The Stimulus Pawn

The Republican price for a stimulus bill remains too high. The economy may or may not still need a boost. Some say there are already signs of recovery, others not, or that the recovery will likely be drawn-out and weak. But even if that's the case, in our view the country would be better off without a bill than with the kind on which the President and too many congressional Republicans continue to insist.

They appear to have given ground on unemployment benefits. They would use federal funds not just to extend the benefits of those who exhaust the basic 13 weeks, as has been done in other recent recessions, but to increase somewhat both the amount of benefits and the number of workers eligible for them, both of which are low. That's all to the good.

In return, however, they still want to advance the effective dates of some of the tax cuts Congress passed but, for reasons of cost, deferred last spring. The better course would be to repeal them. The sponsors would speed up fewer than the President first proposed. Even so, most of the benefit would go to the better-off, who are as likely to save as to spend it, and most of even that payout would not occur until after next year, when the expectation is that the economy will already have begun to recover.

Likewise, many still want to reduce if not repeal the alternative minimum corporate income tax, a requirement that profitable corporations pay a minimum amount no matter how gifted their tax lawyers may be. If anything, that should be strengthened. A third issue is how to help the unemployed maintain their health insurance. That hasn't been done much in the past, and ought to be, but how? Democrats would provide chits to help the unemployed maintain their prior employer-sponsored insurance, while giving grants to the states to extend Medicaid to those who lack such coverage. They would also give the states temporary grants to offset state budget cuts that would otherwise occur.

Republicans instead want to offer the unemployed tax credits to offset the cost of whatever stopgap insurance they may choose to buy. Their goal is not just to stimulate the economy or bind up the wounds of recession but, as they themselves acknowledge, to bump the entire health care system in the direction of such credits. That's a huge change about which serious questions have been raised, including its likely deleterious effect on the current system of employer-paid coverage. The stimulus bill ought not be an instrument of, nor hostage to, such experimentation.

The administration and Republican congressional leaders threaten to blame the Democrats if no stimulus bill passes and the economy is still weak as next year's elections approach. The Democrats should not be cowed. On this one, they've mainly pushed in the right direction. The Republicans, far more than they, have tried to use this bill for extraneous purposes, and ought to be called on it.