Friday, February 13, 2009


What A Difference A President Makes... Republicans Flip Flop On Deficits Faster Than David Vitter On Family Values.

When Ronald Reagan started his "trickle-down" economics, it lead to some of the largest budget deficits in U.S. History. Republicans LOVE Ronald Reagan. It was up to George H.W. Bush to pass tax increases which lead to the Clinton Era of Balanced Budgets.

After the Clinton Era, George W. Bush inherited a budget surplus which the Republican Controlled Congress Quickly Turned Into The Largest Budget Deficits In U.S. History. Republicans Loved It. They passed huge tax cuts for the rich, which lead to even larger budget deficits. But nobody called it "Generational Theft."

Now that the Democratic Controlled Congress has passed a Stimulus Bill for the Ailing U.S. Economy, Republicans are calling it.... "Generational Theft."

It would be hilarious if it wasn't so fucking pathetic. Republican leaders are so starved for ideas that they're taking their cues from Michelle "I wish I was in an internment camp" Malkin and Rush "Hillbilly Heroin" Limbaugh.

GOP Leaders Taking Cues From Malkin On Stimulus, Call It ‘Generational Theft’

In early January, when President Obama first proposed his American Recovery and Reinvestment Plan, conservative columnist Michelle Malkin balked at the proposal’s name, writing that it should be called “The Generational Theft Act of 2009.” Malkin has been pushing her attempted re-branding ever since, repeating it over and over and over again.

Malkin’s views are apparently beginning to hold sway with Republicans in Congress. On January 29, Sen. Tom Coburn (R-OK) said of the proposed stimulus package, “This bill is a generational theft bill.” In a blog post yesterday for, a new conservative 501(c)4 group, House Minority Leader John Boehner (R-OH) used Malkin’s language as well:

The hundreds of billions of dollars Washington is borrowing to finance this pork-barrel monstrosity will come from our children and grandchildren. This is not “stimulus” – it’s generational theft.

Sen. John McCain (R-AZ), who has become a top critic of the recovery package in the Senate, also referred to it as “generational theft” on CBS’ Face The Nation yesterday. Watch it:

Malkin isn’t the only far right conservative pundit influencing the GOP these days. As ThinkProgress noted yesterday, congressional Republicans are embracing right-wing talker Rush Limbaugh as their “unofficial leader.” Some Republicans, like Sen. Chuck Grassley (R-IA), are following Limbaugh’s lead by referring to the stimulus as the “porkulus” bill.


Thursday, February 12, 2009


Dianne Feinstein and Henry Waxman Try To "Backdoor" Internet Censorship Into Stimulus Package. Pathetic.

US lawmaker injects ISP throttle into Obama rescue package
11th February 2009 00:43 GMT

US Senator Dianne Feinstein hopes to update President Barack Obama's $838bn economic stimulus package so that American ISPs can deter child pornography, copyright infringement, and other unlawful activity by way of "reasonable network management."

Clearly, a lobbyist whispering in Feinstein's ear has taken Comcast's now famous euphemism even further into the realm of nonsense.

According to Public Knowledge, Feinstein's network management amendment did not find a home in the stimulus bill that landed on the Senate floor. But lobbyists speaking with the Washington DC-based internet watchdog said that California's senior Senator is now hoping to insert this language via conference committee - a House-Senate pow-wow were bill disputes are resolved.

"This is the most backdoor of all the backdoor ways of doing things," Public Knowledge's Art Brodsky told The Reg. "Conference committees are notorious for being the most opaque of all legislative processes."

Obama's stimulus bill sets aside between $6bn and $9bn for expanding American broadband into rural areas, and Senator Feinstein hopes to (PDF) augment this Broadband Technology Opportunities Program so that it "allows for reasonable network management practices such as deterring unlawful activity, including child pornography and copyright infringement."

On one level, Obama's bill is an effort to boost the American economy. On another, it's an opportunity for lobbyists to make a mockery American government.

According to Public Knowledge, the Motion Picture Association of America is behind Feinstein's language. The MPAA doesn't like copyright infringement. And you can bet the child pornography bit was tossed in for added effect.

But the "network management" bit sounds like ISP speak.

As Art Brodsky and his colleagues pointed out, network management is used to manage networks - not filter content. Content filters are used to filter content. But American ISPs - particularly cable ISPs - will take any excuse they can find to throttle certain traffic.

And if they're using copyright infringement and child porn as excuses, they'll have to start sniffing packets. So, Feinstein's amendment would also destroy net privacy - if there's any out there.

Word from Public Knowledge is that Congressman Henry Waxman will back Feinstein's amendment when it turns up in conference committee. Representing a district near Hollywood, Waxman has long backed the MPAA and the Recording Ass. of America in their efforts to crack down on P2P file sharing.

Wednesday, February 11, 2009


Mitch McConnell and Kentucky's Republican Congressmen All Oppose The Stimulus Bill. Here's the reality of economic contraction in Kentucky.


The American War On Drugs... Just Like High Oil Prices Bad People Make High Profits and Do Bad Things.

Obama Must End The War On Drugs -- Or Mexico and Afghanistan Will Collapse

by Johann Hari

With the global economy collapsing all around us, the last issue President Barack Obama wants to talk about is the ongoing War on Drugs. But if he doesn't -- and fast -- he may well have two collapsed and hemorrhaging countries on his hands. The first lies in the distant mountains of Afghanistan. The second is right next door, on the other side of the Rio Grande.

Here's a starter-for-ten about where this war has led us. Where in the world are you most likely to be beheaded? Where are the severed craniums of police officers being found week after week in the streets, pinned to bloody notes that tell their colleagues: "This is so that you learn respect"? Where are hand grenades being tossed into crowds to intimidate the public into shutting up? Which country was just named by the US Joint Chiefs of Staff as the most likely after Pakistan to suffer a "rapid and sudden collapse"?

Most of us would guess Iraq. The answer is Mexico. The death toll in Tijuana today is higher than in Baghdad. The story of how this came to happen is the story of this war -- and why it will have to end, soon.

When you criminalize a drug for which there is a large market, it doesn't disappear. The trade is simply transferred from pharmacists and doctors to armed criminal gangs. In order to protect their patch and their supply routes, these gangs tool up -- and kill anyone who gets in their way. You can see this any day on the streets of London or Los Angeles, where teenage gangs stab or shoot each other for control of the 3,000 percent profit margins on offer. Now imagine this process on a countrywide scale, and you have Mexico and Afghanistan today.

Drugs syndicates control eight percent of global GDP -- which means they have greater resources than many national armies. They own helicopters and submarines and they can afford to spread the woodworm of corruption through poor countries, right to the top.

