Tags: S | Word | Washington | stimulus

Don't Use the ‘S’ Word in Washington

Monday, 13 Sep 2010 11:53 AM

"Stimulus" has become a dirty word in Washington.

President Barack Obama hopes to prod the sluggish economy ahead of the November congressional elections, but he has steered clear of portraying his latest proposal as a second stimulus package along the lines of last year's $814 billion effort.

At a White House news conference on Friday, Obama said he has been working to "stimulate" the economy, but declined to portray his package of tax cuts and construction spending as a "stimulus."

"There is no doubt that everything we've been trying to do is designed to stimulate growth and additional jobs in the economy," Obama said, when asked whether his latest package was a second stimulus.

The dreaded "stimulus" label may mean the difference between success and failure in Congress.

Voters also think that last year's stimulus package, a combination of tax cuts, aid to states and construction spending, has failed to blunt the impact of the worst recession in 70 years.

Only one quarter of Americans surveyed by CBS News in July thought the stimulus had made the economy better.

More Americans now place a higher priority on reducing the budget deficit than spending to help the recovery, according to a July survey by the Pew Research Center.

However, the nonpartisan Congressional Budget Office says the stimulus package put millions of people to work and raised national output by hundreds of billions of dollars.

"When you put all the things we've done together, it has made a difference," Obama said. "Three million people have jobs that wouldn't have them otherwise had we not taken these steps. The economy would be in much worse shape."

As voters grow increasingly anxious about record budget deficits, Democrats have largely abandoned the argument that short-term deficit spending will help boost the economy.

Several stimulus efforts foundered this year in the face of Republican opposition, and economists say it is now too late to move the needle before the November 2 elections.

With the unemployment rate still stuck near 10 percent, Democrats are finding it hard to argue that the unemployment rate would be several points higher without last year's stimulus package.

Economic concerns could cost Democrats control of the House of Representatives and the Senate, and Republicans say spending is out of control.

"Americans want to know that Washington is going to stop the reckless spending and debt, the burdensome red tape and job-killing taxes," Senate Republican Leader Mitch McConnell said in a statement shortly after Obama's speech.

In the face of this, Democrats appear to have lost their appetite for ambitious deficit spending, let alone anything carrying the "stimulus" tag.

Obama's latest proposals hew more toward the business tax breaks that Republicans favor, instead of New Deal-style public works programs backed by liberals.

His plan would allocate $50 billion for infrastructure upgrades, permanently extend the research and development tax credit, and allow businesses to accelerate their tax write-offs of new capital investments.

He is also pressing Republicans to drop their opposition to a $30 billion bill that would encourage lending to small businesses.

Democrats expect that they will be able to pass the small-business bill as soon as next week, but say they probably won't be able to tackle the infrastructure spending until next year without Republican cooperation.

© 2017 Thomson/Reuters. All rights reserved.

 
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Stimulus has become a dirty word in Washington. President Barack Obama hopes to prod the sluggish economy ahead of the November congressional elections, but he has steered clear of portraying his latest proposal as a second stimulus package along the lines of last year's...
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2010-53-13
Monday, 13 Sep 2010 11:53 AM
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