Will the Economic Recovery Package Work?

Washington Post columnist David Ignatius observes that media coverage of the economic recovery package is like reports on a baseball game or tennis match. Will the legislation prove a win for Obama or for the Republican opposition?

We, the voting public, will provide the answer. And for most of us, I think, it will depend on what we believe the legislation is supposed to do. If we expect it to turn the economy around, then we’re likely to be disappointed. This is what the Republican leadership is banking on.

If we expect the package to help avert a greater crisis, then our verdict still hangs in the balance. After all, the package is only one component of a recovery strategy that’s still evolving. In the works now are foreclosure reduction legislation, the auto industry bailout and some still unspecified actions to deal with endangered banks. All these venture into uncharted waters.

And then there’s the fact that the economic crisis isn’t ours alone. It’s also affecting numerous countries that import U.S. products. So recovery here would seem to depend on what happens there.

This much seems fairly certain: Some major spending measures in the package will cushion hardships for poor and at-risk individuals and families. And income supports for them will generate immediate spending, which should give a boost to some types of retail businesses and their suppliers.

It’s also quite certain that the package will moderate the devastating cuts that state and local governments have been planning–and, in some cases, already initiated–in services for poor individuals and families.

For example, the Center on Budget and Policy Priorities reports that at least 28 states have proposed or implemented cutbacks in public health services and/or changed eligibility requirements to reduce enrollments. Some of these measures may be averted by the Medicaid provisions in the economic recovery package.

But crucial programs for homeless and other poor people still face tough days ahead as state and local governments struggle to balance their budgets. The shortfalls are large. The needs are great.

Yet at least six Republican governors are saying they may not accept all the funding available in the economic recovery package. They cite various objections–the impact on the national debt, loss of “state sovereignty,” pressures to maintain the higher funding levels once the federal infusion runs out. Three have specifically said they will reject the funding to expand their unemployment insurance programs.

The underlying concern, of course, is that they may have to raise taxes to provide for the basic needs of their poor constituents and others at risk of poverty due to the recession.

These governors obviously need to hear from constituents who believe these needs should be served, and they need to hear ASAP. Because the economic recovery package definitely won’t work unless it’s given a fair chance.


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