Why Mexico? Why now? In the past decade, the U.S. has spent a fortune spraying carcinogenic chemicals over Colombia's coca-growing areas, so the drug trade has simply shifted to Mexico. It's known as the "balloon effect": press down in one place, and the air rushes to another. When I was last there in 2006, I saw the drug violence taking off and warned that the murder rate was going to skyrocket- - but I didn't imagine it would reach this scale. In 2007, more than 2,000 people were killed. In 2008, it was more than 5,400 people. The victims range from a pregnant woman washing her car to a four year-old child to a family in the "wrong" house watching television. Today, 70 percent of Mexicans say they are frightened to go out because of the cartels.

The cartels offer Mexican police and politicians a choice: plato o ploma. Silver or lead. Take a bribe, or take a bullet. The Interior Secretary, Juan Camilo Mourino, admits that the cartels have so corrupted the police they can't guarantee the safety of informers or the general public any more. The former U.S. drug agency director Barry McCaffrey says Mexico is "not confronting dangerous criminality -- it is fighting for its survival against narco-terrorists." Within five years, he said, it will be a narco-state controlled by the cartels.

So the U.S. is trying to militarize the attack on the cartels in Mexico, offering tanks, helicopters and hard cash.

The same process has occurred in Afghanistan. After the toppling of the Taliban, the country's bitterly poor farmers turned to the only cash crop that earns them enough to keep their kids alive: opium. It now makes up 50 percent of the country's GDP. The drug cartels have a far bigger budget than the elected government, so they have left the young democracy, police force and army riddled with corruption and virtually useless.

The U.S. reacted by declaring "war on opium." The German magazine Der Spiegel revealed that the NATO Commander has ordered his troops to "kill all opium dealers." Seeing their main crop destroyed and their families killed, many have turned back to the Taliban in rage. The drug war has brought the Taliban back to life.

What is the alternative? Terry Nelson was one of the America's leading federal agents tackling drug cartels for over thirty years. He discovered the hard way that the current tactics are useless. "Busting top traffickers doesn't work, since others just do battle to replace them," he explains. A crackdown simply produces more violence, as an endless pool of young men hungry for the profits step into the vacuum and fight off their rivals. Nelson concluded there is an alternative: "Legalizing and regulating drugs will stop drug market crime and violence by putting major cartels and gangs out of business. It's the one surefire way to bankrupt them, but when will our leaders talk about it?"

Of course, the day after legalization, a majority of gangsters will not suddenly open organic food shops and join the Hare Krishnas. But their profit margins will collapse as their customers go to off-licenses and chemists rather than to them. The incentives for going into crime and staying there will be decimated. Norm Stamper, the former head of the Seattle Police Department, says plainly: "Regulated legalization of all drugs will drive drug dealers out of business: no product, no profit, no incentive."

We don't have to speculate about these effects; we can look at the last time prohibition ended. When alcohol was criminalized in the US, the murder rate soared. The year it was legalized, the number of murders fell off a cliff -- and continued to drop for the next ten years. (Rates of alcoholism remained the same; deaths from alcohol poisoning declined dramatically as beer replaced moonshine.) Just as Al Capone was bankrupted by legalizing alcohol, we now have a chance to bankrupt the Mexican cartels, the Taliban, the Bloods and the Crips, and the gangs that are shooting their way across world -- before they cause the collapse of two countries.

Mexicans and Afghans are the first to demand this solution. In 2006, the last Mexican President proposed legalization, and the country's Congress voted for it -- but the Bush administration went crazy. They applied so much pressure that, at the last minute, the president vetoed his own proposal. Today, comfortably out of office, he says that "someday" the U.S. will see that "this is the only way." Meanwhile, the Bush administration admitted to drawing up plans for a "surge" of troops to the border if Mexico collapses, to prevent a vast inflow of refugees.

No, Obama doesn't want to spend his political capital on this. He is the third consecutive U.S. President to have used recreational drugs in his youth, but he knows this is a difficult issue, where he could be tarred by his opponents as "soft on crime." It's true that where drugs are decriminalized, like the Netherlands, levels of addiction are much lower than in the U.S. It's true that when several U.S. states decriminalized marijuana in the seventies, there was no increase in use. But would this message get across?

Yet remember: opinions are febrile in a Depression. At the birth of the last great downturn, support for alcohol prohibition was high; within five years, it was gone. The Harvard economist Professor Jeffrey Miron has calculated that drug prohibition costs the U.S. government $44.1bn per year in wasted cash -- and legalization would raise another $32.7bn on top of that in taxes if drugs were subject to the same rates as cigarettes and alcohol. (All this money would, in a sane world, be shifted to drug treatment.) Can the U.S. afford to force its failing policy on the world -- especially when it guarantees the collapse of the country it is occupying and its own neighbour?

Legalization would also be the single biggest blow for civil rights in the U.S. since Lyndon Johnson. Today, 13 percent of American drug users are black, yet they make up 74 percent of the drug offenders in prison. A whole generation of black men has been destroyed by prohibition: Barack Obama could easily have become one of them if the police had walked into the wrong party at the wrong time.

Senator Jim Webb has pointed out what would have happened to the young Obama: "Even as I write these words, it is virtually certain that somewhere on the streets of Washington D.C. an eighteen year-old white kid from the Maryland or North Virginia suburbs is buying a stash of drugs from an eighteen year-old black kid. The white kid is going to take that stash back to the suburbs and make some quick money by selling it to other kids." He will grow up and grow out of it, and one day -- as a wealthy professional -- he will "look back on his drug use just as recreational and joke about it ... just one more little rebellion on the way to adulthood."

But the black kid "will enter a hell from which he may never recover." He is likely to be arrested, and to go to prison. "Prison life will change the black kid, harden him, mess up his mind, and redefine his self-image. And after he is released from prison, the black kid will be dragging an invisible ball and chain behind him for the rest of his life... By the time the white kid reaches fifty years of age, he may well be a judge. By the time the black kid reaches fifty, he will likely be permanently unemployable, will be ineligible for many government assistance programs, and will not even be able to vote." Obama wouldn't be President. He wouldn't even be able to vote.

Drug addiction is a always tragedy for the addict and his family -- but drug prohibition spreads the tragedy across the globe. The gangs will only grow from here -- and take whole cities and countries down with them. We still have a chance to take them back into the legal regulated economy, before it's too late for Mexico and Afghanistan and graveyards full of more shot kids on the streets of America. Obama -- and the rest of us -- has to choose: controlled regulation, or violent prohibition? Healthcare, or warfare?

