Barack or Stephen: Who really stimulates you?

On February 19, Barack Obama flew into Ottawa for his first presidential trip outside the United States. His host, Prime Minister Stephen Harper, is yearning for some of his visitor’s high approval ratings to rub off here at home.

Although such visits are highly controlled and orchestrated affairs, comparisons of the two leaders’ characters, styles and (hopefully) policies will be unavoidable. Most notably, while both leaders have advocated massive spending packages to get their economies growing again, the differences between the ways they stimulate are starkly evident.

Economic stimulus…“Must we?” vs. “Yes We Can!”

Citizens for Public Justice (CPJ) found Mr. Harper’s January 27th minority government budget to be a lost opportunity. While the budget provided an economic stimulus plan, it also missed the opportunity to make broader changes that would promote public justice and dignity for all Canadians.

Most significantly, the budget failed to mention poverty. It did not include a poverty reduction strategy or provide measures to adequately protect those living in poverty. While there was a small extension of the length Employment Insurance benefits can be received, there was no increment in benefits paid or increased access provided to the program.

Instead, Harper offered tax cuts. But for those living in poverty (therefore unlikely to be paying much tax) there was little relief. Broad tax cuts are more political pandering to gain the support of ideological conservatives than they are a proven strategy for economic stimulus.

In contrast, according to New York Times columnist Robert Pear, “The stimulus bill working its way through Congress is not just a package of spending increases and tax cuts intended to jolt the nation out of recession. For Democrats, it is also a tool for rewriting the social contract with the poor, the uninsured and the unemployed...”

For example, the White House’s stimulus package was designed to extend Medicaid coverage to new groups, like those receiving unemployment insurance benefits (i.e., to assist those who lost health coverage along with their jobs). As well, the White House was anxious to assist states and localities to avoid cuts in social services in the face of the severe economic downturn.

The bickering between Democrats and Republicans over the stimulus package is less in regard to the size than the targeting of measures, with the Republicans, like Canada’s Harper, viscerally committed to tax breaks. The final package indicates the new President’s ability to garner bi-partisan support and forge his own path to prove that “Change Can Happen.”

A lighter shade of…green?

Again, according to the New York Times (January 4, 2009) Mr. Obama has said his recovery plan must “make down payments on his campaign promises for permanent changes that will reshape the economy, especially for the good of low-wage and middle class workers. Such changes should carry permanent costs for new energy, education, health care and tax policies.”

Mr. Harper wears a “pale shade of green” when compared to Mr. Obama’s eco-friendly plans. Although neither leader has yet moved to put a price on carbon emissions, Mr. Obama has promised to do this quickly while Mr. Harper has expressed only a weak commitment to intensity based reductions and an eventual emissions cap.

Mr. Harper’s budget showcased a home renovation tax credit, but without any compunction for builders to “go green.” Indeed, one Canadian commentator remarked that Mr. Harper’s idea of “green” was to give tax credits to homeowners who laid new sod on their lawns! The budget did promise a $1 billion “Green Infrastructure Fund,” while referring to controversial spending on the nuclear industry and carbon capture and storage as “environmental.”

Contrast these hesitant steps with Mr. Obama’s intention to spend on a national energy grid to harness and distribute power from wind, water and other local, alternative energy sources. Obama has proposed to dedicate $100 billion to the development of renewable energy sources, while Canada’s ecoEnergy program for renewable sources received no new money in Ottawa’s January budget.

Canada’s Green Budget Coalition reported that the money provided for “clean energy” (covering things from home retrofits to power lines) was “on a per capita basis…four times less than President Obama’s ‘green stimulus’ measures.” The White House has also proposed a $7,000 tax credit for those who buy advanced technology vehicles and $4 billion to Detroit auto-makers who build hybrid cars. For its part, Canada will only commit to “harmonize” fuel efficiency standards with our southern neighbour.

On February 19th, when the two leaders meet, ask yourself the question: beyond the friendly appearances, which man’s policies really stimulate your local economy, ecology, and interest?