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PEBO: Stimulus Package Won't Be As Big As Some Economists Want Because of Concerns About Deficits
January 07, 2009 12:19 PM
"Today the Congressional Budget Office announced that the deficit we are inheriting for this budget year will be $1.2 trillion," President-elect Obama said today, noting that the stimulus package "will necessarily add more."
Even after our economy "pulls out of its slide," the President-elect warned, "trillion dollar deficits will be a reality for years to come. But as I said yesterday, our problem is not just a deficit of dollars. It’s a deficit of accountability... a deficit of trust. So change and reform can’t just be election-year slogans. They must become fundamental principles of government."
With that the President-elect introduced his choice to head a new position in the White House, the Chief Performance Officer. Former Treasury Department official Nancy Killefer, currently Senior Director in McKinsey & Company's Washington, D.C. office, will work with Obama's Cabinet and others "to discuss how they can run their agencies with greater efficiency, transparency and accountability."
With that, the President-elect took a few questions. One, from the Wall Street Journal, noted that "the real key to controlling federal spending lies with the entitlement programs. How early do you plan on addressing Medicare and Social Security? And what will your approach be?" The President-elect said that "we are beginning consultations with members of Congress around how we expect to approach the deficit. We expect that discussion around entitlements will be a part, a central part, of those plans."
Mr. Obama was asked if his silence about Gaza because of his "one president at a time" mantra. "We can't have two administrations running foreign policy at the same time," Mr. Obama said. "We cannot be sending a message to the world that there are two different administrations conducting foreign policy. That is not safe for the American people." Asked if he was worried that the Palestinians are interpreting his silence negatively, Mr. Obama said, "I can't control how people interpret what I'm saying."
Asked whether Roland Burris should be seated in the Senate as the junior Senator from Illinois, the President-elect said, "that is a Senate matter. But I know Roland Burris. ... I think he's a fine public servant. If he gets seated, then I'm going to work with Roland Burris just like I worked with all the other senators to make sure that the people of Illinois and the people of the country are served."
I got a chance to ask him about the stimulus package. Here's that exchange:
TAPPER: Thank you, Mr. President-elect. Welcome to Washington.
OBAMA: Oh, yeah. It's great to be here. (LAUGHTER)
TAPPER: Your team has talked about the stimulus package being $675 billion to $775 billion. But at the same time, you have distributed a memo -- your team has distributed a memo in which economists say it should be between $8 billion -- I'm sorry -- $800 billion and $1.3 trillion.
OBAMA: Right.
TAPPER: How do you reconcile that difference? And, also, could you explain what you consider to be truly stimulative? I mean, any project will create jobs in the short term.
OBAMA: Well, we are still in consultation with members of Congress about the final size of the package. We expect that it will be on the high end of our estimates, but will not -- will not be as high as some economists have recommended, because of the constraints and concerns we have about the existing deficit.
In terms of the components of the package, as I've made clear over the last several days, we're going to have a (sic) investment component designed to create or save 3 million new jobs. Part of what the charge of my team has been is to figure out how can we make sure that even as we're creating short-term jobs and spurring demand in the economy that we're also laying the groundwork for long-term economic growth, which is why a lot of the stimulative -- a lot of the investments are going to be around things like energy, health care, education, things that we need to be doing anyway.
Part of the stimulus package will be to provide tax relief to middle-income families, and, where it makes sense and is going to work, to provide some tax relief to businesses to spur on investment in the private sector. And part of the package is going to be to help states who are under extraordinary budget pressures to prevent them from laying off more workers in vital service areas like teaching, law enforcement and so forth, so that not only are we saving jobs, we're also making sure that states are able to provide basic services to their citizens at a time of critical need. In terms of what I consider appropriate stimulus, you know, the criteria that we've tried to lay out is, are we able to use this money wisely, effectively, in a two-year time span so that we're not creating long-term obligations that would add to the structural deficit that exists, but would provide an immediate boost to the economy?
