The New Stimulus: Inauguration Day…Economic Team:Melody Barnes to lead on policy…


UPDATE: 12:15PM EST: The President-Elect has named Melody Barnes, of the Center for American Progress, the head of his policy council (happy dance). Ms. Barnes did a column in WaPo 2 years ago reflecting upon what a truly progressive POTUS might say at a SOTU address, it is well worth a look for some insight into the future direction of our policy:

….The sad fact is that one of our most cherished values as a society, namely equality of opportunity, is fading as a reality for far too many people. Economists have shown that a child born into a lower-income family has only a 1 percent chance of making it to the top of the income distribution, while children from prosperous families have a 22 percent chance. To restore fairness to our system, I will embark on a multi-faceted approach including increasing our investment in public education, promoting genuine health care reform, and backing a higher minimum wage.

Domestically, no need is more urgent than fixing our broken health care systemWe must guarantee affordable coverage for all Americans. At the same time, we must also overhaul our health care system so that we make wellness and disease prevention a national priority. The Wellness Trust will create incentives for health care providers, employers, schools and individuals to focus on prevention, and preventative care will be available to people outside of a doctor’s office. Preventive services will be covered whether they are delivered in pharmacies, supermarkets, on the job, at senior centers, or elsewhere in the community.


To secure a sound and sustainable energy future, I will propose a progressive energy plan that reduces greenhouse gas emissions, diversifies and expands domestic and renewable supply options, makes smarter use of the energy sources we have today, and reduces over-reliance on energy from any particular nation or source. My plan will invest in American ingenuity and actively engage the private sector to innovate and implement technologies to help create an energy system for the 21st century. Together we can reduce the threat of global climate change and transform our energy system in ways that stimulate the economy and increase our security.

In the area of science, I pledge to liberate our scientific community in its quest to improve the lives of people around the globe. As a first step, I want to overturn the restrictions on embryonic stem cell research, which holds so much promise in the treatment of diseases such as diabetes, cardiovascular disease, Parkinson’s and other forms of paralysis. At the same time, I will support the creation of a regulatory structure to ensure that stem cell research proceeds along the highest ethical standards.

UPDATE 11:45am EST: Yay, Barney Frank, D-MASS is holding Paulson’s feet to the fire for using TARP money to bailout CITI but still not allowing ANY of it to be used for HOUSING, the purpose for which it was created:

…“The decision by the Secretary of the Treasury to use TARP funds for Citigroup underlines the contrast between the administration’s activity in this area and its failure to take similarly decisive action to reduce mortgage foreclosures,” Frank said in a statement.

The Financial Services chairman… told Paulson again on Monday morning that “it is essential that TARP funds be used immediately to fund mortgage foreclosure relief.”

Paulson spent much of the first $350 billion allocated under TARP on direct cash infusions to banks of every size. The fight now turns to what will become of the second $350 billion – if anything at all (Paulson suggested earlier this month that he might not use it).

Frank and others would like to see the Department of the Treasury embrace a plan advanced by Sheila Bair, the chairwoman of the Federal Deposit Insurance Corp., to use some of this money to guarantee troubled home loans. Early estimates suggest that plan could prevent 1.5 million foreclosures in the next year.

In a letter last week, the Financial Services chairman offered the Treasury secretary other ideas to use this money to mitigate foreclosures. These include: issuing new loans to offset some of the depreciation in home prices; reducing fees and upfront costs under a new federal home-loan program; and buying big batches of home loans “on a large scale for the specific purpose of modifying those loans and keeping the borrowers in their homes.”…


Will the Democratically controlled Congress have a $700 Billion dollar stimulus package on the desk of the Oval Office ready for signature on January 20, 2009?

It certainly appears so. Talk about a high pressure sales deal.

Chuck Schumer D-NY and Steny Hoyer D-MD, both spent some time Sunday putting forth very very VERY big numbers; sort of the opposite of haggling for the taxpayers benefit really, instead of  ‘How Low Can You Go’, it is how high can you bid and how fast can you get it enacted. This is frightening frankly, as there are quite a few groups with their hands out looking for payback from the election, and as we all know, “Marry in haste, repent at leisure”. And make no mistake, ALL of America will be married to the outcome of this spending…

For a package to be ready for signature on Inauguration Day, the Congress would need to have it passed and sitting on the desk by January 20th. It would appear that the planned return in December for a BIG 3 bailout will be more than that; it looks as though it will include passage of a massive new spending package:

Senator Charles Schumer of New York said on ABC’s “This Week” program that the package will be between $500 billion and $700 billion. House Majority Leader Steny Hoyer, of Maryland, said on “Fox News Sunday” that he believed the Inauguration Day goal would be met, but he declined to put a price tag on the bill.

“I think Congress will work with the president elect starting now and will have a major stimulus package on his desk by Inauguration Day,” Schumer said. “I think it has to be deep. My view it has to be between five and $700 billion.”

CNBC is breaking news that Christine Romer will be named to head of Council of Economic Advisers, I thought that was Larry Summers’ expected title? (Ahh, Summers is head of his National Economic Council). More details in 2 hours when the President-Elect introduces his team at a presser.

…University of California at Berkeley economist Christina Romer will chair President-elect Barack Obama’s Council of Economic Advisers, two Democratic officials said Monday morning.

Prof. Romer will be in Chicago today with Mr. Obama as part of the first day of a two-day rollout of the new economic team.


The naming of Prof. Romer fills one of the remaining vacancies in the president-elect’s group of economic aides. At noon eastern time Monday, Ms. Romer will join Mr. Obama at a press conference along with Lawrence Summers, designated to lead his National Economic Council, and Timothy Geithner, tapped to be Treasury Secretary.

On Tuesday, Peter Orszag, Mr. Obama’s choice to be director of the Office of Management and Budget, will headline the second day of economic events…

Deficit Hawks where are youuuuuu??? These are not the Rubin acolytes you thought you knew (picture Obi Wan Kenobi). But they will tell you, at great length, that these are not the economic times we are used to, and thus the call for massive spending. Rubin was known as a fighter for balanced budgets. We shall see, I have never known anyone/any country to spend their way out of debt and avoid massive inflation and pain later….(wartime production excluded).

But I digress and this is we are told, happy peppy fiscal spending day on the incoming Administration and CITI bailout try to ‘c’mon get happy’ with the news..I have my Eeyore hat on today, I don’t like massive spending, and I have YET to hear ANY word about a plan for HOUSING (data on housing today was purely awful) and the clock keeps ticking……. The President-Elect jsut mentioned HOLC in his presser, yay yay! and Frank is all over Paulson on his failure to address housing within TARP..

“A whole lotta money is what we’ll be printin, c’mon get happppy” maybe if we all carpool in a fuel efficient bus we can avoid the effects of this inflation……. Okay Melody Barnes of the Center for American Progress has been named policy panel chief, if she pursues the themes outlined in her WaPo piece of 2 yrs ago (see above) I am more than willing to carry my load of the deficit to cover those plans. MEANINGFUL reform and programs are well worth it, what we do not need is another huge deficit without any real reform as the payoff. I am very hopeful after that presser.

November 24, 2008. Tags: , , , , , , , . Cabinet, Center for American Progress, citigroup, Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Wall St.

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