Progressive Caucus Steps it Up on the Stimulus

Ask, and ye shall receive.

Earlier this week I lamented the conservative House Blue Dogs’ ability to command the political spotlight in Washington while the larger Congressional Progressive Caucus seemed to sit on the sidelines. And now we have a sign that the left wing of the Democratic party is ready to flex its muscle.

Rep. Jerrold Nadler’s (D-NY) office just mentioned that the Progressives are requesting a meeting with President-elect Obama “to discuss greatly increasing the size” of the economic recovery package. Nadler also rapped the House stimulus bill as too small to truly lift the nation out of recession, signaling a showdown to come over despite the legislation’s likely weakening in the Senate.

Nadler’s full statement after the jump.

The economic recovery package outlined yesterday is an essential means of providing Americans the relief that they desperately need. But, as is currently proposed, it is too small. We are all in agreement that we need a large economic stimulus bill to halt job losses and inject enough aggregate demand into the economy to avert a depression. Every economic indicator points to the risk of a real depression if we do nothing.

However, according to a report by Christina Romer (Chair-designate of President-elect Obama’s Council of Economic Advisers) and Jared Bernstein (Chief Economist and Economic Policy Adviser-designate to Vice President-elect Biden), even with this plan, we could still see unemployment rates of 7% by the end of 2010, when the recovery plan is expected to have its strongest effect, and average unemployment rates of 7.3% for three years.

Nobel Laureate Paul Krugman wrote: ‘That’s a scary number, big enough to pose a real risk that the U.S. economy will get stuck in a Japan-type deflationary trap.’

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