Recovery Act is the Number One Reason to Re-elect President Obama

Monday, October 22nd, 2012

The American Recovery and Reinvestment Act of 2009 rejuvenated plans for the Fulton Street Transit Center in lower Manhattan. The project is set for completion in June 2014. Photo credit: Josh Marks


(By Josh Marks, cross-posted at Green Forward)

Republicans keep falsely claiming President Obama’s $787 billion economic stimulus, officially known as the American Recovery and Reinvestment Act of 2009 (ARRA), was a massively wasteful failure. Right now the GOP is using all the money from their right-wing billionaire donors to inundate swing state voters with their anti-stimulus, pro-austerity message.

But in reality the stimulus is a smashing success. It is more than 50 percent bigger than Franklin D. Roosevelt’s New Deal and has begun to profoundly change the United States of America in ways many of us are just beginning to realize. The economic stimulus has kickstarted our transition to a 21st Century economy built to last. For example, $90 billion was pumped into the clean energy sector. To put that in perspective, a decade earlier President Clinton proposed a modest $6.3 billion clean energy initiative that was shot down. The Recovery Act is also one of the most transparent pieces of legislation in history. Contrary to the Republican lies, there is very little fraud or abuse associated with ARRA thanks to unprecedented levels of oversight. Click here to go to and track how Recovery funds are being spent and report fraud, waste or abuse.

Time Magazine senior correspondent and award-winning environmental journalist Michael Grunwald’s new book “The New New Deal: The Hidden Story of Change in the Obama Era” investigates the story behind The Recovery Act. The author argues that the economic stimulus represents everything Obama meant when he was talking about hope and change, but also exposed the ugly political reality of Washington partisanship fueled by Republican rage at anything associated with Obama.

The American Recovery and Reinvestment of 2009 helped start construction of the Second Avenue Subway on Manhattan’s Upper East Side, once dubbed “The Line That Time Forgot” for its many false starts over the decades. Photo credit: Josh Marks


Perhaps more than any other legislative achievement, The Recovery Act alone is reason enough to reelect President Obama. We should all celebrate the passage of historic health care and financial reforms, but the economic stimulus is doing more to move America forward than any other victory during Obama’s first term. Oh, and it also saved us from another Great Depression.

So why is this change so hidden? Why do so many Americans ask where this change is actually taking place? Grunwald argues that partly the Administration could do a better job selling the stimulus, but also there aren’t any Hoover Dam or Golden Gate Bridge-type public works projects that capture the public’s imagination. But that doesn’t mean nothing is going on. In fact, there are significant infrastructure, energy and other important projects taking place right now that are making a difference and improving our lives in ways we might not have paid attention to.

Here are just some of the over 100,000 projects, both large and small, being financed by The Recovery Act. Read “The New New Deal” for a fuller picture of the change taking place, but hopefully this list will give you an idea of some of the amazing progress being made in the United States of America thanks to The Recovery Act. For decades we neglected our infrastructure, transportation system, renewable energy, power grid, education and medical systems. The stimulus is finally starting to rebuild this great country.

Advanced Research Projects Agency-Energy (ARPA-E)

This new agency housed within the Department of Energy brings the best and brightest scientists, engineers, researchers and entrepreneurs to think outside of the box to solve some of our biggest energy challenges. They have already created a new scientific discipline by taking Biofuels to the next level. The program is called Electrofuels.

Brooklyn Bridge Restoration

During the month of July I lived in Greenpoint, Brooklyn and many times took the East River Ferry to lower Manhattan. As we would pass underneath the Brooklyn Bridge I would wonder what all that tarp, scaffolding and construction was all about. It turns out The Recovery Act is partially funding a badly needed upgrade to the iconic but deteriorating span linking New York’s two famous boroughs. The rehabilitation will be finished in 2014. Click here from more info from the NYC Department of Transportation on rebuilding the Brooklyn Bridge.

