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Pelosi Was Right

Carl Hulse has a nice piece in today's New York Times on the reaction among Democrats to Nancy Pelosi's decision to cut a deal with House Republicans on a stimulus package. The basic question is whether Pelosi gave away too much in agreeing to leave food stamps and extended unemployment benefits out of the bill, as Republicans demanded in exchange for including tax rebates to people who make too little to pay income tax. Charlie Rangel, for one, wasn't sold on the bargain:

The final agreement showed that Ms. Pelosi, often viewed as a classic liberal, is not afraid to stray from liberal orthodoxy to advance her cause. And she again demonstrated that she is willing to buck the chairman of an important committee in the process. Representative Charles B. Rangel, the New York Democrat who is chairman of the Ways and Means Committee, was unenthusiastic about the agreement and had a long and private debate with the speaker.

As Hulse points out, Pelosi had a lot of leverage here: she could always have introduced a standard liberal stimulus bill and dared Republicans to vote against it in an election year. For the sake of argument, let's assume the GOP wasn't bluffing and would actually have blocked a stimulus package it didn't like. Did Pelosi make the right decision? From a Democratic point of view, it's fairly obvious that she did. The consensus among center-left economists seems to be that fiscal stimulus at this juncture will probably, on balance, do a little bit of good. But it's hard to find anyone who makes the case that an ideal package would be dramatically more effective than the one Pelosi agreed to. The stimulus is worth more to Democrats as a political achievement than an economic one: the 110th Congress hasn't passed much in the way of substantive legislation, and blaming Republican obstructionism (though certainly fair) will go only so far on the campaign trail. It was critical for Democrats (especially freshmen elected in red-leaning districts) to be able to point to the legislation as an example of something Congress managed to get done. There are times when it's better to hold fast and take your case to the voters rather than pass a less-than-ideal bill. But this doesn't seem like one of them: the achievement is more valuable than the campaign issue would have been.

Incidentally, Pelosi says of President Bush, "He needed the stimulus package." It's a sad commentary on a presidency when routine fiscal stimulus is considered to be a major legacy-building accomplishment.

--Josh Patashnik