Stimulus Doesn’t Need to Come in the Form of One Big Omnibus Bill
When writers like Jonathan Chait claim President Obama shouldn’t be blamed for not passing enough stimulus at the begin of his term, their standard go-to defense is that there is no way Obama could have gotten the Senate to pass a version of the American Recovery and Reinvestment Act of 2009 with a price tag of over $800 billion. They then use this point to make a huge logic leap to claim Obama did all he could do.
While it is possibly true Obama couldn’t have gotten that one particular bill to be larger, that is only important if you falsely believe the only way Congress can enact measures that would stimulate the economy is be putting them in one giant omnibus bill labeled a “stimulus package.” The only reason all the stimulus needs to be combined in one giant omnibus package is if you want to have a big signing ceremony.
There is no reason Obama couldn’t have gotten Congress to pass a series of smaller jobs/infrastructure bills. Additionally, he could have hidden stimulus components in other larger bills, or focused more on enacting automatic stabilizers that would appear cheap in an initial CBO score but have a big impact if the economy took a turn for the worse.
With huge majorities in Congress and the ability to use reconciliation to pass laws with a simple majority in the Senate, it is absurd to argue Obama couldn’t have found some ways to injected more money into the economy early on if he was determined to. Does anyone really think that if in early 2009 after the ARRA, Obama had pushed for the quick passage of $35 billion bill to modernize waste treatment plants to prevent raw sewage spills the 60 Democrats in the Senate would have refused to pass it?
Probably the biggest example of a missed opportunity to hide stimulus in a large bill was the health care law. They could have chosen to start some of the Medicaid expansion right away while including a stronger automatic Medicaid funding stabilizer in the law that would provide states with more Medicaid funds when unemployment is very high. That alone could have been an additional $80 billion in stimulus this year.
The White House made a decision based on economic assumptions that turned out to be very wrong. Obama simply made a mistake. The fact that Obama has now twice needed to ask for more stimulus from Congress, when the Democrats have less control, should make it abundantly clear to everyone on the left that the administration erred by not asking for more stimulus when they the ability to get it.
The problem was not that Obama couldn’t have gotten more stimulus passed through the last Congress. The problem was Obama incorrectly believed the ARRA was enough and made the huge mistake of not trying to find ways to enact more stimulus early on in his term. Trying to pretending Obama didn’t in hindsight make a serious mistake only makes it harder to convince people we need more stimulus now.