Photo credit: Josh Marks


California High-Speed Rail Project

The Recovery Act is investing $8 billion in a new high-speed rail (HSR) network as well as upgrading and improving existing passenger train service across the country. The most high-profile project is in California where the nation’s first bullet train is being built that will eventually connect Anaheim and Los Angeles to San Francisco via the Central Valley. The 520-mile rail line will be finished in 2020 and reach speeds of 220 mph, zipping passengers from L.A. to S.F. in under 2 hours and 40 minutes. Phase II will extend HSR service south to San Diego and north to Sacramento by 2026. The Recovery Act is also funding upgrades to existing Amtrak passenger rail corridors such as the Pacific Surfliner Corridor to improve on-time performance, reduce pollution and create a more comfortable experience for passengers.

But California isn’t the only state making passenger rail progress thanks to The Recovery Act. Last Friday in Illinois a Chicago-St. Louis Amtrak train reached 111 mph in a test run — a 30 mph increase over its previous speed. And the money right-wing governors in Florida, Wisconsin and Ohio foolishly rejected for rail improvements is being redirected to 15 other states that are happily taking the money to provide their citizens with world-class passenger rail service.

Shepherds Flat Wind Farm

U.S. renewable power from solar and wind has doubled since The Recovery Act passed. The stimulus financed the world’s largest wind farm in Oregon. The 845 megawatt Shepherds Flat Wind Farm opened for business in September and features an array of 338 American-made General Electric turbines. The wind farm is generating enough green energy to replace two coal plants and is estimated to have an economic impact of $16 million annually for Oregon.

The Recovery Act is investing in many more renewable power and energy efficiency projects across the country — from biofuels to geothermal to advanced batteries to LED lighting and more.

Moynihan Station

The Recovery Act is helping transform New York City’s main post office into Moynihan Station — a 21st Century replacement for aging Penn Station. If you have ever had to take an Amtrak train into or out of Penn Station, then you know the cramped, rundown corridors and waiting area that is not befitting of the greatest city in the world. Visitors coming from places in Europe and Asia with world-class train stations must be surprised to see the confusing layout and decrepit conditions of the busiest train station in America. Before catching a train to Washington, D.C., Boston, Albany or other destinations, hundreds of passengers stand in front of the big board announcing what gate to go to when the train arrives. When the gate number shows up on the board, usually about five to ten minutes before departure, everyone rushes towards a tiny escalator on either side and aggressively crams onto the escalator. The insane process repeats itself hundreds of times every day and is comical in its inefficiency. So converting the James Farley Post Office Building across Eighth Avenue from Penn Station into Daniel Patrick Moynihan station, what will be a world-class high-speed rail hub, could not come soon enough for weary New York train travelers.

Photo credit: Josh Marks


Second Avenue Subway

This past summer I lived in Brooklyn and worked on Manhattan’s Upper East Side so I would take the F or 6 train up Lexington Avenue and then walk east across Second Avenue. Thanks to The Recovery Act, the Second Avenue Subway is finally under construction. This is a project that has been on the drawing board since 1929 but has never been able to get going. That is until Obama’s stimulus jumpstarted the project that used to be known as “The Line that Time Forgot.” The Second Avenue Subway will relieve crowding along the Lexington Avenue lines by offering straphangers another option on the Upper East Side.

Here is a list of more projects moving forward with stimulus funding from the American Recovery and Reinvestment Act of 2009.


And nationwide The Recovery Act is funding the transition to electronic health records by providing incentives and penalties to push physicians to move from paper charts to digital medical records. Race to the Top is reforming the education system to close the achievement gap by boosting the lowest-performing schools. Lastly, The Recovery Act is bringing high-speed satellite broadband service to rural, unserved and underserved areas across the country. For the first time, residents and businesses in these rural areas will be able to access low-cost, high-speed Internet service.

Out of the many reasons to re-elect President Barack Obama, strong consideration should be given to the American Recovery and Reinvestment Act as the number one reason.


The New New Deal, Part III: Making It Matter

Monday, September 10th, 2012

(By NCrissie B)

In my past two posts, I’ve been reviewing Michael Grunwald’s The New New Deal: The Hidden Story of Change in the Obama Era. First, we saw the challenges of drafting and passing the American Recovery and Reinvestment Act. Then we looked at the challenges of making the stimulus bill work. Today we interview Michael Grunwald and see how the ARRA’s successes became ‘The Greatest Story Never Told’ … until now.

