DEMS VS. THE ONE

Posted at 7:22 p.m. ET

Lesson of the week:  In Washington, all business is business as usual.  President-elect Obama is running into trouble in his own party over his stimulus package.  Some objections may be valid.  Others seem to be the same old story - put my pet project first, or else.  The Wall Street Journal reports:

The Democratic-led Congress is moving to assert control over President-elect Barack Obama's plan to revive the U.S. economy, posing an early challenge that could define his relationship with Capitol Hill, where the resurgent Democratic Party has strengthened majorities in the House and Senate.

The Obama magic wand isn't having much effect on Congress.

Some of the strongest objections can be found within Mr. Obama's own party. Senate Budget Chairman Kent Conrad (D., N.D.) raised doubts Thursday about the job-creating value of Mr. Obama's proposed $500 payroll tax holiday, which he scoffed would only put $20 a week in a worker's paycheck.

He might have a point on amount.  But putting any money in peoples' pockets can help...rather than earmarking it for federal spending programs.

Also Thursday, Sen. Ron Wyden (D., Ore.) questioned Obama proposal to reward businesses with a $3,000 tax credit for every job they create. "There's just not a lot of history of that working very well," said Sen. Wyden, a member of the Senate Finance Committee, which will be a starting point for the stimulus package on Capitol Hill. He suggested that infrastructure spending would have a "much bigger economic" impact, and cited a specific need for investments in high-speed rail.

Dud.  Infrastructure spending takes too long to work because projects have to be planned, approved and contracted.  Tax cuts work because the money quickly goes to the people.

As concerns are coming to the forefront, the timetable for action on the broader plan is slipping, with party leaders and Mr. Obama now aiming for enactment by mid-February.

How long have they had to plan this?

For Mr. Obama, who takes office on Jan. 20, the doubts emerging on Capitol Hill pose an immediate challenge, with somewhat conflicting goals. Not only must he rein in lawmakers who want to add potentially costly items to the package, as the expense of his own initiatives, but he must win over deficit hawks aghast at its cost and fearful of the long-term implications for U.S. fiscal policy.

Again, the way you win over deficit hawks is with tax cuts.  Tax cuts stimulate the economy, and, in the end, that adds to federal revenue, reducing the deficit.  But members of Congress want stuff for their districts and states, which is a big part of the budget problem.

But now we're into governing.  Fading away are the mass Obama rallies - the last one will be the inaugural bash - and a week from Tuesday Mr. Obama will have to earn his paycheck.  He'll find that the "historic moment" of his election will live on only in the smitten media and among the party-line multiculturalists in academia.  For the rest of us, he must produce.

January 8, 2009.