Despite perception, federal stimulus may actually be working

Of course, the Gallup survey was the first in a Murderers' Row of polls released last week that showed that majorities of the public were not only dissatisfied with the stimulus but also President Obama, his handling of the health care issue and Congressional Democrats.


(And just for fun, Gallup piled on and produced a poll that said that conservatives outnumber liberals in nearly every state in the union).


But a substantial number of nonpartisan economists think the stimulus bill has made a significant impact in stopping the bleeding in the economy, even if only 10 percent-15 percent of it has actually been spent so far.


Both HIS Global Insight and Moody's Economy.com say the stimulus has saved more than 500,000 jobs (Biden and Education Secretary Arne Duncan said in Orlando that it had saved 26,000 education jobs in the sunshine state).


Chris Lafakis is an economist with Moody's.  In a telephone interview last week, he told me the roll out of the funds has been pretty much in line with expectations.


But what about the criticism that with the economy still in relatively dire straights in regards to unemployment, the stimulus was too back loaded?


"I would respond that it's a very lengthy process to award government contracts," Lafakis said.  "The government needs to be careful in doling out taxpayer dollars to winners of contracts, so they need to go through the bidding process, they then have to get the permits for construction, and only after a contract has been awarded and a permit is granted can a contractor begin on an infrastructure project."


He admits that there could have been decisions to accelerate projects, but says that historically it always takes a long time to roll out public spending (despite the spotlight on "shovel ready" projects).


The president's handling of the stimulus during the transition and his first month in office is being replayed by analysts as he now struggles with health care legislation.


Many decry how un-LBJ like he is in his dealings with Congress, preferring to outsource the sausage making to legislators like Wisconsin's David Obey (for the stimulus) or Max Baucus (for health care).


More often, the criticism is that he allowed Nancy Pelosi to load up the stimulus with pork.   True or not, the perception is devastating.  The House Speaker has now replaced Tom ("Dancing with the Stars") DeLay as the Representative America loves to hate, so having it be her work, and not Obama's, hurts the President.


Critics continue to ask how many jobs the stimulus bill has created.  But Democrats, like Vice President Biden, are emphasizing how many jobs it has saved, and how it's acted as a critical safety net for those who have suffered during year and a half-long recession.


In Orlando, Biden said the stimulus had allotted $175 billion to the states for programs like education and to keep Medicaid funded.  He said that with the states having to cut such programs to balance their budgets, it was the federal government who has come to the rescue.


And he mentioned COBRA, the program that allows unemployed people to continue their health care coverage with their former employer.  Historically, COBRA has always played better on paper than in reality, since it was extremely costly for people who no longer have regular income coming in.


But the stimulus subsidizes 65 percent of COBRA premiums for some recipients who have been laid off over the past year (but will end in the spring).


The American Recovery and Reinvestment Act, as the stimulus if officially called, will be controversial for years to come.  Perceptions that it had too much pork and "paybacks" for Democrats seems to be locked into official Washington conventional wisdom.


And it is certainly Barack Obama's sizable contribution to the escalating federal deficit, a deficit that hasn't freaked out Americans since Ross Perot's charts brought home the issue back in 1992. And a deficit that didn't concern Americans when they were applauding tax cuts for the wealthy, wars of choice, and socialized medicine - er, I mean, however you want to describe the Medicare Part D Prescription Drug bill.


But the stimulus needs to be fairly graded, since Obama critics want to use its implementation as emblematic of why they shouldn't be trusted on putting together a health care reform bill now.

By Mitch Perry

PoHo contributor

Mitch Perry is the anchor of the WMNF Evening News on 88.5 FM community radio.

Joe Biden's trip to Orlando last week barely made any ripples in state media coverage. The VP came to Florida to extol some of the virtues of the much criticized $787 billion federal stimulus package, on the six-month anniversary of the largest domestic spending bill in U.S. history.

Tracking the effects of the stimulus will continue to be the focus of economic and political analysts over the duration of its life, which will continue into 2011. But conventional wisdom has already declared it a failure now. Republicans called it that from the get-go, (which is why none in the House and only three Republican members of the Senate supported it), and then Gallup last week released a poll indicating that a majority of Americans now agree.

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