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 Well, we're one week into the new administration and what have we learned so far? The President appears to have his primary focus on the economy, where it should be. He has had a number of meetings with congressional leaders of both parties and it appears that the proposed stimulus package will be close to what he wants. Reports are that the President wanted 75% of the total stimulus to get into the economy by September 2010. As things stand now, it appears that he will wind up with slightly less, about two-thirds, of the spending falling before that date. As things usually go in Washington, this might be called a victory.
The initial report on the stimulus package issued by the Congressional Budget Office (CBO) stated that only 38% of the money appropriated would be spent early on. This analysis however was based only on the spending programs contained in the overall package. It omitted the tax cuts, unemployment benefits and state aid portions of the bill. A second report from the CBO explains the difference. It notes that the money appropriated for these purposes will get into the economy much faster. In fact about 85% of those dollars will be spent before September 2010. When combined, the overall result is the two-thirds, or more precisely 64%, of the overall stimulus package that will be put to work in the economy before 2010.
As noted above, that might be called a victory. Might. The problem is those infrastructure and other spending programs. The danger in electing any Democrat to the presidency was always that after twelve years of Republican control of the House and then two years when President Bush and the Republicans in the Senate could veto or block their efforts, the Congressional Democrats would ride roughshod over whichever Democrat was elected. I'd be more comfortable if President Obama had been able to hit his 75% target. As it is, the question of who will be the primary driver of spending decisions over the next four years is still up in the air.
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