The CBO doesn't have good news on the porkapalooza bill

Today President Obama lobbied for the stimulus package saying that it would be a catastrophe if it weren't passed and passed quickly. Well, maybe the Democrats should listen to the nonpartisan Congressional Budget Office which just issued a report saying that it would actually hurt the economy in the long run.

President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

The CBO did say that the bill would help in the short run, but the effects won't be very long lasting because of the long-term problems arising from the debt crowding out other investments.

CBOs basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollars worth of private domestic capital, CBO said in its letter.

CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.

The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.

CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.

Let's see what the CBO says about a plan that would strip out all the extraneous spending that is larding up this bill. And doing some nicey-nice face-saving measure of stripping out just $50 billion from a bill that is close to $900 billion as the Maine senators and Senator Ben Nelson are working on is just not going to cut it.

Remember that Obama pledged that he would get past the typical Washington politics and focus on doing what works and not just what is good for his party. Well, he can start by paying attention to what the CBO is saying about the long-term effects of this porkapalooza of a bill.

This whole approach of hurry up, we've got to pass something, anything right away is ridiculous. Yes, the economy is in miserable shape but doing something bad won't improve the economy just because you pass the bill before some artificial deadline like doing it before President's Day. Scrap this monstrosity and then strip out the parts of the bill that will actually stimulate the economy. Save the rest of the spending scattershot bonanza for the regular budget procedure. After all, when this bill is passed and the next banking bill is passed, they'll still have to pass the regular budget. And those numbers aren't going to be pretty.

Follow Alice Rivlin's advice. She's a Democrat so they can't demagogue her recommendation

In testimony before the House Budget Committee yesterday, Alice M. Rivlin, who was President Bill Clinton's budget director, suggested splitting the plan, implementing its immediate stimulus components now and taking more time to plan the longer-term transformative spending to make sure it is done right.

"Such a long-term investment program should not be put together hastily and lumped in with the anti-recession package. The elements of the investment program must be carefully planned and will not create many jobs right away," said Rivlin, a fellow at the Brookings Institution. The risk, she said, is that "money will be wasted because the investment elements were not carefully crafted."

Sounds like common sense, but I guess that is lacking when there is the opportunity to spend close to a trillion dollars on a package that will end up damaging the economy in the long run.