In a move that will surprise exactly nobody, the Senate Budget Committee ranking member Jeff Sessions has signaled that "Republicans would oppose the jobs plan President Obama is expected to announce Thursday, saying it would only put the United States further in debt at a time when the debt is already weighing on the economy." So while nobody even knows yet just what the full presidential proposal to create "millions of jobs" looks like in its entirety, we do already know it will almost certainly not happen courtesy of a republican controlled congress. As a reminder, the US is currently supposed to be laboring under a regime of austerity (more in its latest, and vastly watered down Italian iteration than real cost cutting but still) and thus it will be rather complicated for the GOP to explain why the party is cutting with one hand and spending more with the other. As such, any hopes for a quick and decisive passage of laws to build more bridges to nowhere are about to be dashed. From The Hill: "There’s no doubt in my mind that the debt that we’ve now incurred is already weakening our economy,” Sessions said on the Senate floor. “It comes to a point that you can’t keep borrowing in a futile attempt to stimulate the economy when the increased debt itself is weakening the economy.” Cue Keynesians of all shapes and sizes kicking and screaming how more stimulus this time will be different and how one last Heroin injection is really all it takes.
From The Hill:
Sessions read one press report on the Senate floor that said Obama could propose as much as $300 billion in new spending in his Thursday night address to a joint session of Congress. According to that report, Obama is expected to propose extending payroll tax cuts for another year, and extending expiring jobless benefits. Those two measures combined will cost $170 billion.
He may also propose a tax credit for companies to hire unemployed workers, costing $30 billion, and a public works program that is expected to cost at least $50 billion for such items as school construction.
Other reports say Obama's total proposals could total less than $300 billion, with some putting the number at $200 billion.
There is still, however, some hope: cut and spend.
Regardless, Sessions indicated Republicans will oppose any new spending plan that is not offset by spending cuts. The senator noted that while Obama has talked about the need to reduce federal spending, Obama is not expected to describe how to pay for these new programs in his Thursday speech.
If the debt ceiling debate highlighted, it is that the US population is no longer that stupid to realize that $2.4 trillion in deficit spending now, offset by $100 billion in cuts in the next 9 years and about $2.3 trillion in the final year, makes absolutely no sense.
Yet unfortunately this is what will likely end up happening. The final outcome will be that between this, and the next 10 or so fiscal stimulus programs, all of which will fail, will be to back-end load about $100 trillion in spending cuts in 2020, a year when the government will probably collect one 50th of this in revenue.
At some point someone will ask how this makes any logical sense.
But not yet.
For now, look for much more posturing both tomorrow, and in two weeks, when the "transitory" $14.69 trillion debt ceiling is breached about half a month ahead of schedule.