As it stands, the President seems -- by default, and by distraction -- willing to keep singing that old ditty written by the columnist Franklin Adams in 1931, in the dry days of the last futile prohibition. He hummed: "Prohibition is an awful flop./ We like it./ It can't stop what it's meant to stop./ We like it./ It left a trail of graft and slime,/ It don't prohibit worth a dime,/ It's filled our land with vice and crime,/ Nevertheless, we're for it."

Johann Hari is a writer for the Independent. To read more of his articles, click here or here.

To join the fight to legalize drugs, good organizations to join are Transform or Stop the Drug War.


Dear Republicans: Going Green means people like Hugo Chavez and the Saudi Kings have less money. Doesn't that help us in the long run?

Hugo Chavez regional influence built on oil largesse
Hugo Chavez regional influence built on oil largesse Photo: AFP/GETTY

The firebrand populist has used the proceeds of Venezuela's vast oil reserves to prop up left-wing governments and politicians across the region, fomenting anti-Americanism and expanding his personal influence.

Fidel Castro in Cuba, Bolivian leader Evo Morales and Daniel Ortega, the Sandinista revolutionary who returned to power in Nicaragua in 2006, have all benefited from Mr Chavez's oil-fuelled largesse.

But after 10 years in power, Mr Chavez is now fighting an increasingly desperate campaign to win Sunday's referendum on changing the constitution to scrap term limits. His proposal would allow him to stay in office indefinitely if he keeps winning elections run after his current final term expires in 2013.

He has been forced to remove a reported $12 billion (£8 billion) from Venezuela's central bank's foreign currency reserves - one third of its total - to stave off deep spending cuts necessitated by falling oil revenues until after the vote.

The plunge in oil prices is endangering his ability to maintain the free food and health care programmes that secure the support of his power base, the millions of Venezuelans mired in poverty despite the oil bonanza.

Although Mr Chavez controls the levers of political power, opinion polls point to a tight result on Sunday - even before an expected $30 billion gap in the government budget for this year kicks in.

Anti-government protests have intensified despite Molotov cocktail and tear gas attacks by pro-Chavez activists on the offices of opposition political and media figures and harassment of student leaders spearheading the "no" campaign. The Vatican's diplomatic mission was also attacked, in apparent retaliation for granting asylum to a student leader wanted by the government.

"Crunch time is arriving very quickly for Chavez," said Diego Arria, a former Venezuelan ambassador to the United Nations and now a prominent opposition figure. "The treasury is a black hole and he's using the state oil company as his piggy bank to fund his political ambitions. But he cannot keep on like this and he knows it."

Gustavo Coronel, a former board member of the state oil business PdVSA and now a US-based consultant on the region, has produced a devastating analysis of the state of the country's economy.

"Venezuela and Venezuelans are facing a deep economic and social crisis after Feb 15," said Mr Coronel. "The budget is fiction. The economy will contract, inflation will increase, devaluation is inevitable, food shortages will kick in as most foodstuffs are imported and Chavez will be forced to cut back on his handouts to his friends. Make no mistake, this is going to be a very tough year."

Soaring inflation, worsening food shortages and surging crime rates are all undermining Mr Chavez's popularity. Even the heavily-politicised PdVSA, which has been funding his social programmes, has been forced to lay off workers as it struggles with debts of $8 billion.

Independent economic analysts believe that Chavez has called the referendum now because Venezuela's economy is slowing rapidly. Growth fell from 8.5 percent in 2007 to 4.9 percent in 2008 and analysts are forecasting negative growth in 2009 and overall inflation of 45 percent.

Mr Chavez was dealt another major blow last month when the favourite hate figure for his tub-thumbing speeches, US president George W Bush, was replaced by Barack Obama.

The economic crisis is threatening his goal of replacing ailing former Cuban dictator Fidel Castro as America's leading opponent in its Latin American backyard.

He has long sent money, subsidised oil and military aid to his allies in the region, using his largesse to help them win power and fund their regimes. Now he will have to rein in many of those handouts.

Most recently, he has been channelling low-cost oil to an alliance of left-wing mayors in El Salvador in the run-up to next month's presidential election, allowing them to provide cheap fuel to win support or sell it a profit to finance political campaigning. A similar strategy of oil subsidies to Sandanista mayors in Nicaragua paved the way for President Ortega's victory.

The most significant foreign beneficiary is Cuba, which receives 90,000 barrels a day of Venezuelan oil. The impoverished communist state pays "in kind" by sending doctors, military personnel, bodyguards and sports trainers to serve the Chavez regime.

He dispatches another 200,000 barrels a day to other Latin American and Caribbean states at heavily discounted rates or in return for shipments of bananas and black beans. His charity is not limited to oil. A recent trial in Miami threw a spotlight on how Venezuelan agents carrying suitcases packed with dollar bills flew in to Argentina. And his Bolivian protégé, Evo Morales, has received military helicopters and pilots.

Nor has Mr Chavez restricted his handouts to his Hispanic neighbours. He has supplied $400 million worth of home heating oil to low-income residents in eight states in the US, given nearly $20 million to Left-wing US actor Danny Glover to make supportive films, and even sent subsidised fuel for London buses during Ken Livingstone's tenure as mayor.

This year's official budget is based on Venezuela producing 3.6 million barrels of oil per day and selling them at a price of $60 a barrel. But international industry figures suggest the country is only producing 2.5 million barrels a day, selling half of it at the market rate of $32 a barrel and the rest at heavy discounts.

Now facing domestic economic woes, his priority will be to maintain the social welfare programmes with which he keeps the support of impoverished slum-dwellers who have seen little other benefit from the country's oil riches.

Mr Chavez, a charismatic but bullying former paratrooper, was stunned when he narrowly lost a previous referendum in December 2007 to abolish presidential term limits, a tactic widely viewed as a naked power-grab.

He is asking Venezuelans to vote again, although this time he is calling for term limits for all legislators, governors and mayors to be abolished too, apparently hoping that these other political leaders will now also campaign vigorously for a "yes" vote.

Mr Chavez has frequently made clear that he believes he lost the referendum 14 months ago because his campaign was complacent and failed to mobilise his supporters. Those assertions have fuelled opposition fears that he will rely on electoral fraud, intimidation and ballot-box stuffing to ensure victory this time.

Tuesday, February 10, 2009


Delusional Republicans Still Think Tax Cuts and Deregulation Will "Fix" The Economy. I'd say they had 8 years and we've seen the results.

Monday, February 09, 2009


Meet The New Boss... Same As The Old Boss... President Obama Acting Just Like President Bush.


