Pelosi Front-Runs Obama on the Economic Agenda

WASHINGTON -- House Speaker Nancy Pelosi told the Wall Street Journal that she is considering a two-staged effort to boost the shaky U.S. economy, arguing for action now on a stimulus package of $60 billion to $100 billion, followed early next year by a companion measure that would include a "permanent tax cut."

It appears Speaker Pelosi isn't wasting any time to get out ahead of the new Obama administration with some of her own plans for economic aid.   Tomorrow Barack Obama will announce parts of his economic agenda, so the timing of Pelosi's announcement shouldn't go unnoticed.   With Pelosi mentioning "permanent tax cuts" but leaving details to the imagination, we may be begin to see some friction inside the Democratic party about how best to help the economy.   One wonders if Pelosi consulted the President-Elect before discussing these plans.   They may also be using Pelosi to float ideas to gauge public reaction.

Either way, clarity on the tax cut plans may help ease worried consumers.  With the possibilty of income tax hikes on those making more than $250,000 per year, a jump in taxed income for social security and capital gains tax increases all having been discussed prior by the Obama camp, Americans have tightened their belts and withdrawn money from the stock market.   Slowing economies, weakening profits and the potential of higher taxes are the perfect storm reason to sell.   There needs to be a reason to buy again.

And it appears she wants to help give consumers a reason to buy cars again.

Speaking a few hours before a scheduled meeting with top executives of U.S. automakers, Ms. Pelosi said she's inclined to provided additional assistance to the industry.  She said Democratic leaders are examining a range of suggestions forwarded by members of Congress. They include tax credits to encourage the purchase of new autos and additional taxpayer-backed financing, beyond the $25 billion in loans already approved to help the industry retool to meet raised fuel-economy standards.

This is a rare piece of good news for GM, Ford and Chrysler.  But the cry is becoming louder for Congress to eventually shut off the funding.   Not every company and industry can or should be saved.   And what of the Asian and European automakers?    While they are not in the dire straights of the "big three," their sales have fallen as well and they employ tens of thousands of workers in America.   The very definition of what is an "American" automaker is blurry, as all Honda Accords are made in Marysville, Ohio and most of the BMWs you see are built in South Carolina.   That is but one of the big decisions to be made in the months ahead.

Now that the election is behind them and the euphoric mood no doubt being dimmed some by the reality that they are now the primary party on whom our citizens are relying on to fix our worsening economic malaise, the Democrats cannot afford to squabble over the fixes or play politics with press conferences.