- The Washington Times - Thursday, July 9, 2009

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.

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“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.

“The GAO report should add to growing public concerns about the administration’s tendency to rush and to overpromise on results when it comes to spending taxpayer dollars and increasing the national debt. But it shouldn’t surprise anyone who followed the debate,” the Kentucky Republican said.

“Americans should be skeptical any time someone in Washington downplays scrutiny and overplays speed. They have even more reason to be skeptical now.”

The chatter about another stimulus bill followed the country’s unemployment rate climbing to 9.5 percent in June, with 433,000 jobs lost last month. The U.S. economy has hemorrhaged more than 6.5 million jobs since the recession began in December 2007.

Mr. Obama made jobs a chief selling point of his stimulus plan, saying it would “save or create” 3.5 million jobs and keep the unemployment rate from rising above 8 percent.

“The people of Ohio - like people all over America - have a right to know: Where are the jobs?” said House Minority Leader John A. Boehner, Ohio Republican, whose home state’s unemployment rate tops 10 percent.

He aimed the critique at Vice President Joseph R. Biden Jr., who planned to visit Ohio on Thursday to tout the success of the current stimulus plan.

Senate Democrats, cognizant that Republican criticism of the mounting federal deficit and shortcomings of the last dose of stimulus could be catching on with the public, are much cooler to the idea of another stimulus.

“I’m not sure how you would do it,” said Senate Majority Whip Richard J. Durbin. Still, the Illinois Democrat said Mr. Oberstar’s proposal for more infrastructure spending could be a viable stimulus option.

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