RENEE MONTAGNE, host:
As jobs continue to evaporate, President-elect Barack Obama's case for a big economic stimulus package looks ever more compelling. One question is what Congress will do, and to talk about this, we turn to David Wessel. He's economics editor of the Wall Street Journal and a regular guest on our program. Good morning.
DAVID WESSEL: Good morning.
MONTAGNE: Let's begin with just a capsule version of what the president-elect is proposing for this stimulus plan.
WESSEL: He's proposing about $775 billion over two years, of which about 40 percent would be tax cuts for families and businesses and the rest would be spending. Some spent soon, and some would be like those time-release capsules that would spend a little later, because he expects the economy to be weak for some time.
MONTAGNE: Are we going to end up with a lot of Bridges to Nowhere? I know that the word there was" no earmarks," but how do you control that? What's an earmark, and what's an important project?
WESSEL: Well, all an earmark means is a specific project designated by a member of Congress, and President-elect Obama says he's going to try and avoid that. But inevitably, some of this money is going to be wasted. You can't spend that much money without wasting it somewhere in doing something that you later regret. It's really a question of balance. They're going to try and do some spending that they think will get into the economy right away, in order to help create demand, which is so weak, and get the economy moving again.
And then they're going to try - and they're going to talk an awful lot about this - to do things that will pay off in the future: energy efficiency in government buildings, and weatherizing people's homes, and spending money on computerizing healthcare, which is seen as a way to save money in the long run. They'll be lots of talk about oversight and lots of vows about prudence, but as you point out, $400 billion is a lot of money, and the government, inevitably, is going to end up wasting some of it. And we're going to be writing about some scandal here or there. It's just inevitable, but they think that's a risk worth taking to save us from a really deep recession.
MONTAGNE: Now, of course, what's going to be key is how this plays out in Congress. What's your view on that?
WESSEL: Well, I think we're seeing that the president-elect is having some trouble with Congress. Republicans are asking for more accountability, more transparency; worried about ending up with a much bigger government; showing signs they're not just going to lay over and play dead, even though they have a minority. And he's running into some problems with members of his own party. On the one hand, you have the fiscal conservatives, who are worried about the deficit, and there are others who are eager that this spending be pulled in the direction that they would think is important, even if it's not quite what the president-elect thinks. So, it's one of the problems with fiscal stimulus; you want to do it really quickly so it'll help the economy when it's weak, but the political process, generally, doesn't work quickly. So, this is going to be a real test of his ability to navigate through Congress.
MONTAGNE: Well, OK, if President-elect Obama gets Congress to go along with this stimulus plan, what does that mean for the $700 billion financial bailout?
WESSEL: Basically, you need both of these to work. Just like the human body needs oxygen and it needs food, the economy needs both some help in stimulating demand - that's the fiscal stimulus - and it needs the financial system to be working again and banks lending again, and that's going to require at least the second half of the $700 billion, if not more.
MONTAGNE: David, thanks very much.
WESSEL: You're welcome.
MONTAGNE: David Wessel is economics editor of the Wall Street Journal.