Economic Forecast: BRUTAL (Republicans Giddy because Philosophically This Means Less Government)

February 7th, 2009 1:10 pm
598,000 Jobs Shed In Brutal January

Unemployment Hits 7.6% as Downturn Picks Up Steam

By Neil Irwin and Annys Shin / Washington Post

Conditions for the nation's workers deteriorated last month at an unrelenting pace, new data showed yesterday, adding urgency to the Obama administration's calls for aggressive action to curb job losses and bolster the economy.

The White House has been working on parallel tracks to arrest the economic free fall. While building support for a massive stimulus package, which cleared a crucial hurdle in the Senate last night, the administration has also been cobbling together a rescue plan for the financial system, which the Treasury Department is scheduled to unveil Monday.

Both efforts are designed to improve the nation's employment outlook, by directly creating jobs in the case of stimulus and, in the case of the financial rescue, by steadying the banks that would ordinarily lend to employers seeking to expand.

The need for progress on those fronts seemed more important than ever yesterday, as the Labor Department announced that conditions worsened more than expected last month. The nation's employers shed 598,000 jobs, the most since 1974, driving the unemployment rate to 7.6 percent from 7.2 percent. If the jobless rate keeps rising at the pace it has for the past two months, it will hit double digits in summer and reach its highest rate since the Great Depression by the fall.

Despite the grim data, the Dow Jones industrial average climbed 2.7 percent, or 217.52 points, on anticipation that the Senate would pass the economic stimulus package.

Since the recession began in December 2007, the nation has lost more jobs as a percentage of the labor force than it had at a comparable point in the early 1980s downturn, the worst recession of the post-World War II era. The number of unemployed Americans over the past year has risen by about 4.1 million, equivalent to the entire labor force of Virginia.

"It is almost set in stone now that this will be the worst job market we've seen in the postwar period," said Scott Anderson, a senior economist at Wells Fargo.

Companies in nearly every sector of the economy have cut jobs or announced that they would take other steps to save on costs, including freezing or reducing pay or eliminating contributions to employee retirement programs. Yesterday, Emerson Electric, a global manufacturing and technology company based in St. Louis, became the latest firm to disclose cutbacks, saying it would slash up to 14,000 jobs this year because of lower demand.

President Obama seized on yesterday's dismal news, as he has with other bleak data lately, to press for passage of the economic stimulus package.

"This is not some abstract debate," Obama said at the White House. "It is an urgent and growing crisis that can only be fully understood through the unseen stories that lie underneath each and every one of those 600,000 jobs that were lost this month."

The financial rescue package that Treasury Secretary Timothy F. Geithner plans to lay out next week would aim to save or create jobs by propping up banks and other troubled financial institutions, which in turn should make them able to lend money to businesses that seek to expand or consumers who wish to make purchases. The stimulus package, a mix of tax cuts and new spending, seeks to save or create jobs directly by encouraging retail sales and business investment.

Many of those jobs would probably be concentrated in the manufacturing industry. According to an estimate by economist Mark Zandi of Moody's, who has been advising congressional Democrats, an earlier version of the stimulus similar to the package that passed the House of Representatives last month would generate 590,000 manufacturing jobs by the end of 2012. Last month alone, the nation lost 207,000 manufacturing jobs, the largest one-month decline since 1982. Most of those losses were concentrated in companies that make vehicles or related parts and machinery.

William Gaskin, president of the Precision Metalforming Association, a trade organization based in Independence, Ohio, that represents medium-size suppliers to manufacturers across a wide range of industries, said more than half of the group's 1,200 members have cut back their workers' hours or laid people off. Some have cut their workforce by close to half.

"In order to conserve cash, they're having to reduce hours," Gaskin said. "They are trying to work shorter hours to keep people for the rebound, but there comes a time when you've got to release people."

The construction industry, which has been losing jobs since the housing slump began in late 2005 and shed 111,000 jobs in January, would also probably benefit from the stimulus package. Based on the earlier House version of the bill, Moody's estimated that 803,000 construction jobs could be created by the end of 2012.

That would be welcome relief for an industry that has suffered with the slowdown in the building of schools, office towers, apartment buildings and shopping malls.

"Construction was slammed especially hard by the freezing of credit markets in mid-September," said Ken Simonson, chief economist for the Associated General Contractors of America in Arlington. "Developers weren't able to get funding. School districts that had planned to issue tax-exempt bonds [to finance building] discovered there was no market."

Retailers, still reeling from the worst holiday shopping season in decades, shed 45,000 jobs last month. Consumers have shown few signs of returning to stores and malls anytime soon, and analysts expect job losses to keep rising as retailers shrink, merge or go out of business. Moody's estimated that the stimulus, with its payroll tax cuts and other steps to put money in consumers' pockets, would create 752,000 retail jobs by the end of 2012.

"Everyone is battening down the hatches," retail analyst Patricia Edwards said. "There is this recognition that this time [consumers] are serious. They're really not going to spend."

Workers across demographic lines simply cannot afford to spend. While the national unemployment rate is 7.6 percent, the rate among select populations is far higher. The jobless rate among African Americans, for instance, is more than 12 percent; the rate among teenagers is about 21 percent.

Last month alone, a stunning 731,000 Americans stopped looking for work, dropping out of the labor force out of apparent frustration with their employment prospects.

"In the 30-page employment report," said Michael Feroli, a U.S. economist at J.P. Morgan Chase, "there is hardly a number that doesn't convey the brutal conditions in the current job market."


Republicans Achieve Their Dream... Nobody's Paying Taxes, and Government is Doing Nothing.... Because We're all Unemployed.

States' only option now is budget pain

Healthcare, parks, schools: Politicians' proposals to close budget gaps would hit where it hurts. Even zoo animals may not get a break.

By Ashley Powers and Richard Fausset / Los Angeles Times

Reporting from Atlanta and Las Vegas -- They have plundered reserves, enacted hiring freezes and engaged in all manner of budgetary voodoo to shield us from the pain.

But now state governments -- reeling from a historic free fall in tax revenue -- have run out of tricks. And Americans are about to feel it.

In some cases, they already have.

Nevada resident Margaret Frye-Jackman, 71, was diagnosed in August with ovarian cancer. She had two rounds of chemotherapy at University Medical Center, the only public hospital in the Las Vegas area.

Soon after, she and her daughter heard the news on TV: The hospital's outpatient oncology services were closing because of state Medicaid cuts. Treatment for Frye-Jackman and hundreds of other cancer patients was eliminated.

Luckily, Frye-Jackman's gynecological oncologist, Dr. Nick Spirtos, decided to open a tiny chemotherapy center in his office's empty storage room.

