Financial Times FT.com

The US needs its stimulus now

Published: February 1 2009 17:46 | Last updated: February 1 2009 17:46

With the US economy shrinking at an accelerating rate, the case for a strong fiscal stimulus should be uncontroversial. Yet last week the House of Representatives passed its version of the measure sought by the Obama administration without a shred of Republican support. The Democratic majority in the Senate, which now takes up the legislation, is too small to assure passage without Republican votes. The bill can and should be improved – and some of the most needed changes might be to Republicans’ taste – but the greatest need is speed.

Even with prompt passage of the measure, according to the Congressional Budget Office, much less than $200bn of the $819bn in the plan would take effect in the remaining eight months of this fiscal year, which is when the stimulus is most needed. Delay in passing the bill beyond the middle of next month would be a grave setback. It is incumbent on Senate Republicans, especially, to avoid this.

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