Michael Grunwald is a senior national correspondent for Time magazine. Before joining Time, Grunwald was a congressional correspondent, New York bureau chief, and investigative reporter for the Washington Post, and a local and national reporter at the Boston Globe. He has received the George Polk Award for national reporting, the Worth Bingham Prize for investigative reporting, the Society of Environmental Journalists award for in-depth reporting, and numerous other journalism awards.

A bias “towards laziness and groupthink”

Journalism has been called “the first rough draft of history,” and for the American Recovery and Reinvestment Act that draft was indeed rough. I asked Michael Grunwald about that in our email interview this week:

NCB: The New New Deal reflects far more in-depth research than most political reporting. How long did you spend researching the book, and how did you do your research?

MG: Thanks for your kind words. I spent about two years researching and writing the book. I live in the public policy paradise of South Beach, so I had to do a lot of travel to D.C. and around the country to do interviews and site visits. I ended up interviewing more than 400 people, including just about everyone in the administration who was involved with the stimulus except for the president. Vice President Biden also let me sit in on a couple Cabinet meetings, and I tracked down a whole bunch of documents.

NCB: Your book could have been subtitled “The Greatest Story Never Told,” and in it you mention one reason the media didn’t cover American Recovery and Reinvestment Act stories well: the media focus more on problems, less on policies that solve problems, and even less on policies that prevent problems. As Democrats are more likely to say government can help solve and prevent problems, while Republicans focus on the problems of government itself, does this negativity bias in political reporting work out in practice to a bias in favor of Republicans?

MG: That’s an interesting thought. I’d say the media’s main bias is towards laziness and groupthink; obviously there wasn’t a lot of negativity bias when President Bush did that Mission Accomplished thing in the flight suit. And I think it’s appropriate that the media should keep a skeptical eye on the government. But when it came to the stimulus the conventional wisdom that this thing was an $800 billion joke just seemed to overwhelm all sense of proportion and common sense. Washington political reporters in particular are deeply uninterested in public policy, which isn’t necessarily a partisan bias.

NCB: Your book also details a Republican strategy – both while the ARRA was being debated and during its implication – of repeating more lies more often and more persistently than media fact-checkers could respond. Given the inherent difficulties and limits of fact-checking, are we becoming a nation where elections can be won or lost, and major policies implemented or blocked, based on calculated lies?

MG: Yes. Although I’m not entirely sure how new that phenomenon is. Remember: FDR campaigned in 1932 on a balanced budget.

NCB: A recent Jay Rosen Press Think article explores the media ethic of savviness: a focus on whether a rhetorical gambit succeeds, regardless of its truth and indeed more impressively if it is untrue, akin to admiring a successful bluff in poker. Do you think media admiration for the savviness of the GOP attacks on the ARRA has played into a reluctance to publicize the successes your book documents?

MG: Maybe a little. I think the savvy bias tends to apply more towards political campaigns. When it comes to policy the Republican gambits were really savvy! I’d say that reluctance boils down to four factors: the relentless Republican campaign of distortion; the Democratic tendency to quibble (too small, too many tax cuts, etc) rather than defend the stimulus; the media’s unwillingness to adjudicate the truth (especially when both sides were basically saying it was a mess); and, perhaps most important, the inherent problem of trying to sell a jobs bill when jobs were disappearing.

I share Grunwald’s conclusion about that last point. While titled the American Recovery and Reinvestment Act, we saw Thursday that long-term projects (reinvestment) still had to pass the Three Ts test of boosting consumer demand (recovery). The ARRA was drafted and discussed as a jobs bill, and that made it hard to defend in the spring and summer of 2009 when our economy continued to hemorrhage jobs.

Many of us had not yet gazed into the abyss of a Second Great Depression, what Grunwald calls “our ‘Holy S**t!’ moment.” Indeed many still haven’t. The Second Great Depression did not happen, and it’s hard to appreciate how narrowly we averted it, and how much worse our lives would have been.

