Coming Soon: Congress Is Back With 'Stimulus-2'

What works and what doesn’t, of course, is a matter of some debate and could very likely slow down the legislative process.

One-time tax cuts, or rebates—the cornerstone of the previous package—will probably not have a role in the second stimulus plan.

An extension of unemployment benefits, a boost in food stamp funding, aid to states and municipalities—absent in the first package—are widely considered to be among the must haves, according to budget watchers and legislators.

“They make sense economically and politically,” says Bixby.

AP

Another somewhat conventional measure is spending on infrastructure—buildings, roads and bridges—but its inclusion is less certain. Skeptics say it is likely to be end up in the package because of strong lobbying efforts, even if such spending measures tend to have a flash-in-the-pan impact.

Congressional leaders are said to support Infrastructure spending if it is for existing projects, such as ones that have been delayed, rather than new ones. Nevertheless, some are talking about ambitious new spending in the form of energy investment or a public-works program.

Among the more unusual and untested measures are tax credits for business to hire workers and a one-time allowance for the withdrawal of money from a 401(k) retirement account without the normal stringent tax penalties.

Democratic presidential candidate Barack Obama happens to support versions of both ideas.

Critics say undoing policies to encourage savings, particularly in a country that has a problem saving, is unsound and could set a bad precedent. But its inclusion in the policy debate underscores the something-for everyone approach that is seeping into the process.

“I hear people saying, ‘Where’s my bailout?' ” says Schatz.

Former Federal Reserve governor and White House chief economist Lawrence Lindsey told CNBC that a lot of the ideas are of the "'lets help out our friends back home' variety."

Arnold of Cato calls them the “innocent bystanders who have taken a pretty hard hit to their savings,” because of the stock market sell-off and economic downturn.

So at this point, if Halloween is the holiday that most resembles the economy and the financial system, then it is Thanksgiving and Christmas rolled into one for government fiscal policy.

Observers say there’s a chance a lame-duck Congress will pass a small package in the weeks ahead, leaving a bigger package to a new congress and president in January.

By that time, however, the recession—by one general measure—will be a year old and certainly deeper than today with the unemployment headed to 7 percent, leaving Congress vulnerable to criticism it delayed staving off some of the pain.

Either way, the level of spending is worrisome to many and dangerous to some. Hanke says governemnt has lost "any sense of proportion.

"It's just spend and pass the burden on the future," adds Schatz.

© 2012 CNBC.com

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