Is a Second Stimulus Around the Corner?
McConnell said the president appears to believe that voters will “magically forget that government spending is completely out of control.”
House Speaker John Boehner (R-Ohio), who serves as the GOP’s lead negotiator in the fiscal cliff talks, was no less abrasive about Obama’s proposal. In a letter sent to the president and signed by seven members of the House Republican leadership outlining their plan for deficit reduction, the lawmakers said the proposed increase in spending “only confuses the public debate.”
“What’s worse, the modest spending cuts in this offer are cancelled out by the additional ‘stimulus’ measures the administration is requesting,” the letter read.
“We cannot in good conscience agree to this approach, which is neither balanced nor realistic.”
Boehner claims the stimulus could reach $600 billion. The administration insists it would be held to about $200 billion.
The dubiousness expressed by GOP lawmakers is backed by various conservative organizations, including the Heritage Foundation. In a report titled, “Job Market Struggles in November,” released on Dec. 7, authors Rea S. Hederman Jr. and James Sherk assert that current economic conditions require Congress to cut the deficit by cutting spending.
“Instead, the administration proposes the opposite approach,” the report said. “The President has suggested spending tens of billions more on stimulus programs in addition to his proposed tax hikes. Congress should reject this approach and close the deficit through deep spending cuts.”
But Treasury Secretary Tim Geithner, in a recent interview on the CNN program State of the Union, maintained that the stimulus price tag is “something we can afford,” adding that it is a “modest investment in making this country stronger.”
The Congressional Budget Office has reported that the $800 billion stimulus approved by a Democratic-controlled Congress during the deepest part of the recession in 2009 continues to have a positive impact on the nation’s economy, responsible for an additional 200,000 to 1.2 million jobs during the second quarter of 2012.
But the effects of that stimulus are ebbing at a time when unemployment is finally in decline. The CBO maintains the most significant effect came during the third quarter of 2010 when as many as 5.1 million held jobs that would not have been available without the law’s passage.
Regardless, it appears a stimulus could be in the offing even if the Obama plan fails to pass congressional muster. The Federal Reserve Board meets on Wednesday and generally is expected to provide its own, according to financial analysts.