The chairman of President Obama’s Presidential Economic Recovery Advisory Board, Paul Volcker, is an official of a think-tank that recently assailed the stimulus package making its way through Congress for introducing too many long-term spending measures.
Volcker is one of 31 individuals listed as being "directors" of the Committee for a Responsible Federal Budget.
Last week the president of the Committee, Maya MacGuineas, called "troubling" the number of spending programs in the stimulus bill that are "really intended to be permanent new policies rather than temporary items to help boost the economy. While we need deficit spending now, extending our borrowing beyond the economic downturn will make our already-dismal fiscal picture far, far worse. The economy simply can’t handle that."
The Committee cited as examples the$70 billion “Making Work Pay” Tax Credit, $15 billion in education funding for Pell Grants, Head Start, and Child Care Development, and $14 billion in new health insurance subsidies for unemployed workers enrolled in COBRA.
“The American Recovery and Reinvestment Act is beginning to look remarkably similar to the Obama campaign’s tax and education plans,” remarked MacGuineas. “Many of these items may be worthwhile, but an emergency measure is the wrong way to push through permanent changes to the budget. If politicians want to enact long-term spending or tax policies, they should be enacted through the normal legislative process. And they should be paid for with offsetting tax or spending changes, just as President Obama committed to when he proposed the policies in the first place.”
The White House did not respond to questions about the matter.
At the event today where he intoduced his Economic Recovery Advisory Board, Obama heralded the wide array of independent different economic voices in the team. One member, for instance, Martin Feldstein, has said he opposes the stimulus plan as Congress has written it.
"One thing I am sure they all share — we all share — is the sense of urgency that you alluded to and emphasized," Volker said. "The figures this morning simply reinforce that, and I can’t imagine that the Congress won’t share the sense of urgency and you can get on the — on the road toward the kind of program you want. Thank you for the confidence that you’ve shown in all of us. We hope to help."
UPDATE: MacGuineas called me back later this afternoon to say that "the Committee has numerous positions on the stimulus package and the economic recovery, including that stimulus is necessary given the huge downturn in the economy and that it should be targeted and temporary. And we have been focusing on which parts of the stimulus package meet those criteria and which do not."