Many also expected, or hoped, that the ARRA would have an immediate effect. The bill passed in February 2009, yet over 600,000 Americans lost their jobs in March and over a half-million more in April. Job losses began to drop in May, as stimulus money began to flow through the system, and by December 2009 job growth had returned. Yet that had left nine months for “the first rough draft of history” to be of the ARRA as a failure, and by then “laziness and groupthink” had taken hold.

Not “Will it work?” but “Will it matter?”

As the Department of Energy’s new research program ARPA-E weighed grant proposals, reviewers were told to ask not “Will it work?” but “Will it matter?” That is, their mission was not to fund research projects that offered only marginal boosts to existing technology. Their mission was to fund big ideas that could transform energy production and usage … research that would matter.

That is also a good metaphor for the entire Recovery and Reinvestment Act, and for President Obama’s promise of “Change We Can Believe In.” In the 2008 campaign he outlined the four pillars of what he has called a New Foundation – energy, education, health care, and an economy built on community – and I also asked Grunwald about that legacy:

NCB: You document an impressive list of ARRA successes toward building a sustainable 21st century nation, yet some could still be undone if Republicans cut their community support. Which of the ARRA’s successes do you think would be most vulnerable under a Romney administration with a Republican Congress?

MG: High speed rail, advanced battery factories for electric vehicles, renewable electricity projects, non-farm biofuels projects, refundable tax cuts for the working poor, unemployment insurance modernization.

That is a frightening list, and I would add the Affordable Care Act as well. All of those are at stake in November, as is Republicans’ eagerness for a war with Iran.

Yet consider if President Obama and Democrats win in November. Romney has promised he’ll create 12 million jobs in his first term, but in fact that’s what economic analysts expect to happen anyway over the next four years. Some of those jobs will have roots in the ARRA, and if President Obama is still in office he and Democrats will justly get the credit. The 2016 election would thus be about whether to continue the successes begun under President Obama and Democrats. If he and the Democratic nominee make that case well, we could well see Democrats hold the White House for at least three consecutive terms …

… and that has happened only twice in the past 80 years: with Presidents Roosevelt and Truman from 1932-1952, and then with Presidents Reagan and George H.W. Bush from 1980-1992. Each of those three-in-a-row wins transformed our political dialogue for an entire generation.

President Obama and Democrats made the ARRA law. President Obama and Democrats made the ARRA work. For the next 58 days, we must work to make the ARRA matter.

(Crossposted from Blogistan Polytechnic Institute (

The New New Deal, Part II: Making It Work

Friday, September 7th, 2012

(By NCrissie B)

This week I’ve been discussing Michael Grunwald’s The New New Deal: The Hidden Story of Change in the Obama Era. First, we saw the challenges of drafting and passing the American Recovery and Reinvestment Act. Today we look at the challenges of making the stimulus bill work. Next, I’ll interview Michael Grunwald and see how the ARRA’s successes became ‘The Greatest Story Never Told’ … until now.

Michael Grunwald is a senior national correspondent for Time magazine. Before joining Time, Grunwald was a congressional correspondent, New York bureau chief, and investigative reporter for the Washington Post, and a local and national reporter at the Boston Globe. He has received the George Polk Award for national reporting, the Worth Bingham Prize for investigative reporting, the Society of Environmental Journalists award for in-depth reporting, and numerous other journalism awards.

A $10,000 shopping list and a 10-cent stick of gum

Imagine sending someone to out prepare your home or business for an approaching Category 5 hurricane. You give them a shopping list and $10,000, with instructions to buy only necessities. At the end of the day, they return with $9,999.90 in hurricane supplies – enough to minimize the storm’s damage – and one 10-cent stick of gum.

In economic terms, the 2008 meltdown was a Category 5 hurricane. In the fourth quarter of 2008, the economy was collapsing at an annual rate of 6.3%. The downturn was already underway in January of 2008, and between September 2008 and August 2009 over 5,131,000 Americans lost their jobs. But this was no act of nature. As we discussed earlier this month the collapse was a man-made disaster caused by blind faith in an economic myth, and outright financial looting.