Today, he treats Frye-Jackman there, along with about 20 more cancer patients who were dumped by the hospital. Frye-Jackman's care is paid for with Medicare and supplemental insurance, but other patients can't cover the cost of full treatment. The doctor has considered putting donation boxes in the lobby.

"If this is what it's like in Nevada, with cancer stuff closing, is it like that everywhere?" said Frye-Jackman's daughter, Margaret Bakes, accompanying her mother to the doctor's recently. "Are all the other states closing stuff too?"

The answer, in at least 39 states, is "yes" -- or "soon." With personal, sales and corporate income tax revenue plummeting, state governments -- which recently trimmed their budgets to cover a cumulative $40.3-billion shortfall for the current fiscal year -- are now watching in horror as a $47.4-billion gap opens for 2009.

And for fiscal year 2010, they will face a $84.3-billion hole, according to the National Conference of State Legislatures. The total shortfall through fiscal 2011 is estimated at $350 billion, according to the Center on Budget and Policy Priorities, a nonpartisan think tank in Washington.

Unlike the federal government, nearly all states must balance their budgets. So legislatures either have to raise taxes, borrow money from dwindling rainy-day funds, or cut. The last option is becoming increasingly common.

"The easy budget fixes are long gone," Corina Eckl, fiscal program director for the National Conference of State Legislatures, said in a statement. "Only hard and unpopular options remain."

State lawmakers can expect some relief from the federal stimulus package -- but it is far from a cure-all. The version passed by the House of Representatives would cover only about 45% of the projected state deficits. A Senate version of the bill, which has yet to be approved, would, in its present form, offer even less relief.

The budget-cutting plans that have emerged from state capitols so far have a potential effect on almost everyone. Parks will close. Environmental programs will be scaled back. Bus and ferry routes will shut down, possibly sending more drivers onto clogged streets and highways. Schools may go without school nurses, and classes may become more crowded. Sick people who rely on state health programs may instead get sicker.

Washington state's predicament illustrates the brutal reality lawmakers are facing in the hardest-hit states. Washington's budget gap for 2010 will total 18.5% of its general fund, making it the sixth-worst situation in the nation. (Nevada is facing the most serious shortfall, with a 38% gap; California's 22% gap is the fourth-worst, behind Arizona at 28% and New York at 24%, according to the National Conference of State Legislatures.)

The Evergreen State must close a $5.7-billion shortfall in the next two years. Raising taxes there, as in many other states, continues to be an unpalatable strategy for politicians: Democratic Gov. Chris Gregoire, amid a tough reelection bid last year, made a no-new-taxes pledge and appears to be sticking to it.

That leaves lawmakers in the Olympia statehouse slugging it out over what to cut.

The governor has proposed pay freezes and layoffs for teachers and other state employees, a $350-million reduction in funding for higher education, closure of 13 state parks, early release for low-risk prisoners, and a 42% reduction in the state's popular health insurance program for the working poor -- a program that provides last-resort coverage to 104,000 people.

The plan also would eliminate cash grants and health insurance for about 16,000 state residents who are temporarily disabled. The proposal wasn't some exaggerated public relations ploy to lure federal stimulus cash: In fact, it already factors in about $1 billion in federal aid. The reality has been sobering for a state that has prided itself on generously funded social programs.

"The cuts are incredible. They absolutely shred our healthcare system. I think you'll instantaneously see 60,000 more uninsured in our state," said Cassie Sauer, spokeswoman for the Washington State Hospital Assn. "They'll probably get sicker, and some of them will die."

Others across the nation are also coming to grips with disappearing services.

In Florida's Broward County, six to 10 drug-addicted women convicted of nonviolent crimes are stuck in jail and waiting to be admitted, along with their children, to a family drug recovery center whose budget has been slashed. They have been given probation contingent on admission to the center, but there's no room for them.

All 16 family slots at the Susan B. Anthony Recovery Center are full. Seven other slots were eliminated when the center lost $51,000 in funding. Ironically, the result could be a net financial loss to Florida. The center says it saves the state $3 for every dollar spent because it keeps women out of jail and their children out of foster care.

"You pay now, or you pay double later," Executive Director Marsha Currant said.

In the hamlet of Tubac, Ariz., residents are wondering whether state cuts will render it a ghost town. It's a community of 2,000 people and 120 artists' studios about 50 miles south of Tucson. The main lure for visitors, and their dollars, is Tubac Presidio State Historic Park, which preserves the remains of a 17th century Spanish settlement.

But after the Legislature lopped $1.6 billion off this year's budget, the state announced that the park could close as soon as this month.

"Tubac, like the rest of the state, is so dependent on tourism dollars," said Carol Cullen, executive director of the Chamber of Commerce. "To close it is crazy."

Arizona is expected to close eight state parks -- nearly a third of its total. Parks Director Ken Travous described the situation as "between brutal and absolute carnage."

In New York, the state's 76 zoos, aquariums and botanical gardens are bracing to lose all of their state funding next year, under a proposal by Democratic Gov. David Paterson. Those cuts, combined with a loss in the value of their endowments and fewer membership renewals, could result in reduced visiting hours, slashed educational programs, higher admission prices and deep employee layoffs.

Animals will pay the price, said Jon Dohlin, director of the New York Aquarium. Some won't be replaced when they die, and others could be sent to other facilities.

"I'm not going to look my walrus in the eye and tell him he's got to find somewhere else to work," Dohlin said.

At the aquarium Thursday, students from University Neighborhood High School in Manhattan had just finished a tour for science class. Officials from the Wildlife Conservation Society, which manages the aquarium and the Bronx Zoo, say educational programs could be among the first on the chopping block.

"Just to have these places as resources is important for anyone to come and learn," said science teacher Jaclyn Hoahing. "Our kids live in the city, and they don't get a chance to see wildlife around them."

In the foundering economy, officials in Muscogee County, Ga., should be thrilled that they are about to receive more than 28,000 new residents over the next two years -- the result of the Army moving a tank school from Ft. Knox, Ky., to Muscogee's Ft. Benning.

Instead, Muscogee officials are worried that they can't handle the flood of new public school students -- some 4,000 of them -- who are on the way. The school district already cut $2.8 million out of its budget this year in response to state funding reductions. The state reductions may be more than $5 million next year, when the first wave of students begins showing up.

School district officials are drafting a letter to the state asking for an exemption. "We are being squeezed from both ends," said Myles Caggins, the school district's chief of operations and facilities.

Budget trouble has even arrived in Alaska, where Republican Gov. Sarah Palin had been anticipating a comfortable surplus -- fueled by the summer's high oil prices -- of at least $5 billion.

No more.

