Episode 27: The Untold Story of the Stimulus

David Obey, the main in the middle of the stimulus plan, reflects on the Congressional fight.

Five years ago. It was the early days of the Obama presidency. And it was a panicky moment in what came to be called the Great Recession.

Congress already had bailed out Wall Street’s most troubled companies with a program called TARP – the Troubled Asset Relief Program.

Now Congress was desperately trying to find a way to pump some blood into a very sick economy. The markets, the experts, the country wanted action.

In the House of Representatives, the man in the middle of coming up with stimulus plan fast was David Obey, a longtime Democratic congressman from Wisconsin who chaired the Appropriations Committee.

Obey was known for his mastery of the appropriations process and his blunt talk. He retired in 2011, and now he is really blunt about what went on in the smoke-filled rooms five years ago and about today’s bitter budget battles.

With the economy in free fall, Obey met with his Republican counterpart Jerry Lewis of California to start writing a bill.

“And Jerry just grinned and said ‘Dave, I’m sorry, but we’ve got orders from headquarters, we can’t play, we can’t play,’” Obey recalls. “He said it twice.”

Whatever Republicans thought privately – some of them told Obey they agreed that Congress needed to pass a stimulus bill – they weren’t going to publicly help the new president help the economy.

But that wasn’t the scariest thing, Obey says. He realized many fellow House members – Democrats and Republicans – simply lacked a sophisticated understanding of the economy and government spending policy.

“One of the problems that you have today, is that a lot of members of Congress just don’t know a hell of a lot anymore,” Obey says.

Eventually, the $787 billion American Recovery and Reinvestment Act was born. But “it was about half the size it should have been,” Obey says. “So we were from day one … we were trying to row the rowboat with only one oar.” In other words, according to Obey, the size was a result of stubborn politics and many lawmakers who struggled to comprehend what was going on.

If bipartisanship in Congress needed a stimulus then, it needs a bailout now, Obey says.

The biggest culprit: Gerrymandering that creates one-party districts and safe seats for members.

“I mean you wouldn’t have such idiotic statements coming out of members of Congress if they had to be taken seriously by a majority of people across the political spectrum,” Obey says. “All you have to do is appeal to the most extreme 25 per cent. How in the hell do you bring this country together?”


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