The American Recovery and Reinvestment Act was a $770 billion shopping list to minimize the damage from that disaster. Grunwald reports that economists, using data from other large government and corporate projects, expected about 5% to be lost in fraud. Instead auditors found only $7.2 million in fraudulent claims. That’s 0.001% … one 10-cent stick of gum from a $10,000 shopping list.

Transparency at work

That astonishingly tiny level of fraud was due, in part, to President Obama’s commitment to transparency. The Recovery Act website, online immediately after the landmark bill was enacted, details every project funded by the ARRA, and every grant and contract awarded. President Obama assigned Vice President Joe Biden monitor the ARRA, and Grunwald reports that the Recovery Oversight Board used state-of-the-art software to not only detect fraud but to identify and preempt likely offenders before they got their hands in the till.

The transparency came with a price, Grunwald reports. With so much data being made public, media watchdogs made hay with “Gotcha!” stories like contracts and grants going to non-existent congressional districts. Those were, of course, typos made by clerks hurrying to post data in almost real-time as reports arrived at the oversight offices. Grunwald cites stories grousing that too many weatherproofing grants were going to hot-weather climates and – weeks later, by the same reporters – that too many weatherproofing grants were going to cold-weather climates.

Prompted by the lure of being the next Woodward or Bernstein, in a media culture focused on government failure, fed by often outlandish Republican claims, Grunwald writes that thousands of reporters began acting as special prosecutors. Fraud that didn’t happen, and grants and contracts for projects that made sense and were done on time and within budget, were as interesting to report and as likely to make headlines as stories about planes that land safely and pets that don’t get lost.

Yet even the incessant, exaggerated, and often false stories about fraud had a silver lining. With so much data so so public, being picked over by so many, fraudsters may have stayed away. As an Oversight Board member told Grunwald, “It would be stupid to try to scam here.”

Change You Can Believe In

The “Recovery” part of the ARRA could not stop the economic hurricane, and Republicans have made hay on President Obama’s over-optimistic prediction that the bill would hold unemployment under 8%. In fact, unemployment was passing that mark when he made that prediction, although the horrific January-March data wouldn’t reveal that for several weeks. Still, the Congressional Budget Office and other independent analysts estimate that Recovery Act projects created or saved at least 2,300,000 jobs. Despite the unemployment and increase in poverty, homelessness actually declined during the Great Recession, due to Recovery Act projects like the Homeless Prevention and Rapid Re-Housing Program Recovery Plan. A 2010 First Focus report found that the Recovery Act provided “a lifeline for low-income families” whose children might otherwise have gone hungry.

Beyond simply easing the pain, the “Reinvestment” part of the ARRA laid the groundwork for a sustainable, 21st Century economy. Grunwald reports countless examples of “Change You Can Believe In,” including:

  • The world’s largest wind farm is now being built in Oregon, primarily with American-made components.
  • Total U.S. wind power generation went from 25 gigawatts in 2008 to 50 gigawatts in 2012, a level forecasters said we would not reach for decades.
  • Weatherproofing programs have saved the equivalent of 21 coal-fired power plants in energy.
  • The U.S. solar energy industry went from “death’s door” in 2008 to a net exporter in 2012.
  • Advanced biofuel companies can now create jet fuel from algae, with minimal CO2 emissions.
  • Programs underway to reach zero-net energy consumption within 20 years in office complexes, malls, government buildings, and military bases.
  • Total U.S. CO2 emissions are now 20% lower than in 1994.
  • Many parts of the U.S. now have a long-needed “smart grid” that provides real-time monitoring of electricity production, transmission, and usage, to reduce our energy needs and prevent and minimize blackouts.

And that’s just in energy. The Reinvestment Act has also destroyed hundreds of obsolete dams, renovated thousands of roads, bridges, tunnels, and utility lines, helped to modernize schools, brought broadband internet access to millions of businesses and families, computerized millions of health records, and funded research comparing the effectiveness of prescription drugs, surgeries, and other treatment options.

