Obama's 2 major unemployment stimulus plans

Nina Easton:

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Obama officials insist we "can't afford not to" fix the health-care system and wean the nation off fossil fuels. "I don't see how anyone can look at the excessive growth rates [in health-care costs] and believe that can be sustained with a healthy economy," says Larry Summers, Obama's top economic adviser. Or as Zandi puts it, "Nothing is more important to the country's long-term fiscal outlook than health-care reform, and he only gets one bite at it. Investors know this, so they'll bid up interest rates" if reform isn't done right.

"Done right," of course, is in the eye of the beholder. Zandi argues that reform needs to be "credibly paid for" -- ideally by limiting the tax deduction for employee-paid plans -- and it needs to contain costs. While the first question remains under debate in Congress, on the second, the nonpartisan Congressional Budget Office warns that evolving legislation could bust the budget.

While the right kind of health-care reform has the potential to boost the economy and lessen the entitlement burden on the budget, the same cannot be said of going green, which economic models are showing will reduce growth and create job losses. The cap-and-trade bill that barely passed the House will reduce the purchasing power of households by an average of $730, rising to $830 by 2030, according to an analysis by the Boston-based consulting firm CRA International. "It's a complete myth that the economy and jobs will grow as a result of making energy 10% to 20% more expensive," says CRA economist Anne E. Smith. "You have to look at this through the lens of an economist, not through the lens of wishful thinking."

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Both of these programs look like they re in trouble as voters show increasing angst about deficits that they will produce. They are also in trouble because the mask has slipped revealing the liberalism behind the Obama rhetoric. Both of these programs would be bad for the economy and jobs.

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