Another federal stimulus stokes debate

Talk of another economic stimulus package on Capitol Hill has Republicans sharpening their knives and Democratic leaders vacillating, though some economists and Democrats say the sagging economy badly needs another jolt of federal spending.

Sobered by persistent job losses, Democrats suggest they are open to additional stimulus while they simultaneously defend the success of President Obama’s $787 billion plan that passed in February.

Democrats argue that the stimulus was designed to roll out over two years and, with just about 10 percent of the money spent so far, it is too early to gauge the effectiveness of the plan.

“We are … just 130 days out on the adoption of a very, very major effort to get the economy moving. Certainly, I don’t think we can make a determination as to whether or not that’s been successful,” House Majority Leader Steny H. Hoyer, Maryland Democrat, told reporters on Capitol Hill this week.

“But I think we need to be open to whether or not we need additional action,” he said.

Mr. Obama is “not ruling anything out, but at the same time he’s not ruling anything in,” White House press secretary Robert Gibbs said Wednesday en route to Rome with the president aboard Air Force One.

Prodding the administration toward another stimulus dose are economists such as Laura Tyson, an informal adviser to Mr. Obama. In a speech in Singapore this week, Mrs. Tyson reportedly said a second spending package focused on infrastructure projects was needed because the first stimulus was “too small.”

Mrs. Tyson, who served as an economic adviser in the Clinton administration, said the economy was a “sicker patient” than realized when concocting Mr. Obama’s first remedy.

Democrats calling for another stimulus include Sens. Christopher J. Dodd of Connecticut and Sheldon Whitehouse of Rhode Island, who say it’s “probably needed,” and Rep. James L. Oberstar of Minnesota, who has been pushing a plan for more spending on transportation infrastructure.

House Democrats also have floated proposals to further extend unemployment payments or suspend payroll taxes as alternative stimulus measures.

The ongoing spending, however, got a bad review Wednesday in a Government Accountability Office report that showed states were not using the money the way Mr. Obama intended.

The report said states often opted for short-term spending to keep local government afloat rather than long-term investments in new infrastructure or comprehensive education reforms that were envisioned by the Obama administration.

Instead of building schools, many states were paying teachers’ salaries. Instead of constructing new roads and bridges, much of the money has been spent repaving highways, the GAO report said.

Still, federal dollars did help bail out state budgets, forestall teacher layoffs and support Medicaid payments.

Senate Minority Leader Mitch McConnell said the report validated Republican doubts about the stimulus spending.

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