That “Change We Can Believe In” is already happening, improving our lives and our grandchildren’s futures, even as we struggle with the lingering damage caused by the Great Recession. And, contrary to Republican claims, President Obama has limited federal spending better than any president since Dwight D. Eisenhower.

That’s a very big, very effective shopping list … and next we’ll discuss with Michael Grunwald why the media narrative has been all about that one piece of gum.

(Crossposted from Blogistan Polytechnic Institute (


The New New Deal, Part I: Making It Law

Sunday, September 2nd, 2012

(By NCrissie B)

This week I’m discussing Michael Grunwald’s The New New Deal: The Hidden Story of Change in the Obama Era. Today I look at the challenges of drafting and passing the American Recovery and Reinvestment Act. Tomorrow I’ll examine the challenges of making the stimulus bill work. Finally, I’llinterview Michael Grunwald and see how the ARRA’s successes became ‘The Greatest Story Never Told’ … until now.

Michael Grunwald is a senior national correspondent for Time magazine. Before joining Time, Grunwald was a congressional correspondent, New York bureau chief, and investigative reporter for the Washington Post, and a local and national reporter at the Boston Globe. He has received the George Polk Award for national reporting, the Worth Bingham Prize for investigative reporting, the Society of Environmental Journalists award for in-depth reporting, and numerous other journalism awards.

Four Pillars

Barack Obama was elected during the worst economic crisis since the Great Depression. Several of the nation’s oldest banks had collapsed. The stock market had plummeted. Lenders weren’t lending. Consumers weren’t consuming. Millions had already lost their jobs, and millions more soon would. Economist and Obama transition team member Christina Romer put it bluntly: “Depressions really, really suck.” Yet although most Americans knew the economy was bad, almost no one knew how bad it was. In December of 2008, we had not yet had what Grunwald calls “our ‘Holy s**t!’ moment.”

President-elect Obama and his transition team knew their first priority would have to be patching the gaping holes in a leaking economy. Yet he had campaigned on “Change We Can Believe In,” and he meant to keep the four pillars of that promise:

  • Green Energy – In his first policy speech in 2007, Candidate Obama said “The country that faced down the tyranny of fascism and communism is now called to challenge the tyranny of oil. The very resource that has fueled our way of life over the last 100 years now threatens to destroy it if our generation does not act now and act boldly.” The last phrase quoted FDR’s ‘Arsenal of Democracy’ speech, and just as the humming factories of World War II had lifted the U.S. from the Great Depression, President-Elect Obama believed green energy initiatives could help lift us from the Great Recession
  • Health Care – Candidate Obama saw health care as both a moral crisis and an economic crisis. Health care spending was one-sixth of our economy and on pace to be one-third by 2040, yet our life expectancy and infant morality outcomes were mediocre. Insurance costs squeezed businesses and workers, and rescission and cancellation often turned illness into bankruptcy. Research focused on individual drugs or treatments, tested against placebos, with almost no comparative data on whether a new drug or treatment was better than those already available. Reforming health care, the president-elect believed, was essential to economic recovery.
  • Education – Candidate Obama had attended a prep school in Hawaii and Ivy League universities, yet in Chicago he saw struggling schools that offered excuses instead of excellence: “these kids can’t learn” because gangs-drugs-parents-the-system. President-elect Obama saw “these kids” as “our kids” and was determined to provide schools that gave them a chance to thrive.
  • Community – Energy, health care, and education were all part of our national economic crisis, but Candidate Obama saw a deeper problem: the fraying of our sense of community. “I am my brother’s keeper. I am my sister’s keeper,” he said. While he recognized the productivity of market economies, he also recognized a role and a duty for government. New investment in infrastructure, from roads to rails to electricity to broadband connectivity, would both grow the economy and rebuild a shared sense of purpose.

These were the four pillars of change on which Candidate Obama had campaigned, and President-Elect Obama wanted his economic recovery plan to address all four.

