GOP has good case against $825B stimulus plan but lacks cred

WASHINGTON, Jan. 28 (UPI) -- Wednesday is decision day for President Barack Obama's emergency $825 billion -- and counting -- stimulus package to rescue the recession-plagued American economy he inherited from President George W. Bush.

The House of Representatives is scheduled to vote on Obama's program Wednesday, and on Tuesday the new president took the highly unusual step of coming up to Capitol Hill himself to pitch the package to lawmakers and particularly to Republicans.

However, the president found little support for his proposals among foes he and his party defeated so decisively in the Nov. 4 presidential election. His ringing call for a new era of constructive post-partisanship cooperation in American public life in his inaugural address only a week ago appears to have fallen on deaf ears.

House Republicans have told reporters they appreciate the new president listening to them, but they claim they are not feeling any love or receiving any bipartisan olive branches from the majority Democrats, who control both the House and the Senate in this 111th Congress. But then, during the 12 years from 1994 to 2006 that the GOP controlled the House, it was notorious for squeezing out the Democrats on everything.

Many Republicans have serious and substantive arguments for rejecting the package. They are entirely correct that the federal government will incur far too much additional debt from the new Obama program and that future generations will be saddled with it, and that there are far too many unnecessary pork barrel and pet Democratic programs in the new package.

But then, if Bush and the three Republican-controlled Congresses that served with him had not spent money like drunken sailors, transforming the $150 billion-a-year federal budget surplus into a half-trillion-dollar budget deficit, Obama and the Democrats would not be confronting this crisis now.

More generally, while everyone in Congress agrees that something significant needs to be done to tackle the growing economic crisis, no one is sure what will work.

The proposed stimulus combines buying up toxic assets; guarantees against losses backed by mortgages and loans; and injecting cash into troubled companies in return for equity. That is nationalization by any other name, but it is still far less radically socialist than the bailout schemes pushed through by Bush and his last treasury secretary, Henry "Hank" Paulson, last fall.

Obama has urged the need to "put politics aside and do the American people's business." It appears that he will get his package -- minus the spending on contraception and family-planning services that some Democrats wanted to put in -- but without the bipartisanship that he hoped for.

Meanwhile the economic problems continue to roll through the U.S. economy. California has been especially hard hit and last year saw 236,000 homes foreclosed, more than in the previous nine years combined, according to the Los Angeles Times.

Some 404,000 Californians defaulted on their payments -- a record -- and it appears the mortgage crisis has shifted from people who had taken bigger mortgages than they could pay to now include people who cannot keep up because they lost their jobs.

Obama's $825 billion bailout package is still a smaller sum than the 110th Congress approved for the banks bailout last fall. Paulson had asked for $700 billion, but the final package came to around $850 billion when the pork barrel that many members demanded as the price for their support was added, and in that case, the great majority of the unnecessary -- and often farcical -- extra programs came at the insistence of Republican members of the House.

In fact, several of Obama's top economic advisers appear far more responsible and realistic about the need to maintain the fiscal credibility of the U.S. government than any of Bush's appointees. And Sen. John McCain of Arizona, the GOP presidential nominee last year, and his top economic adviser, former Sen. Phil Gramm, R-Texas, never expressed any credible or serious concern on the issue at all.

By contrast, Obama's top economic advisers include Paul Volcker, the legendary Federal Reserve chairman who broke the back of the 1970s inflationary spiral, and President Bill Clinton's treasury secretary, Larry Summers. Summers, with his usual penchant for plain speaking, has already warned that Bush's tax cuts cannot be renewed next year.

There is a genuinely strong case to be made against the Obama $825 billion stimulus package. The problem for the Republicans in Congress is that they have a record, even up to the end of last year, of spending irresponsibly on more and worse programs whenever they got the chance. Fiscal responsibility needs new and better champions on Capitol Hill.