Winning full support for the next stimulus package

I’m not a big fan of majority rule when it comes to crafting legislation. By definition, it produces winners and losers and is bitterly divisive. You might even say it works against effective governance.

In the case of the recently passed stimulus package, the losers were the Republicans, who now will sit back and hurl darts at what happens. In short, with their eyes firmly fixed on the November 2010 elections, they will work to ensure a disaster we can’t afford.

The system should give them better things to do.

This may be what President Obama had in mind as he struggled to win bi-partisan, or even better, non-partisan support for the stimulus package.

He just didn’t craft the legislation in the right way.

So here’s a modest suggestion for the next time the president takes a run at Congress for stimulus money. And, believe me, he will.

For purposes of discussion we’ll use the familiar number from the current stimulus package.

Here is a politically, ideologically and geographically equitable formula for distributing the $787 billion. Divvy the billions up by congressional district, using population and need as determinants of exact amounts.

The House of Representatives has 435 members whose districts are determined by population, hence the House is the “people’s” branch of the legislature.

We’ll get to senators in a second.

For simplicity’s sake, and leaving out the question of the districts' varying needs (unemployment, lack of health insurance, foreclosures etc), let's just divide the $787 billion pie into 435 pieces.

That works out to $1.81 billion for each congressional district.

There you are, Representative, do with the district's $1.81 billion what you will.

If Republicans want it all applied to tax cuts in their districts, as most say they do, I say, go for it.

If Democrats want to apply it to schools, health insurance, bridges, pot holes and housing, have at it.

In some cases, neighboring congressional districts with interdependent economies might cooperatively pool their money. Count on governors and mayors to have a few suggestions too.

Oregon has five congressional districts so the state would get $9.05 billion — without dealing with any adjustments for “need.” (With those factored in, we might get $10 billion, but let’s not go there.)

The over-arching theory: Who knows (or should know) the needs of local people better than an elected House member does?

Senators present a problem because they aren’t elected by proportion of the population, yet they have to approve any stimulus package. One way to deal with them would be to reserve a senatorial pot of money for them to use in their state as they see fit. How about a half billion per senator? I know, I know, it's not fair that Montana and California (each with two senators) get the same amount, but we have to do the best with what we have.

That’s $50 billion for the entire 100-member senate. Of course the number is, as always, up for negotiation. Senators being senators, they will probably push for at least half of the entire package. That’s a grossly inequitable idea on its face but let’s leave that to the politicians.

Once you get into dividing the whole amount among all federally elected officials, you will probably have to set aside a few billion for the elected president and his administration to put into federal programs.

Finally we get to the most important part.

The program would track the success (or failure) of each representative’s use of the money.

Pre-stimulus baseline statistics measuring the economy, health care, education, jobs, economic growth, environmental factors etc. would be established. Then, three months before the next election, in August 2010, figures would be released to show what changed (or didn’t change) as a result of how the money was used.

Because of the pre-election timing, the results would be politically, as well as economically, telling. Using the before-and-after comparisons, voters would decide whose approach is best and who is worthy of re-election.

Beyond that, we might find out what actually works — and adjust accordingly.

And now ... the O'Neill Effect

All politics is local, as Thomas "Tip" O'Neill once so famously put it. Get ready, because the "locals" are speaking out, and the Senate version of the stimulus package is about to wither under the local blistering blast over Senate cuts in state and local spending.

The heavy hand of Republicans — "moderate" and few though they be — is on this Senate bill. More than a third of the $838 billion comes in the form of tax cuts.

And just how might you be planning to spend your tax cut? Stimulating the economy? Planning to build any needed schools? Providing the poor with health care are you?

Right.

Don't assume that state and local government officials are the only ones turning out in force to make sure billions for non-federal projects are restored to the final package.

Here in little Hillsdale parents are lobbying for money for new and upgraded schools. The money isn't in the Senate version. Constituencies for alternative energy and state infrastructure construction are making similar noises.

In this community, we voted by a 5 to 1 ratio for Obama. More than a few of us are perplexed by the president's new moderate Republican alliances — and their consequences. What price window-dressing?

I say if the Senate Republicans want to filibuster, let them. And let them pay the political price.

It's called the "O'Neill effect."

It's also called "hardball."

Putting your $2,730 to work

You’ve probably done the math.

$819,000,000,000 / 300,000,000

No?

The nominator (the first number) is the amount of the Obama-backed stimulus package that passed the House with nary a Republican "yes" vote. A version of it is now before the Senate.

The second number, the denominator, is roughly the nation’s population.

And, unless I’ve lost a zero along the way, the result of the division is $2,730 for each man, woman and child in the country.

I don’t know about you, but it is an exceedingly small fraction of what our family lost in the stock market last year. For many more, it is a very small part of their personal debt — consumer debt and other debt.

Sure, the government could give that $2,730 back to us in tax cuts. That's what the Republicans want.

What would you do with it? I’d tuck it away in a very, very safe place. Like between the mattress and the box springs.

I could invest it in the stock market along with the money of others. There the Wall Street financial managers would rake off millions in bonuses even as they reduce our money to junk status.

Some might use part of the Republican tax cut to buy Chinese-made flat screen TVs or Japanese-made computer consoles. Some might pay down a portion of credit card debt, or part of school loans. Or the car insurance or the health insurance or the back rent. I doubt many would give it to charity, but we can hope.

No, the $2,730 tax cut would do little to stimulate the economy or to create jobs, at least not in this country. But it would continue to grow the government’s debt. (What was it that Republicans once stood for? Fiscal restraint?)

We need to spend the $819 billion so that it multiplies in our economy. It’s called social investment. Think education, health, research, bridges, railroads, clean energy, peaceful diplomacy.

Not bad for $2,730.

It's whole lot better than tucking a tax cut under the mattress or buying a flat screen TV.