Clinton & Obama Eschew Pay-as-you-go


January 15th, 2008

The Hill that the release of Senator Clinton and Senator Obama’s economic stimulus package has put them at odds with their Congressional counterparts. When the Democrats took control of Congress last year they adopted a “pay-as-you-go” system.

Now Congressional democrats are left with either the choice of going against their parties potential nominees or continuing their new tradition of observing fiscal responsibility, which was an issue that helped them take control in the first place.

Both Clinton and Obama’s proposals would cost taxpayers, Clinton’s is estimated at $110 billion, Obama’s at $120 billion. Both argue, as some economists do, that offsetting economic stimulus with tax increases would offset the objective of the stimulus. Put simply, in order to stimulate the economy one must put the budget into a deficit to pay for it.

Obama and Clinton hope, with varying ways, to achieve the same objective. Put money into the hands of those that need assistance in order to have them spend it and flush the overall economy with new money.

Republicans too are releasing economic stimulus packages including one by Rudy Giuliani which seeks to achieve the same objective through tax cuts. Mike Huckabee released a plan this morning. Because Republicans are achieving the objective through tax cutting though they may not face the same internal backlash from their party as Democrats now face.

Without mounting signs that the economy is headed for recession and polling showing the issue is top in Americans mind, the debate undoubtedly has just begun.



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