Wednesday, January 28, 2009

Major milestone for stimulus bill

Although the final stimulus package will inevitably be somewhat different from the bill just passed by the House, the vote was still a major milestone. It would have been nice to have them vote on something much closer to the final bill, but this is the way things are typically done in Washington, despite President Obama's call for "change." The Democrats got to vote for their vision of the package and the Republicans got to vote against it.

The Senate bill, still not in its final form, will likely be larger than the House bill and garner at least a modest level of bipartisan support. It sounds as if the Senate will vote next week.

Then, we will have two very versions of the same basic bill. A conference committee will be appointed, back-room negotiations will occur, and deals and changes will be made, enough to get some semblance of bipartisan support in the conference committee. The final bill could have major differences. It may seem odd that the conference committee can essentially rewrite the entire bill to its liking, but that is the way the process works. The actual conference committee members are carefully chosen by the congressional leadship of each party, so the members can be expected to deliver whatever the leadersip negotiates. Overall, the final bill will likely follow the rough contours of the original proposal(s), not identical, but close enough that the average American might not notice the differences, other than a significantly higher price tag.

Then, that final bill will go to the President to sign.

Despite a lot of negative media headlines, the process is actually going amazingly well and on a great schedule. There should not be any major obstacles to getting the bill passed before the end of the second week of February.

Then, the really big debate begins: how soon will money actually flow into the economy and actually show up in the economic reports.

A somewhat longer debate will be how soon we will actually see jobs created, and then how soon the net created jobs begin to exceed losses.

-- Jack Krupansky

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