Political Winds: Stimulus, Pelosi, Jindal

The stimulus bill has apparently been agreed to by both chambers of Congress and should be passed this week for President Obama’s signature. The program isn’t perfect (they never are), but for its size, it was developed expeditiously. The new Administration can view that as a victory, and it will stand to benefit from perceptions of its effectiveness – which of course requires that it has some positive impact. On that point, the Congressional Budget Office (CBO) estimates that the plan will add 1.2 to 3.6 million jobs, and increase GDP by 1.1-3.3%. Not bad, but keep in mind that GDP is now expected to contract by over 4% in the first quarter of 2009, and much of the stimulus in this bill won’t kick in right away. It’s still going to be a long, tough haul, and in our view, without fundamental tax reform and long term USD stability, the happy days, when they return, will be a tad more doleful, and a bit less gleeful.

The stimulus bill can also be seen as a victory for the Senate. It’s reported (by CNN and NY Times, via US News and World Report’s Political Bulletin) that House Leader Pelosi was ticked off by an allegedly premature announcement of an agreement on the bill by Sen Reid. We pointed out that President Obama could have his hands full with House Dems – it remains to be seen whether he’s brought them to heel, or whether they’ll demand their pounds of flesh in the sessions ahead.

Finally, AP (also via US News and World Report Political Bulletin) reported that Louisiana Governor Bobby Jindal will deliver the GOP’s counter point to President Obama’s first speech to Congress on 2/24. Cynics might argue that Jindal’s selection, along with the election of Michael Steele to head the GOP, is evidence of a strategy to present candidates who are more richly tinted than, say, Dick Cheney. But Jindal is a very competent and popular governor, as well as a charismatic speaker  – for a Republican, anyways. If nominated for the presidency in 2012, would he be a strong enough match for Obama? We think that would only happen if the new President’s political capital has suffered significantly via economic malaise (which could well happen, as it did with President Carter) and/or some other significant and unexpected development(s). Otherwise, Obama will be a tough match for the GOP in 2012.