February 15, 2009 / 8:19 PM / 10 years ago

Obama's big victory comes at a cost

By Steve Holland - Analysis

WASHINGTON (Reuters) - President Barack Obama’s crucial victory in getting a $787 billion economic stimulus plan through Congress was achieved quickly, but his hopes of gaining a bipartisan consensus died an early death.

The bitter Washington debate over the stimulus plan, which the majority Democrats muscled through both chambers despite nearly unified Republican opposition, has political consequences that boil down to one question: Will it work?

If it has the desired effect of creating or saving up to 4 million jobs and kick-starting the economy, the package will be judged a smart move akin to President Bill Clinton’s economic plan that was hotly debated back in 1993. Clinton’s decision to raise taxes to balance the budget was seen as the foundation of the U.S. economic boom of the 1990s.

If it does not, opposition Republicans will be able to argue that Obama should give more consideration to their ideas, which focused on tax cuts. A lack of an economic rebound will provide fodder they’ll use against the Democrats in the 2010 mid-term elections.

“If this works and Obama, through a combination of this and other things, turns the economy around, then Republicans will pay a price,” Democratic strategist Steve Elmendorf said. “If he doesn’t turn the economy around then they’ll be able to say, ‘I told you so.’”

Obama argued that Democrats allowed plenty of time to debate the package, but that with the economy needing swift attention, it was time to move on.

“We had a spirited debate about this plan over the last few weeks,” he said on Friday. “Not everyone shared the same view of how we should move forward, and at times, our discussion was contentious. But that’s a good thing.”

Obama will sign the stimulus bill into law on Tuesday.

The stimulus victory was the achievement in what has been a stormy start for Obama, who as the package was being negotiated, had to deal with an uproar over the tax problems of several top choices for administration posts. Then his choice for commerce secretary, Republican Senator Judd Gregg of New Hampshire, abruptly withdrew from consideration — further blunting his bid for bipartisanship.


Republicans were left fuming, complaining that the stimulus package was more of a giant wish-list of unnecessary Democratic spending items instead of what they would have preferred, a slimmed-down version focusing on tax cuts and spending for roads, bridges and other infrastructure projects.

“They (Democrats) have with blunt political strength and in the guise of stimulating the economy pushed through their own political priorities, not those of the American people,” said Arizona Republican Senator John McCain.

Republican pollster Whit Ayres said Republicans were on solid ground opposing the package. “Voting for a bill that is loaded up with an enormous amount of wasteful spending is never a good idea for Republicans,” he said.

Republican strategist Scott Reed said the party’s strategy has been wise, “because it’s united the party against something that the country, according to polls, doesn’t support.

“The key next step for Republicans is to come forward with some positive alternatives to Obama’s policies,” he said.

Other experts were not so sure the Republicans were playing their cards correctly by opposing the stimulus plan, given the grim state of the economy.

Pollster John Zogby said Obama’s popularity means he has far more credibility than the Republicans.

“The thing is, he is the president and he’s still on a honeymoon and he’s talking bipartisanship. The Republicans don’t have a credible enough voice or face right now to project where they’re at,” Zogby said.

He said Republicans could face the same situation as Democrats did two years ago when Democrats opposed President George W. Bush’s surge of fresh troops into Iraq, a policy they were forced much later to admit had succeeded.

“For Republicans this may be the wrong time and the wrong issue for them to rediscover ideological purity,” he said.

How quickly the economy can be stimulated will be of utmost importance in the months ahead.

William Galston, an economist at the Brookings Institution who worked in the Clinton White House, said his best estimate was that the stimulus would create upward of 2.5 million jobs.

“Economists of all stripes, it seems to me, are in agreement that it will be a net job generator,” he said.

Editing by Philip Barbara

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