The Stim Package Gets Punked

Having thoughtfully let the conservative opposition to the stim package know that he's ready to give away the store to get something - anything - passed, it will probably come as no surprise that suddenly so many Senate Blue Dogs have defected that President Obama no longer has the votes to pass it and will have to remove everything that may have made it work.

Senate Democratic leaders conceded yesterday that they do not have the votes to pass the stimulus bill as currently written and said that to gain bipartisan support, they will seek to cut provisions that would not provide an immediate boost to the economy.

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Moderate Republicans are trying to trim the bill by as much as $200 billion, although Democrats working with those GOP senators have not agreed to a specific figure.

What "moderate Republicans"? Olympia Snowe? In the World of the WaPo, Sheilagh Murray and Paul Kane presiding, Mitch McConnell has somehow morphed into a "moderate". I mean, they must be talking about him, he's the point man on this thing.

Four months after Congress tried to rescue the economy with a $700 billion bailout for the financial industry, Republicans and Democrats are suddenly competing to bail out financially struggling homeowners.

Having spent hundreds of billions of dollars rescuing financial institutions, only to see the economy spiral even deeper into crisis, liberal and conservative economists and lawmakers are pushing to redirect the economic stimulus bill to what they say is the core problem: the housing market.

Senate Republicans are seeking new tax breaks and up to $300 billion in mortgage subsidies to attract homebuyers. Democrats want to spend at least $50 billion on federal programs aimed at reducing mortgage foreclosures.

There's a lot going on here, and none of it is particularly good for the country.

To start with, the Pubs have apparently backed off on their previous alternative plan (which is maybe why it disappeared), though it still remains in the background, and have decided to go another route - outdo the Dems. Though their objectives aren't clear yet, there could be several different reasons for such an abrupt turnaround.

• They might have seen the writing on the wall. Having lost a sizable portion of their backing, being persona non grata from s to shining s, and with what's left of their own constituency unhappy at their obstructionist opposition to a bill everyone knows we need (you know, that Zero Vote they were so proud of not so long ago), they may have decided that committing suicide for the sake of their failed tax cut ideology maybe wasn't the way to go after all. Calling as it does for a smidgen of self-awareness and the willingness to cop to a mistake, this is so unlikely that I think we can rule it out.
• Being the true-red ideological believers that they are, maybe they've decided that Obama's non-conservative solution won't work and when it doesn't they'll be able to blame its failure on him (they can, after all, count on a compliant conservative news media to c their a's by conveniently forgetting it was the Pubs who pushed the number into the stratosphere), and sell us on tax cuts once more. Meanwhile, they will sabotage enough of the package that will actually produce results to make it so weak that it's unlikely to effect any change whatever when all's said and done. This is much more likely. In fact, it stinks of Republican arrogance just as you'd expect any trick of theirs would. The problem is that even a weak bill with a single strong component - mortgage relief - is going to help the economy and enough homeowners to redound to Obama's credit, effectively hoisting them on their own petard. If enough of the infrastructure support stuff gets passed, they're sunk and Obama's a shoe-in for a second term. Meanwhile they'll be fighting for the Ron Paul/Michael Steele vote, consigning them to a dark corner for decades to come. We're probably not that lucky.
• Or they are using the old Bush Bait-and-Switch - setting up a plan that on its face seems to help homeowners but in fact helps banks more.

This last, diabolical as it is, is the one I think they'd choose. They want to keep the party going and they think they can by baffling the Democrats with BS that sounds like it wants to go where everybody wants to go but in effect subtly shoves the whole thing away from people and toward the banks and corpos. Instead of mortgage relief, the Pubs want a tax credit - in effect a tax cut.

President Obama and senior Senate Democrats have also signaled that they would support Republican proposals for a $15,000 tax credit for homebuyers. Indeed, Senate Democrats were reviewing ideas on Tuesday that would outdo the Republican proposal by offering the tax credit to all homebuyers.

It won't work as well and it may not touch at all those who need the relief most. They still want the FM's to take over the bad mortgages but as always there's a pretty serious catch.

Mr. McConnell has proposed that the federal government subsidize mortgages with a fixed interest rate of 4 percent to 4.5 percent. Fannie Mae and Freddie Mac, the two government-controlled mortgage-finance companies, would use their buying power in the mortgage market to drive the rates down.

The plan was developed by R. Glenn Hubbard, a former senior economic adviser to former President George Bush who is now dean of Columbia University’s business school, and by Christopher Mayer, vice dean of the business school.

The low rates would be open to any “creditworthy” borrowers, which would probably exclude many if not most homeowners who are now facing foreclosure.

(emphasis added)

Neat, eh? It's the old Republican eligibility scam which they've been using to great effect ever since Lyndon rammed the Great Society Programs down their throats. Appear to give in on the concept, then fix the formulas so no one is eligible to take advanitage of it.

And incidentally, haven't we passed the point where we should be taking the views of committed neocons and Chicago School economists seriously? And especially a clown like Glenn Hubbard, the darling of AEI and a principle designer of the Bush Economy, including the odious corporate-aimed tax cuts, that caused all this trouble in the first place. Hubbard remains an ardent supply-sider even though the people who came up with the idea have admitted it was a scam and there's no evidence to support its claimed effects whatsoever. McConnell's proposal should be ditched for its source alone. It's typical neocon nonsense and a sleezy trick besides.

I don't know exactly what this bunch has up their sleeve now but whatever it is it won't be aimed in our direction. The Republicans have only one agenda: "We make the rich richer (and skim off as much as we can for ourselves)." This seeming acknowledgment that they fucked up the economy and want to make amends is just another slimy con job and we need to be looking for the hand that's in our pocket while the other one's patting us on the back.