Posts Tagged ‘Stimulus Bill’

The Supreme Court Holds Up the Chrysler Sale

Tuesday, June 9th, 2009

I actually decided to write a short piece stating my hope that the Supreme Court would look into Obama’s and Bush’s expansion of executive powers in tackling the financial crisis before the Supreme Court delayed the sale of Chrysler to Fiat. Now that they have, I’m relieved if a bit nervous. The key issue is the use of executive power in a crisis – as Michael J. de la Merced explained the issue:

In a broader context, such a decision would also give the justices an early opportunity to consider the scope of the wide-ranging but not unlimited authority that Congress granted the president to address the economic crisis.

I think this is a good thing – though I’m not sure how the timing of this will affect things. Generally, the strongest decisions restricting the executive’s freedom in a crisis have come after the crisis has past. With the rash of bad news on the economic front – even as most indicators seem to be levelling off – this financial crisis is not yet over. On the one hand, strong action by the Court at this time to curb the power of the president could destabilize the economy, as it is confidence in the power and determination of the executive branch and the Federal Reserve to backstop the financial system that seem to have restored confidence in the market and economy itself. At the same time, the Supreme Court is less likely to challenge the president’s authority in the middle of a crisis – making it more likely the decision will be deferential.

It is possible that all of these competing claims could be dealt with responsibly – with a Solomonic decision along the lines of Marbury v. Madison. It’s also possible that the Court may find Presidents Bush and Obama both acted constitutionally in their response. But as a matter of policy, the recent government interventions into the market are ill-advised if they extend beyond the minimum amount of time. As I wrote regarding Obama and the Rule of Law:

The power of the executive branch has grown enormously in the financial crisis – between the Stimulus Bill and the bank bailout. While in the short-term this may be necessary, if steps are not taken, this would undermine the balance of power between the federal government and the states. While this in itself is not a violation of the Rule of Law – it does weaken the system which together helps maintain the Rule of Law.

The one issue that strikes me as worth considering – on matters of constitutionality rather than policy – is whether or not Bush and then Obama acted within their powers in providing loans to Chrysler and General Motors; perhaps a Court should also look at the broad authority given by the TARP bill itself and set some standards regarding what authorities and monies can and cannot be extended to the executive branch by the legislative.

The whole process of drafting and passing the TARP bill was obviously flawed – though it’s difficult to judge legislation passed in the midst of a crisis. The only logical way out of this I’ve heard mentioned would be to “stockpile laws” as Philip Bobbitt once suggested with regards to terrorism.

But even as there is a flawed process, it’s not clear what if anything was unconstitutional.

At the same time, I’m glad to see the Court looking seriously at getting involved. I’m all for these checks and balances.

The Back of Obama’s Hand

Tuesday, February 3rd, 2009

Obama has clearly been trying to stay above the fray in this debate over the stimulus bill. He set guidelines as to what he wanted in the bill and let Congress fight over the specifics. He wanted a bill:

  • in which 75% of the spending would occur within two years; 
  • that would focus on long-term projects such as infrastructure, health care, and educational improvements and on short-term stability measures dealing with unemployment; 
  • that would have little to no “pork”; 
  • that would include significant tax cuts; and 
  • that would be ready to pass as soon as possible – by last week.

But as E. J. Dionne of the Washington Post explained:

The president has been willing to give House and Senate Democrats substantial leeway in crafting their proposals because he knows that both will end up being broadly to his liking. He can influence the final outcome when the two houses work out their differences next month.

The administration did intervene, however, to chip away at a few small but politically troublesome expenditures…

Dionne is referring to the items the Republicans voiced displeasure over (with press releases and coordinated apperances on cable news shows). Obama pressed the Democrats in Congress to remove the items (including state funding for contraception and STD prevention and a museum of the mob in Las Vegas). The Republicans wanted tax cuts – and Obama obliged with over 35% of the cost of the stimulus going to tax cuts. A number of other Republican proposals have been incorporated into the bill from Chuck Grassley’s Alternative Minimum Tax fix to Arlen Specter’s additional funding for the National Institute of Health to Eric Cantor’s proposal to place the bill on the internet. 

