Obama's Recovery Plan Moves to the Center

Republican Senate Minority Leader Mitch McConnell says he has no qualms with President-elect Barack Obama's stimulus plan – and that could be a problem in itself.

After eight years of tax cuts under President Bush, some Democrats – especially Northeastern liberals like Sen. John Kerry and Rep. Barney Frank – think that giving tax breaks to businesses and middle-class families will not create long-term job growth. Scott Lehigh, writing in the Boston Globe's op-ed page, thinks tax cuts make little sense and wonders whether they exist in Obama's plan as a carrot to Republicans.

Democrats are also leery about heaping more debt on the books. The Congressional Budget Office estimates the deficit will reach $1.2 trillion in 2009, not including Obama's stimulus plan. Some in Washington also believe the total stimulus price tag will ultimately reach closer to $1 trillion. Obama's preliminary estimate is around $775 billion.

With 11 days until inauguration day, Obama, like President Franklin D. Roosevelt 76 years ago, will be afforded a brief honeymoon period in Washington and this is the impetus for the presidential feel of yesterday's speech at George Mason University.

Former labor secretary under President Clinton, Robert Reich, believes the government stimulus should reach upwards of $900 billion spread over two years and urges for it to be done quickly. "Without federal action, next year could be even worse," Reich told congressmen at a forum discussing the stimulus bill in Washington.

Reich will discuss the economic prospects of the country at The Commonwealth Club of California next Wednesday when he gives a special forecast for the economy in 2009.

On his blog, Reich urges Congress to spend without caution of overextending itself.

As the buyer of last resort, the federal government must respond if that cycle is to be reversed. In my judgment, this will require a stimulus of about 6 and a half percent of gross domestic product, or a total of some $900 billion, spread over two years. That’s my estimate for the shortfall in private demand. But the federal government should stand ready to spend larger sums if necessary to get the economy back on track toward full capacity. The danger is not that the government will do too much; the danger is that it will do too little, too late.

Reich agrees with Obama's plan to upgrade the nation's infrastructure as does Paul Krugman, but some disagree with the basic Keynesian approach. Larry Kudlow at the National Review mocks Obama's progressive pedigree by saying his stimulus plan is somewhat Reaganesque. "Nobody really believes infrastructure spending will end the recession or create permanent new jobs. However, it’s interesting just how much the Obama plan has changed since the election," he wrote.

Here lies the problem facing Washington: in the shadow of a clumsily rolled out $700 billion bailout for the financial sector where many do not know where the money went and fewer gained any stimulus from the investment, how will what many people see as a chronically ineffective legislative branch deal decisively with the economy? Obama wants a bill ready to sign from Congress by Feb. 13. Speaker of the House Nancy Pelosi is already pushing to extend the deadline. Meanwhile, unemployment reaches 7.2 percent and the prospect of this year being somewhat better than the last decreases.

Did Latino Voters Really Turn Red States Blue?

Conventional wisdom says Latino voters greatly helped Barack Obama become president-elect, but do the numbers back up such an assertion?

Frederico Pena, the former secretary of energy under President Clinton and mayor of Denver, told the Associated Press earlier this week that battleground states such as Colorado, Nevada, New Mexico and Florida would not have been won by Obama if not for the Latino voting bloc.

Poll numbers show voters backed Obama over Sen. John McCain by a 2-to-1 margin. McCain's 31 percent was significantly lower than the 44 percent President Bush garnered in 2004.

But, Mark Krikorian, writing "The Corner" blog at National Review, has an alternative view of the Latino vote's tangible power in this year's election.

According to the usual suspects, the benchmark in garnering Hispanic votes for Republicans is Bush's 40 percent showing in 2004. So what would have happened if McCain had matched Bush's performance, instead of the 31 percent he actually got? Based on CNN's exit polls, McCain still would have lost Nevada, Colorado, Florida, New Mexico, Ohio, Pennsylvania, not to mention, say, California and New Jersey. Conversely, even if Obama had won 90 percent of the Hispanic vote in Texas, instead of 63 percent, he still would have lost the state. With the possible exception of North Carolina, where the results were close but the number of Hispanic voters is too small to register in the exit poll, there doesn't seem to be a single state where the Hispanic vote was critical to the outcome.

If the Latino vote didn't sway a single state one way or the other, what gives? Why are Latino leaders patting themselves on the backs and Republicans stressing over the loss of a group perceived to be "conservative-ready"?

The importance of Latinos voting in greater numbers for Democrats, along with their demographic growing larger and tending to be younger, in general, could portend great discomfort for future conservatives trying to win not only presidential electoral politics, but governorships in the West and seats in Congress.

An article at U.S. News indicates Latinos' switch toward Obama may have been part of an overall disillusionment by all demographics from eight years of President Bush.

Economic factors are on the minds of most Americans but may have hit Latinos harder. According to the article, Latinos are twice as likely to receive high-interest loans than whites, putting them at risk for financial upheaval in this tumultuous financial climate.

Disproportionately higher unemployment for Latinos may have also changed perceptions, as did the relative absence of gay marriage (excluding California and two other states) and abortion as issues to stoke latent conservative values Latinos tend to possess.

Luis Ricardo Fraga, an associate provost at the University of Washington and former Stanford University professor, will share his insights on the role of Latino voters in the 2008 election and the history of Latino voting patterns from 1960 to present, in a speech to The Commonwealth Club on November 19 at Morris Dailey Auditorium on the campus of San Jose State University.