With the double whammy of a declining economy and sharply lower oil prices, Palin announced last week that spending in the current fiscal year would have to be trimmed by $268.6 million to make up for a total shortfall of $1.65 billion.

Much of the savings Palin expects to realize is in delayed oil tax credits, not actual spending cuts. The remainder of the shortfall will have to come from additional cuts, or the state's estimated $7 billion in savings.

Palin is more ambitious than most governors these days. In her recent State of the State address, she announced she was resurrecting a long-dreamed-of plan to build a road across the wilderness from Fairbanks to Nome. Total cost: $2 billion.

Palin has not said where the money would come from.


State Economies Continue to Buckle... as Republicans Congratulate Themselves On Causing It.

February 7th, 2009 1:16 pm
7 U.S. states borrowing to pay jobless benefits

NEW YORK, Feb 6 (Reuters) - Seven U.S. states have been forced to borrow from the federal government to cover the rising cost of unemployment benefits, the National Conference of State Legislatures said on Friday.

Michigan already owes the government more than $1 billion, the bipartisan organization said in a statement.

The other states that have been forced to borrow are California, Ohio, New York, South Carolina, Indiana and Kentucky.

"Kentucky is in dire straits," said Brent Yonts, chair of the NCSL Labor and Economic Development Committee and representative for Kentucky.

"We've got to look at the whole system because the whole system is collapsing, just like everything else."

Kentucky's jobless rate stands at 7.8 percent, above the national average of 7.6 percent released in a government report earlier Friday.

Fourteen states have jobless rates that exceed 7.6 percent, with Michigan, Rhode Island and Puerto Rico showing rates higher than 10 percent.

"No one anticipated this type of increase that would put such a strain on state unemployment systems," said Diana Hinton Noel, a labor analyst for the NCSL.

States pay for jobless benefits by levying payroll taxes on employers. These are deposited into the federal Unemployment Trust Fund, which keeps separate accounts for each state, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

Individual state accounts are fast dwindling as job losses shrink payroll tax revenue.

The Department of Labor earlier reported that 598,000 jobs were lost in January. More than 3.5 million jobs were lost in 2008 and more than 11 million Americans are unemployed.


GOP Sees Positives In Negative Stand
Leaders Seize On Spending Issue

By Alec MacGillis and Perry Bacon Jr.
Washington Post Staff Writers
Monday, February 9, 2009; A01

Three months after their Election Day drubbing, Republican leaders see glimmers of rebirth in the party's liberation from an unpopular president, its selection of its first African American chairman and, most of all, its stand against a stimulus package that they are increasingly confident will provide little economic jolt but will pay off politically for those who oppose it.

After giving the package zero votes in the House, and with their counterparts in the Senate likely to provide in a crucial procedural vote today only the handful of votes needed to avoid a filibuster, Republicans are relishing the opportunity to make a big statement. Rep. Pete Sessions (R-Tex.) suggested last week that the party is learning from the disruptive tactics of the Taliban, and the GOP these days does have the bravado of an insurgent band that has pulled together after a big defeat to carry off a quick, if not particularly damaging, raid on the powers that be.

"We're so far ahead of where we thought we'd be at this time," said Rep. Paul D. Ryan (R-Wis.), one of several younger congressmen seeking to lead the party's renewal. "It's not a sign that we're back to where we need to be, but it's a sign that we're beginning to find our voice. We're standing on our core principles, and the core principle that suffered the most in recent years was fiscal conservatism and economic liberty. That was the tallest pole in our tent, and we took an ax to it, but now we're building it back."

The second-ranking House Republican, Rep. Eric Cantor (Va.), put it more bluntly. "What transpired . . . and will give us a shot in the arm going forward is that we are standing up on principle and just saying no," he said.

The fact that the stimulus legislation keeps moving forward nonetheless has done nothing to dim Republicans' satisfaction. Rather, they sense a tactical victory, particularly in the framing of their opposition to the plan as a clash with congressional Democrats instead of with President Obama, who remains far more popular with voters than does Congress.

Republicans are holding congressional Democrats responsible for the wasteful spending they say is in the stimulus package, even though most of the big-ticket items -- for renewable energy, health care and schools -- are ones that Obama wanted in the package to advance his long-term goals.

For a while, the president did not exactly resist this tack, leaving the impression that the bill is mainly a congressional creation, but he started to defend it more vigorously last week. It is a triangulation of sorts, with Republicans hoping to drive a wedge between congressional Democrats and Obama.

"The president has done a good job reaching out to Republicans, and he has said he wants to approach this crisis . . . on a bipartisan basis. That's good, and we're willing to work with him on that. But this bill is not the president's bipartisan plan," Sen. John Cornyn (R-Tex.) said yesterday on "Fox News Sunday."

Tom Davis, who retired from his Northern Virginia congressional seat last month, has long warned about the party's decline among moderate suburban voters. But with George W. Bush now off the national stage, Davis is upbeat about the party's prospects in its initial tests: the House seat in Upstate New York that had been held by Sen. Kirsten Gillibrand (D), and Virginia's gubernatorial race.

"There was such antipathy to Bush, and you take him out of it and a lot of the Democrats' energy evaporates. It doesn't change the poll numbers, but it changes the energy," he said. "That's why these elections are going to be different."

The flash of triumphalism -- fueled further by schadenfreude over the tax troubles of some of Obama's Cabinet nominees -- is not without risk. Voters hungering for a response to hard times may see the GOP's battle against the stimulus package as unsympathetic to their plight. And Obama may decide it is not worth reaching out to Republicans on future legislation.

The party is also likely to be less unified on the final vote on the stimulus package. Rep. Michael N. Castle (Del.), one of a dwindling number of moderate Republicans in the House, said he hopes the bill will improve enough in its final version so he can vote yes.

"I'm always concerned when the Republican Party takes a negative position on something that should be moving forward," he said. "I believe there could be a good stimulus package, and hopefully we've created enough doubt that they'll work it out in the Senate."

Democrats scoff at the Republicans' claim to regrouping, saying the declarations against big spending are undermined by the deficits that were run up under Bush and GOP congressional leadership. The stand against the stimulus appeared to be more rejectionist than the discovery of a new approach for moving forward, they said.

"That 'no' vote was a very tentative first move, and it remains to be seen what level of engagement and cooperation they're going to give the president," said Joel Johnson, who served as a policy adviser to President Bill Clinton. "It is much easier, when you're not sure what your strategy is, to revert to a 'no' strategy, and that's what they did."

The Republicans' bravado comes amid another sign of the depth of the party's plight: Data from Gallup show that the Democrats' edge in party identification is larger than it has been since 1983. The GOP's 178 House members, concentrated in the South, are its lowest total since 1993; it is clinging to the 41 Senate seats it needs to uphold a filibuster; it holds 21 governorships and has lost clout in state legislatures.

