Economic Downturn Stimulates Multiple Political Responses

Posted January 25, 2008 at 1:25pm

The late Rep. Joe Moakley (D-Mass.) was fond of quoting H.L. Mencken, who observed, “There is always an easy solution to every human problem — neat, plausible, and wrong.”

[IMGCAP(1)]Moakley would dredge up the quote whenever the House Rules Committee, which he chaired, held hearings on proposals to cure the deficit by inserting procedural gimmicks into the budget process. A slight variation on Mencken might be just as useful when discussing the plethora of proposals inundating the Capitol to stimulate the economy: “There is an easy solution to reversing the economic downturn that’s timely, temporary and targeted — and it’s probably wrong.”

When the White House and a bipartisan collection of House leaders reached a tentative agreement Thursday on a $150 billion package of individual income tax rebates, business investment tax breaks and subprime mortgage borrower relief, you may have thought you were hearing the celebratory chiming of the Senate carillon. But no, it was the sound of clashing and clanging tin cups in the outstretched hands of swarms of competing interests charging up Capitol Hill, clamoring for the attention of the tight coterie of Congressional leaders who are stitching together the final details of the economic stimulus package.

“Keep it simple, stupid,” was the last thing these pleaders had in mind, since it takes a lot of rationalizing and law-changing to goose the economy in their direction. Just as a session-end omnibus spending bill is seen as the last train leaving the station transporting goodies, an early-in-the-session bill promising Dire Economic Supplemental Stimulus and Emergency Relief for Taxpayers (DESSERT) is bound to be just as tantalizing to the hungry hoards who feed on Washington.

This may help explain why the White House and Congressional leaders were so anxious to reach early agreement and rush things through as quickly as possible — the regular order be damned. Yes, the sooner the money gets back into the economy, the better. But they also knew that the longer they let the package hang out there for discussion, the more pressures would grow to add all manner of sweetmeats. I have often said that there’s one thing worse than partisan gridlock, and that’s bipartisan unanimity. That’s when I grab for my wallet.

We saw it after the Sept. 11, 2001, terrorists attacks when billions of dollars were poured into the airlines, New York, the military and who knows what else, with little thought of how the money might be most wisely spent or accounted for. We’ve seen it in the aftermath of natural disasters. The first inclination of politicians and regular citizens alike is, “Don’t just stand there, throw money at it and make it go away.”

In the case of economic recessions (and the Congressional Budget Office says we’re not there yet), we have experience to guide us. We do know these are recurring or cyclical occurrences that come and go regardless of fiscal measures taken to shorten the length or depth of those cycles.

The Congressional economic committees — Budget, Finance, Ways and Means, Banking, and Joint Economic — have all been calling witnesses for advice on what to do. But one gets the sense that Congress once again is operating on two levels (as it did in Iraq). The committees gather the experts, case studies, research data, and good and bad practices, while party leaders gather the poll numbers, focus-group responses, and campaign strategists’ advice, and then make the final decisions. (Has anyone bothered to read the recent CBO study on what results past economic stimulus efforts produced?)

That is not to diminish the essential fact that we are a representative democracy that is expected to be responsive to the wishes of the people. But Congress was supposed to provide the added dimension of refining public opinion through the medium of deliberations to arrive at the common good.

To the extent that process is short-circuited, as it regularly is nowadays, Congress is in breach of its constitutional contract with the American people to represent the best interests of the country through a deliberative law-making process. (The Senate could still slow down the House juggernaut, as it did with the 1993 and 2001 stimulus efforts.)

Blowing a bigger hole in the deficit is hardly a way to establish long-term economic stability. Can it really be in our national interest to sell more debt to the Chinese and others in the hoped-for return of some minor psychological or economic boost from giving everyone a tax rebate?

The fiscal conservatives standing against a short-term fiscal stimulus package may be viewed by some as cold-blooded, compassionless curmudgeons, but their courage and convictions are on the right side of history. Except for World War II, we’ve never spent our way out of a recession. Recessions come around every five years or so, last for six months to a year, and then give way to a recovery and more growth. They are the economy’s way of periodically adjusting to new realities and then getting on with life and growth.

But as most politicians will tell you, there’s nothing more foolish or futile than throwing yourself in front of a runaway train; you’re not going to stop it, so you may as well climb on board and enjoy the ride. The election year express is homeward-bound.

Don Wolfensberger is director of the Congress Project at the Woodrow Wilson International Center for Scholars and former staff director of the House Rules Committee.