Two More Signs that Additional Fiscal Support Is Coming

Since Congress enacted the American Recovery and Reinvestment Act (ARRA) in February, there has been intermittent discussion of a "second stimulus bill" (never mind the fact that ARRA was in fact the second bill; the first one was enacted in 2008).  However, officials who raised the possibility of additional stimulus always quickly backtracked or made clear that they were not actually proposing additional fiscal support.  This has begun to change. We point to two particular statements in the last few days:

1.  Senate Majority Leader Reid (D-NV) was quoted in The Hill newspaper (a Capitol Hill-focused publication) yesterday indicating that the Senate will consider a "jobs bill" in early 2010. It's not clear what such a bill might include, or how large it might be.

2. President Obama announced this morning that the White House would convene a "job creation forum" in December.  While the event clearly serves a public relations purpose, the scheduling of such a high profile event implies there probably will be some new proposals to go along with it.

This may be the set up for yet another round of springtime stimulus in 2010, to be crafted in December and considered by the Congress in its second session early next year. Interestingly, this is the same timetable we've seen in each of the last two years-- policy formulated internally in December, debated publicly in January, enacted in February. If we do see a replay late this year and early next year, it seems likely to take a bit longer, and meet more resistance than the last two stimulus packages, which moved surprisingly quickly through the legislative process due to broadly held bipartisan concerns over the state of the economy. 

As outlined in last Friday's weekly,  we expect $250 billion (bn) in further fiscal support over the next three years, including $75bn in 2010.