Three Ts

But first that plan would have to prevent a Second Great Depression, and most economists agreed on how to do that. Triggered by a banking crisis, the economy now faced a death spiral. Families who had lost or feared losing their jobs were spending less, providing less revenue for businesses, forcing them to lay off more workers. With more workers unemployed and more businesses closing, tax revenues plummeted at the very time people needed more community support, leaving governments – federal, state, and local – with budget crises that could force yet more layoffs.

Both struggling families and struggling state and local governments had to balance their budgets. That left the federal government as “the spender of last resort,” the only economic actor that could intervene to stop the death spiral. But just spending money would not be enough. Larry Summers and other economists had studied government stimulus efforts in the U.S., Japan, and elsewhere, and identified three conditions for success:

  • Targeted – Government spending had to boost consumer spending in order to boost business revenues, end layoffs, and spur new hiring. Data showed that during an economic downturn, family spending decreased as a percentage of income for wealthier families. Simply, they could afford to save or pay down debt, while median- and lower-income families had to scramble to get by from month-to-month. Thus, jobs for the unemployed and assistance for the working poor would boost consumer spending more and end the death spiral sooner than tax cuts or credits for the wealthy.
  • Timely – Government spending also had to happen at the right time: before the bottom fell out of the economy and left any stimulus futile, and before consumer demand began to recover and left any stimulus likely to spur a burst of inflation.
  • Temporary – Thus government spending programs that were intended solely as stimulus needed to stop when consumer demand recovered. Ideally that meant built-in end triggers. Unemployment benefits end automatically when a worker gets a job, and assistance for the working poor tapers as they find jobs that pay better wages. Startup loans help innovative, risky, yet potentially transformative new companies get through ‘The Valley of Death’ until private capital and sales revenues make them self-supporting.

The Obama transition team agreed on the Three Ts, both in principle and in most of the details. There were a few quibbles, but the larger problem was how to find enough targeted, timely, temporary projects to fill out the $500-750 billion package most economists predicted would be needed to forestall a depression and create a recovery.

Sixty Votes

When the Obama transition team took that number to Capitol Hill, jaws dropped. House Speaker Nancy Pelosi had been considering a stimulus package of just $300 billion. President-Elect Obama was asking for more than twice that, on the heels of the $700 billion TARP program just rushed through to prop up the financial industry. Passing that had been fractious enough, and its failure to pass on the first vote had pushed the markets even further into crisis. The 2008 elections had given her a larger majority, but $750 billion was still a lot of money.

And then there was the Senate, where Democrats had only 58 seats, with Minnesota’s Al Franken was still locked in a recount. Without at least two Senate Republicans – really three, so no one could be pilloried by the Senate Republican Caucus as “the deciding vote” – no bill would pass. That assumed the new president could get every Senate Democrat to agree, including fiscal conservatives like Nebraska’s Ben Nelson. Indeed no one was sure whether Democratic stalwart Ted Kennedy, who had collapsed at the president’s inauguration, would be able to return to cast a vote.

As the economic news grew ever more grim in January, with new data showing a Second Great Depression was nearer than anyone had imagined, the ‘ideal’ size for a stimulus bill grew to over $1 trillion. But in the Senate, both the few Republicans whom the president had any hope of swaying and the conservative Democrats whose votes he could not lose, the number was “under $800 billion.” Grunwald reports that number was based not on data but emotion and the echoes of the TARP bailout.

Even had Congress been willing to reach for $1 trillion, Grunwald writes, there remained the problem of meeting the three Ts. There were plenty of ideas for how to spend money, but not enough would be targeted, timely, or temporary enough to work as depression-sparing stimulus. As one Hill staffer put it, “We can’t stuff that much pig through the python that fast.”

The American Recovery and Reinvestment Act did pass. Republicans denounced it as waste and cronyism, even as many progressives complained it was not enough. It was not waste, not cronyism, and not enough … but Grunwald doubts any bigger package could have met President Obama’s four pillars, Treasury Secretary Summers three Ts, and found 60 votes in the Senate.

And as we’ll see in my next post … it did work.

(Crossposted from Blogistan Polytechnic Institute (