The solidarity against the stimulus package also glosses over a divide over comeback strategy. Many Republicans see this moment as equivalent to 1993, when the party handled a new Democratic president by resisting and capitalizing on any perceived overreach.

The party, these Republicans say, need only hold true to its small-government principles for a center-right electorate to gravitate back. That means rejecting the stimulus package and offering in its place an alternative package centered mostly on tax cuts, as House Republicans did last week.

It also means focusing the stimulus critique on relatively small slivers of the package that echo old culture wars, such as spending for contraceptives and for the National Endowment for the Arts. And it means rallying to Rush Limbaugh, who has put himself forward as a de facto party leader, penning an op-ed article in the Wall Street Journal and accepting the on-air apologies of Rep. Phil Gingrey (R-Ga.), who criticized the radio host and paid for it in a deluge of angry calls.

"If you get the principles right in the first place . . . the politics will take care of itself," said Rep. Jeb Hensarling (R-Tex.), a leader of the new conservative vanguard. "It comes down to basic principles -- who's better at preserving jobs, small business or the government? If you think it's small business, look to the Republicans."

Curly Haugland, a Republican National Committee member from North Dakota, said there is little need for ideas when the main task for the GOP will be fighting back Democratic ones. "We're going to have plenty to do just playing defense," he said. "These people [the Democrats] are going to be aggressively on the march."

Others argue that the past two elections represented a more fundamental turn against Reaganite assumptions that dominated for nearly three decades, and that the party has to develop an agenda that goes beyond tax-cutting to lay out a vision for government that, while smaller than what Democrats want, is active in its own right.

"They're talking too much about opposing," Florida GOP Chairman Jim Greer said of the House Republicans. "They're talking too much about voting 'no' and not about how they're going to solve these issues. I'm proud the party took a stand on principles, but I also want to hear about how the Republican Party leaders intend to solve problems."

Mitt Romney, the former Massachusetts governor and presidential candidate, praised House leaders at their recent retreat in Hot Springs, Va., for their opposition to the stimulus, but he also urged them to present a health-care plan before the Democrats did.

The need to move forward was an argument for selecting Michael S. Steele as Republican National Committee chairman. The former Maryland lieutenant governor has good relations with more moderate members of the party, hails from the suburbs in a blue state, and puts a more diverse face on a party that has not had a single African American governor or member of Congress in six years, and is also lagging badly with Hispanic voters.

In his initial statements as party leader, however, Steele has stuck to tried-and-true themes, including invoking the GOP's 1994 victory as a model and praising House leaders for their stimulus vote. "The goose egg that you laid on the president's desk was just beautiful," he told them. "You and I know that in the history of mankind and womankind, government -- federal, state or local -- has never created one job. It's destroyed a lot of them."

Steele is also facing a distraction -- a federal inquiry into allegations that his 2006 Senate campaign paid a defunct company run by his sister for services that were never performed. The campaign's finance chairman made the allegations to federal prosecutors last year as he sought leniency during plea negotiations on unrelated fraud charges.

For now, the big question facing the Republican Party is how voters will perceive its stand against the stimulus package, a judgment that is likely to depend on how the package is perceived months from now. Republicans dismiss any worry that, in their rejection, they will be seen by voters as indirectly running against an economic recovery.

Given how small their numbers are, they noted, it will be difficult for them to actually block the bill. And their own constituents, they said, are becoming increasingly critical of the package.

"This thing is a dog and it doesn't hunt," Ryan said. "Everyone thinks Washington is just going back to pork-barrel spending. You can't walk down the street in Janesville, Wisconsin, without someone trashing it."


Ben Nelson and Susan Collins: Clearly Don't Understand the Multiplier Effect. In Fact It's Unclear What Their Objectives Are.

The $800 Billion Gamble: Economists Say Stimulus Cuts could be "Disastrous"

by Thomas B. Edsall at HuffPo

Senate Majority Leader Harry Reid, pushing for fast action on the stimulus bill, turned to a well-worn maxim: "We should not let the perfect be the enemy of the good."

The bill the Senate is expected to send to a conference committee as soon as Tuesday includes provisions -- particularly the $69.8 billion one-year "patch" on the alternative minimum tax (AMT) -- that key economists and budget specialists say are less likely to have the maximum anti-recessionary impact than direct spending provisions calling for substantial purchases by all levels of government.

The Senate has compounded the weaknesses in the bill by sharply cutting what economists agree are essential ingredients of a stimulus bill, including $40 billion in aid to states and $16 billion for school construction.

The reaction to the changes adopted at the behest of a small but key group of "centrist" Senators -- Maine Republicans Susan Collins and Olympia Snowe, Ben Nelson (D-NE) and Arlen Specter (R-PA) -- was strong.

"The compromise is worse than the original bill because it is smaller, and the changes appear to have reduced rather than increased the bang-for-buck effectiveness of the bill," said Berkeley economist J. Bradford DeLong, who was a Deputy Assistant Treasury Secretary during the Clinton administration. "Ben Nelson and Susan Collins don't appear to have understood what they were doing very well -- the point is to keep lots of extra Americans from being unemployed for the next two years and have them, instead, do useful things for the country. Nelson and Collins, well, it's not clear what their objective is."

Jeffrey D. Sachs, Quetelet Professor of Sustainable Development at Columbia -- considered one of the world's foremost economists and a leading advocate of "shock therapy" as applied to former Eastern bloc countries -- said that "comparing the House and Senate versions, the Senate version is clearly worse: more tax cuts, less infrastructure, and less in transfers to state and local governments." Instead, Sachs said, "Immediate and sizable spending increases in the stimulus package should be directed to a few areas: significant support for our crisis-ridden state and local governments [just what got cut in the Senate], especially for health (Medicaid), education, and other urgent public services; income support (unemployment, anti-poverty including food stamps and child nutrition); health care coverage for the uninsured (as well as adequate Medicaid funding mentioned earlier); and a significant multi-year rollout of infrastructure of all sorts (roads, rail, other mass transit, ports, water, energy, broadband, etc.)."

University of Texas economist James Galbraith was more outspoken: "The behavior of the so-called bipartisan group has been outrageous. On the economics, they are pretending to know things they can't possibly know: specifically, (a) how deep and serious the crisis actually is, and (b) what is 'stimulus' and what is not. The reality is, professional economists have no clear idea how bad things can get..... The cutbacks to state aid have every potential of being disastrous. What they really reflect is the indifference of people who represent places like Nebraska and Maine to what goes on in New York or California."

