Republicans Balk at Short-Term Stimulus in Obama Plan

The New York Times
Dec. 4, 2012

Republicans and Democrats are struggling to find common ground on a long-term debt deal. But as economic growth has weakened this quarter, they are at odds over what the flagging recovery needs in the immediate future, too.

The Obama administration is arguing that the sluggish economy requires a shot in the arm, and it included tens of billions of dollars of little-noticed stimulus measures in its much-noticed proposal to Congressional leaders last week. But Republicans have countered that the country cannot afford to widen the deficit further, and have balked at including the measures in any eventual deal...

Economists remain nervous about the combination of the already weak recovery and the prospect of the tax increases and spending cuts — with billions of dollars of fiscal contraction likely to take place even if the White House and Congress reach a deal.

“We are worried about going too fast, too quick on the cuts side,” said former Senator Pete V. Domenici, Republican of New Mexico, on Monday at a meeting with reporters at the Bipartisan Policy Center. He was presenting a plan for a deficit reduction framework along with Alice M. Rivlin, the budget director under President Bill Clinton.

Ms. Rivlin added, “We don’t need an austerity budget.” Indeed, the two budget experts proposed including a one-year income tax rebate to give the recovery some breathing room.