One is direct economic stimulus, with the economic multiplyers that Moody's has calculated to be most positive. That will account for $550 billion at least. The remainder as tax cuts, if it stays at $300 billion, isn't a negative, just a neutral; each dollar delivers a dollar to GDP. But the thinking, and we'll know more as it moves along, is to reduce the business part of that tax break and add money to the higher-multiplyer targets. This deal isn't done yet, and the balance may end up more like 600/250.

Minus the business provisions, the tax breaks all bear on the middle class including a much-needed adjustment in the AMT which is not actually a "tax-cut" although it is being touted as such. This is a Progressive change, since we have seen the tax burden shift substantially away from the rich and onto the middle class under Bush. Suppose that this is a first installemnt towards a generally more Progressive taxation structure, to be followed by not renewing the temporary Bush tax cuts that favor the rich. If this were to be done, our tax structure would resemble that formulated under Clinton in '93, which laid the basis for greatly reducing the Federal deficit.

The total required stimulus does look to be much higher than what is in this measure but the opposition in Congress - Republicans + BlueDogs - is still substantial, enough to block any measure, and Obama simply cannot obtain the whole amount all at one time. What he can do, it appears, is get this $550-600 billion now if he includes a tax-cut sweetener. It is very important, I think, that he get this win now and start the recovery process without a protracted struggle. The rate at which this money can be spent is limited and means we don't have to appropriate it all NOW NOW NOW anyway.

The next step will be to come back later in the year for another $500-600 billion. That will draw objections from Republicans and BlueDogs as being fiscally irresponsible, need to balance the budget, blah blah blah. The best way to do that is foreswear renewal of the Bush tax cuts. That isn't a tax increase, just the end of temporary tax breaks. Thus, by a year from now well more than a trillion will have been spent on stimulus while normalizing the tax code into a more Progressive structure.

I don't know that this is the thinking, but it is consistent with what has been thusfar proposed.

But why can't Obama use the "now Now NOW" line for the spending part of the stimulus, and talk about tax cuts as part of a larger package later (i.e. "we have to get the money in the spending pipeline NOW, we can figure out the tax cut later...")

Let me answer my own question -- because Obama doesn't have Clue One about the economy, and is relying upon (consistently wrong) village wisdom.