The Republicans who have been criticizing the bill have praised the popular President Obama’s outreach and tried to place the blame on the unpopular House Democrats. The talking point is that Obama is too timid to stand up to the House Democrats who are foisting this awful bill upon us. This seems to me to be a misleading interpretation of the above events designed to undercut Obama politically. From what I can see and from what I read – the Democrats, and especially Obama, are making a good faith effort to make sure this bill has bipartisan support. They are incorporating Republican suggestions and principles; they are involving them in some, though not all discussions of the bill. Even if there is truth to the complaints of House Republicans that they are being frozen out of the House’s deliberations, their input is clearly being taken into account by Obama who has presssed the House Democrats to make changes suggested by the House Republicans. The Senate bill seems to be even more reflective of Republican concerns, with 78% of it’s spending projected to be done by 2010.

Which is why the unanimous opposition of the House Republicans is disappointing. It is best explained, it seems, by politics, as the AFP described the dynamic at work:

[I]f Obama’s stimulus works and revives the reeling economy, they would be unlikely to get any credit even if they voted for it – by opposing the measure they can at least expect some political gain if it fails.

But the battle of whether the Republicans are being true to their ideals or merely obstructionist hasn’t yet been resolved. The Republicans have been dominating the media coverage while the Democrats have hung back. They have been expressing their criticism of the stimulus plan in partisan terms – bringing up culture war issues related to sexual morality, calling the bill a mere sop to Democratic interest groups, and failing to acknowledge the significant concessions that have been made. Rush Limbaugh – as part of his continuing quest to hijack the Republican Party – wrote an op-ed for the Wall Street Journal full of his usual misinformation: exaggerating the cost of the bill; downplaying the tax cuts within the bill (when his real objection is to who these tax cuts are going to); and most of all claiming that it was an example of Democratic policies being forced down the throat of an America who wants a bipartisan approach – like the one Rush Limbaugh is offering.

There are major changes that should be made to this bill – the most pragmatic and popular one being to eliminate the portions of the bill extending past 2010 and keeping those provisions for other legislation. But by necessity, out of a need for quick action, this bill will be far from perfect – utilizing existing programs rather than creating more appropriate and effective ones. Obama should ensure that the Senate Democrats make this change to the bill, which is already an improvement over the House bill in that 78% of it’s monies will be disbursed within two years.

But regardless of whether this bill is the right bill or not, Obama will soon face a choice. The Republicans seem to be interpreting Obama’s civility and openness to dialogue as weakness. They do not seem to realize where they are headed. Voting against tax cuts. Voting against a stimulus measure. Obstructing the government from acting in the midst of a crisis. Obama will likely continue to reach out for the rest of this week, making obsequious efforts to woo Senate Republicans to his side. Given the dynamics that are dominating in Washington, I find it difficult to believe they will give in, although some might. (The question would become, did Obama get enough Republicans.) As described above, most Republicans have far more to gain by being obstructionist – especially if they are misinterpreting Obama’s attempts at biparisanship as weakness – and think there will be no consequences.

My bet – and my advice if it were needed – would be for Obama to make a final private plea for Republican support later this week. Then, if it fails, to schedule a speech this coming weekend in one of his more vulnerable opponents’ states. He should make clear that this bill is not perfect – but that decisive action in the midst of this crisis is important. He should make clear that bipartisanship is not unilateral disarmament. He can only work with those who will unclench their partisan fists and are willing to get down to the work of governing. He should make it clear that this bill is not our only response to the crisis – that we will likely need to do more – to reform the banking and mortgage industries; to continue to create liquidity in the credit markets. He should make clear that this stimulus bill is only one part of his overall plan. Shortly after this speech, he should sent out an email to his supporters asking them to write their Congressmen and Senators and ask the Obama movement to prove it’s continued political worth.

In short, he should give a brief demonstration of the consequences of crossing Obama – he must show his opponents the back of his hand. It may not be civil – but politics cannot be civil without respect. Perhaps it is time for Obama to demonstrate his ability to change the debate in Washington – and in the country.