And as I indicated yesterday, one of the things that I think is important is that we do not have earmarks in this package. You know, I've said before I think it's entirely appropriate for members of Congress to want to have some say in terms of projects that take place in their district. Many of the projects that they might advocate for are worthy. But isn't the place to do it. And so I think it's important for us not to have earmarks here. It's important for us to have transparency in how the money is spent. I intend to make sure that we have unprecedented measures to ensure that taxpayers can keep track of how this money is spent.
So if, you know, we can get this done quickly, then I've -- I have confidence that not only are we going to be able to create jobs, but we're also going to be making a down payment on some critical areas that, as the economy recovers and the private sector starts investing again, we're going to see some long-term benefits and long- term savings.
I'll just take one example. Part of our stimulus package is going to involve revamping all federal buildings so that they're energy efficient. If we -- if we do that effectively then over the long-term we are going to save billions of dollars in energy costs for the federal government and for taxpayers. That's the kind of charge that Nancy's going to have, is identifying where are areas where we can make big change that lasts beyond the economic recovery plan and will save taxpayer money over the long term.
-- jpt
January 7, 2009 | Permalink | Share | User Comments (199)
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Get over it CW. Obama isn't appointing the same people John McCain would have appointed if he had won. Remember how huffy you were about Obama’s “lack of experience” – now he hires people with experience from the previous Democratic administration and you’re all indignant.
Posted by: CaliRules | Jan 7, 2009 5:56:41 PM
I just read a report on another network that says that THE PORN INDUSTRY WILL ASK
CONGRESS FOR A BAILOUT..!!!! No joke here. Look it up.!!!!
Posted by: CW | Jan 7, 2009 5:48:24 PM
Congress approval rating WORSE than BUSH..
Pelosi, Harry Reid, Barney Frank and company GO HOME...!!!!
Posted by: CW | Jan 7, 2009 5:37:48 PM
Obama supporters did you know you were actually voting for the Clintons.???
It is hard to give Obama credibility when all his appointments have been people who served under bill Clinton. today he announced the Chief Performance Officer. Nancy killefed. She was a Treassury dept. official under Clinton. Dr.Gupta was an advisor to Hillary Clinton 1997-1998. Leon Panetta, Bill Clinton's Chief of Staff. CHANGE??...WHAT CHANGE..??
Posted by: CW | Jan 7, 2009 5:33:27 PM
LEFTY IN TEXAS, three wars??? Iraq was his fault but Afgahnistan??? Give me a break, and do you count "The war on terror as a war?? We should just lie down and do nothing right?? Kind of like you dem run congress.
Posted by: Ryan | Jan 7, 2009 5:23:51 PM
My bad with the grammar.
Posted by: Ryan | Jan 7, 2009 5:21:43 PM
So during the election why didn't he talk down do much Will? It was all hope and change and Bush and change. You guys are pathetic. Enjoy the power why you have it. By 2012 you'll be long gone.
Posted by: Ryan | Jan 7, 2009 5:21:03 PM
A 1.2 trillion dollar budget deficit, 3 wars, companies folding up right and left, and millions out of work. Thank you Mr. Bush. You did a fine job. We sure will miss you....NOT! ONLY 13 DAYS LEFT! What else can you screw up during that time you have left?
Posted by: leftyintexas | Jan 7, 2009 5:19:26 PM
Welostintegrity: Although W has warned about fannie and freddie, it was probably too late to save it from collapse. The fact is : W endorsed home ownership by pressing fannie to fund by means of subprime mortgage. During the Clinton administration, at least two of his cabinet members, Bob Ruben and Henry Cisneros have relaxed the restrictions on the subprime lending, thus increasing the scale of crisis today.
Posted by: austin | Jan 7, 2009 5:18:04 PM
I don't want to hear this crap about this huge stimulus being Bush's fault. This is Obama and his responsibility. This economy has been coming on for decades but each one takes responsibility for his reaction to it.The causes are at least 4 decades old and brought on by a host of decisions, the chief one being good old American Greed. This Stimulus along with previous bailouts is staggering. I'm thinking we are going to far on this one judging by how little positve effect the other programs have had.
