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THE $820 billion economic recovery plan proposed by Barack Obama will not be enough to save America from a deep recession, one of the president’s leading economic advisers warned this weekend.
A deal stitched together in the Senate to pass the stimulus bill ran into withering criticism from both left and right at the end of another troubled week for Obama, which also saw his mentor, Tom Daschle, withdraw from the nomination for health secretary over unpaid taxes, and the first signs of infighting between big name cabinet and White House appointments.
Senate Democrats and just three moderate Republicans agreed to the deal hours after it was announced that nearly 600,000 jobs had been lost in January, the biggest contraction since the recession of the early 1970s.
The agreement was hailed by Obama’s allies as a victory for his bipartisan approach, but most Republicans, including John McCain, the defeated former presidential candidate, intend to vote “no”.
It may be necessary to drag Senator Edward Kennedy, who is suffering from a brain tumour, from his sick bed in Florida to muster the 60-vote Senate majority needed to pass the bill.
Obama is spending the weekend with his family at Camp David, the presidential retreat in Maryland, for the first time before heading to depressed towns in Indiana and Florida to campaign election-style for his recovery plan.
However, Professor Robert Reich, an adviser to Obama who served on his high-powered economic transition team, said the president’s bid to win Republican support for the bill had gone too far.
“The danger is that the government is doing too little, rather than too much,” he said. “The stimulus package is critically necessary, but I fear it is not enough.”
Obama had veered towards “compromising too much”, warned Reich, a professor of public policy at the University of California at Berkeley and a former labour secretary under Bill Clinton.
“I want him to get as much bipartisanship as possible, but the stakes here are very high. If the stimulus package is not effective, the recession is going to get much worse,” Reich said.
Democrats in the House of Representatives made no secret of their anger that some cherished spending programmes were cast aside to appease the Republicans, while the bill still doles out billions in tax cuts.
Democrats are furious about the slashing of $40 billion in aid to help states weather the recession; a $20 billion cut in school construction; $2 billion off a programme to expand broadband networks to rural areas; and $8 billion to “green” government buildings.
Nancy Pelosi, the powerful Democratic speaker of the House of Representatives, sparred with Obama over his determination to appease Republicans.
“Washington seems consumed in the process argument about bipartisanship, when the rest of the country says they need this bill,” she said in a thinly concealed swipe at Obama, which could presage future rows between the White House and Congress.
Pelosi described the cuts in the package as “very damaging” and said they did “violence to what we are trying to do for the future” on education and green energy.
The ebbing of support on the left has been matched by hostility on the right from Republicans who believe the plan will do little to revive the economy, despite the huge price tag.
“We want to stimulate the economy, not mortgage the future of our children and grand-children by the kind of fiscally profligate spending embodied in this legislation,” said McCain.
Mitt Romney, the former Republican presidential candidate, in effect began fundraising last week for his attempt to win the White House in 2012, based on opposition to the bill.
Larry Sabato, professor of politics at the University of Virginia, said, “It’s like that wonderful song: ‘The thrill is gone.’ Obama’s people came into office on such a high and thought, ‘Man, we’ve got a big majority.’ They expected to roll over Congress, but Congress just doesn’t do that.” Sabato added: “The public is very taken with Obama and his family and that will sustain his honeymoon for some time, but it won’t produce the Franklin D Roosevelt and Lyndon B Johnson-style reforms that he hoped for.”
As Obama braces for more knife-edge negotiations before the bill becomes law, there were other signs of disagreement at top level within his own ranks.
Hillary Clinton, the secretary of state, is thought to have won her first turf war with General Jim Jones, Obama’s national security adviser, by torpedoing the choice of General Anthony Zinni as ambassador to Iraq.
Zinni, a prominent early critic of the Iraq war, fumed publicly that he was formally offered the Baghdad job by Jones, only for it to be withdrawn without the courtesy of telling him.
Clinton and her ally, Richard Holbrooke, the special envoy to Afghanistan and Pakistan, are believed to have opposed the general’s appointment.
“As a sorry offer to placate me they offered ambassador to Saudi,” Zinni said. “I told them to stick it where the sun doesn’t shine.”
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