Menzie D. Chinn, professor of Public Affairs and Economics at the University of Wisconsin, said about the Senate bill, "I don't understand the direction of the movement toward cutting spending. Cutting the transfers to the states seems particularly ill-advised, as we have a good feeling that the propensity to spend out these funds will be high and relatively quick."

Chinn said he would prefer more "direct infrastructure spending, more transfers to states, and fewer tax cuts than in either bill. As a person, I think a lot of these cuts out of the original Senate bill were pretty mean-spirited, including cutting $1 billion from Head Start/Early Start, or bone-headed, like eliminating $200 million from the National Science Foundation. But I must admit I am not surprised that the Republicans would push these sorts of measures."

One of the biggest -- but least discussed -- of the big ticket items in the compromise Senate bill is the "patch" on the Alternative Minimum Tax. The AMT was originally designed to insure that the super-rich, capitalizing on loopholes, pay at least some federal tax. Bracket creep through inflation, however, means the AMT has begun to adversely affect upper-middle-class households with incomes from $100,000 to $300,000.

The massive AMT tax patch expenditure -- $12.4 billion more than the entire Department of Education's $59.4 billion 2007-8 budget -- received a "grade" of D-minus, the lowest grade given to any the Senate proposals, from the Brookings-Urban Institute's Tax Policy Center. "Neither timely nor targeted; makes no sense as economic stimulus," the Center declared about the provision in their Tax Stimulus Report Card.

"The AMT is a complete waste of money from a stimulus point of view," said Georgetown economist and former chief economist for the U.S. Department of Labor, Harry J. Holzer. "All the money goes to high income people who will not spend most of it."

The Congressional Budget Office (CBO) also performed calculations to indicate what kind of new spending and tax cuts would be most effective. The changes in the Senate bill to bring Senators Collins, Specter, Snowe, and Nelson on board appear to directly contradict the CBO recommendations.

The CBO calculated the multiplier effect -- "the cumulative impact on GDP [Gross Domestic Product] over several quarters" -- of various types of spending and tax cuts. "For example, a one-time increase in federal purchases of goods and services of $1.00 in the second quarter of this year would raise GDP by [a low estimate of] $1.00 to [a high estimate of] $2.50 in total over several quarters." In other words, the higher the multiplier, the better the stimulus effect.


Source: Congressional Budget Office

Note: For each option, the figures shown are a range of "multipliers," that is, the cumulative change in gross domestic product over several quarters, measured in dollars, per dollar of additional spending.

According to the high estimate, the AMT patch has just one fifth (0.5) the multiplier effect of direct government purchases by state, federal or local governments (2.5). The CBO notes that "direct purchases of goods and services by governments, including investment in infrastructure, tend to have relatively large effects on GDP."

After dicing and slicing the Senate stimulus bill, Senator Snowe of Maine did what politicians always do: declare they did the right thing.

"The catalog of arguments in the Senate have spanned the gamut -- from those who believed this bill initially was about the right size and the right balance to those who thought it was far too expensive, providing too little bang for the proverbial buck," Snowe said. "However, through true consensus building, the Senate has rightly been engaged in a vigorous and healthy debate to arrive at this monumental compromise."

No matter what the House and Senate finally agree upon, there is no guarantee that the stimulus legislation will pull the country -- or the global economy -- out of its downward spiral.

"Just looking around the world, demand is collapsing," Nigel Gault, managing director at IHS Global Insight, told the New York Times. "This recession is of a different order of magnitude." Ian Shepherdson of High Frequency Economics told clients, according to the Times, that "We remain firmly of the view that the package now in Congress is the bare minimum required," predicting that "it will ultimately prove too small." Allen Sinai, who runs Decision Economics, also commented on the stimulus bill to the Times: "My model says it will generate three to four million jobs, but I'm not sure I believe my own models....We're in uncharted waters here."


Ben Nelson and Susan Collins "Compromise" Gut Funding For Education and States. With These Two "helping" who needs enemies?

Poll: Obama Stimulus Effort Backed By Huge Majority

Even as the media continues to cast the stimulus saga as one of mounting pressure on President Barack Obama to deliver a bill that's become mired in partisan bickering, public opinion remains squarely behind the President's effort. As Obama embarks today on a mini-campaign to sell the stimulus, the numbers indicate that he may be preaching to the converted. Jake Tapper of ABC News provides the essential rundown:

Sixty-seven percent of the American people approve of how President Obama's handling his efforts to pass an economic stimulus bill, as opposed to 48% for Democrats in Congress and 31% for congressional Republicans.

In addition, the disapproval rating for Congressional Republicans remains a "staggeringly high" 58%. And the public continues to view the package as a matter of paramount concern. 51% of those polled consider the plan's passage to be "critically important," with "Only 16% say it is 'not that important.'"

What remains obscured by these numbers, however, is whether or not public sentiment lines up behind the various compromises wrought and cuts made by the coterie of "moderate" Senators. Here, the press has done a poor job elucidating what is precisely at stake. Senators Ben Nelson and Susan Collins have been allowed to skate by and issue fundamental falsehoods about what they have done to the bill. In a press release, the two Senators claim to have "funded education," and have ensured that the bill will contain "robust spending on infrastructure to create jobs, $87 billion in assistance for states, and assistance to schools, especially for special education and Pell grants." Yglesias begs to differ:

Would you ever in a million years have guessed from this rhetoric that the primary change Collins and Nelson made was to implement big reductions in aid to states and, especially, in funding for education? I think not. In their rhetoric, Collins and Nelson preserved vital education funding and state assistance while eliminating various metaphorical animal products. Meanwhile, actual changes Collins and Nelson made include:

* Elimination of $25 billion in flexible funding for state governments.
* Cut $7.5 billion in funding for "state incentive grants" to help states make progress toward NCLB goals.
* Eliminated $19.5 billion in construction aid for schools and colleges.
* Reduced new aid for the Head Start early childhood program by $1 billion.

Nowhere in their statement do Nelson and Collins make any effort to justify these decisions. Indeed, they don't even seem prepared to admit that they made these decisions.

And no one is holding Collins or Nelson to account, either. Nevertheless, the stage for these compromises -- and the attendant concerns that have since issued forth from economists like Paul Krugman, who believe that damage is being done to the bill's efficacy -- was set by President Obama himself, who sought out bipartisan input and support at the expense of his negotiating position. As Ryan Grim notes, Obama's "stimulus spending is one leg of a three-part approach" to stabilizing the economy, and if the stimulus bill shows any degree of efficacy, the President may elect to take a second pass. Whether the public will stand behind a rerun of this grueling period in the same buoying numbers is anybody's guess.

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