Posted by: richard warren | Jan 7, 2009 5:15:06 PM
Belle Starr says, “Some entities are so foul they can't BE fixed, and HUD is one of them”. Interesting – some say the same about the CIA – it should be dismantled and its parts assigned to functioning organizations. For example the clandestine service should be placed under the control of the U.S. military, domestic CIA activities under the FBI, and embassy functions under the State Department. Word is that’s why Obama has nominated Panetta - he has no espionage experience, but he has the only qualification he needs: the ability to bring the power of the presidency to bear. Damn those liberals for planning to reduce the size of government.
Posted by: idahogirl | Jan 7, 2009 5:12:32 PM
George W. Bush added more to the deficit than ALL 42 PRESIDENTS BEFORE HIM COMBINED. You cannot hide from this fact.
Posted by: William J. LePetomane | Jan 7, 2009 5:11:31 PM
Ryan: that is called being responsible and adjusting to a very fluid situation. Unlike Bush who was never wrong about anything.
Posted by: William J. LePetomane | Jan 7, 2009 5:10:11 PM
I love how Obama is already lowering expectations. What a fraud.
Posted by: Ryan | Jan 7, 2009 5:07:07 PM
It was widely reported yesterday that George W. Bush added more to the national deficit during his administration THAN ALL PREVIOUS PRESIDENTS COMBINED! Great. Thanks, George. Don't let the door hit you on your way out.
Posted by: William J. LePetomane | Jan 7, 2009 5:03:08 PM
Pump up that scary hate! Oooooo police state! Ooooo gays! OOOooo riots in the streets! There HAS to be a conspiracy theory for why Obama was elected because NO WAY he’d have been elected otherwise after 8 glorious debt free happy years under George Bush. LOL
Posted by: CaliRules | Jan 7, 2009 5:01:48 PM
"The most unnerving aspects about the punitive liberals is their intolerance for dissent and their willingness to censor and otherwise suppress their opponents."
This was completely apparent during the primaries and the election. However, actual "liberals" don't DO that. The "Obama" organization is NOT liberal, but authoritarian. They're soft authoritarians, though: can't stand conflict, because they can't debate or think on their feet. So give 'em LOTs of talk-back and debate, kiddies.
But DON'T do it at the organization's own website, unless you want to change your residence and phone in an attempt to elude online unpleasantness AND administrative/bureaucratic retaliation. Do it ANYwhere but there (or huffingtonpost, which is almost the same thing).
Posted by: Belle Starr | Jan 7, 2009 4:51:44 PM
Incredible, The MSM is not reporting about the fact there are more ballots than registered voters in Minnesota
Posted by: welostintegrity | Jan 7, 2009 4:47:31 PM
South Texan – surely you must be aware that not all economists believe in continuing Republican Supply Side economic policies. That does not mean implementing an alternative solution will turn our country into the USSR. Back in 2001, the Republican solution for the dot.com bubble bust was a huge tax break for the richest + an interest rate cut in hopes it would promote investment and jobs. Unfortunately, “Trickle Down” economics did not. Well, at least in the US; companies were encouraged to send their jobs overseas instead.
Along with other economists, Nouriel Roubini believes it’s time for a shot in the arm to prevent the looming 4-year recession from turning into a systemic meltdown and a decade long global economic Depression. Remember from your history class how programs like the WPA and the GI Bill gave America financial returns by building good jobs and optimism?
Posted by: idahogirl | Jan 7, 2009 4:46:57 PM
"We have the ever-articulate and knowledgeable Barney Franks (remember in 1989 was found running a gay prostitution ring out of his DC house? Google it.) telling us how to spend the trillion dollar bailout plan money."
Obama's tossed His base, except for the "gay" movement organized by "post-partisan" corporados (Mary Cheney et al.) ahead of his supposed "grassroots" organizing.
The idea that anybody'd PAY to be intimate with Frank, however, is what's TRULY frightening. Or was he the madam?
Posted by: Belle Starr | Jan 7, 2009 4:44:53 PM
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