacrificing good policy for partisan victory. The amount of stimulus going directly to schools for ongoing costs is more than fishy to me.