It’s somewhat unclear what exactly Senators Nelson, Collins, Specter and Snowe were aiming for in the cuts they demanded from the Senate stimulus bill. They didn’t dispute the need for a large economic stimulus, nor did they offer a detailed critique of why spending on school construction or state aid would be “less stimulative” than other far less stimulative measures such as the 70 billion dropped on the Alternative Minimum Tax cut. Say what you will about the GOP leadership’s policy chops, but their critique of Obama’s plan was at least internally consistent. Instead, the centrists seem to have looked at what seemed (to them) an arbitrarily large number, and picked a less large but no less arbitrary number to go for, and pulled the cuts out of their behind. Is this a less effective stimulus bill? Yes. That 100 billion fewer probably translates directly into 600,000 fewer jobs.
However, this thing is far from over, and the field of play looks more encouraging daily. First of all, the Senate bill isn’t the final bill. It now goes to a joint House-Senate conference committee, where those cuts could just be reinstated. Obama’s continuing campaign on behalf of this bill (he’s in Indiana today) I think strongly suggests that the bill won’t be passed as is. Secondly, the public is (right now) strongly behind him. Moderate Republican Senators are going to want as much daylight between themselves and their party as possible, and maintaining party discipline in the House will be a real struggle with reelection looming.
Lastly, this compromise means that three Republican Senators from very blue states are going to have to go on national television and defend cutting money for public education and allowing their state governments to throw teachers and cops out of their jobs. Olympia Snowe might have, last week, found that the least controversial place to cut funding. But outside of Washington, giving money to public education is actually pretty popular. Furthermore, you have influential state-level Republicans like Charlie Crist and Sarah Palin saying in very emphatic terms that they NEED this plan. No one wants to go on TV to defend taking money away from children, and that also gives the impression that these were the least essential parts of the plan. The Democrats may yet win the spin war, and I wouldn’t be surprised if these Senators start feeling the need to make some major concessions on the cuts they proposed.
Ezra Klein suggests that Rahm gamed this from the start. If these centrists end up having to publicly knuckle under to Obama due to top-down and bottom-up pressure, they’ll have to reevaluate their real power to demand meaningful concessions from the liberal near-super-majority.