Politico’s Mike Allen has some excerpts from Obama’s prepared remarks, to be delivered today at the National Governor’s Association meeting in Philadelphia.

As president, I will not simply ask our nation’s governors to help implement our economic recovery plan. I will ask you to help design that plan. Because if we’re listening to our governors, we’ll not only be doing what’s right for our states, we’ll be doing what’s right for our country. That’s how we’ll grow our economy – from the bottom-up. And that’s how we’ll put America on the path to long-term prosperity. [Emphasis added.]

Economic policies targeted at those at the bottom, with the benefits intended to work their way up to the top? In America?

Throughout Washington, the heads of hundreds of conservative think-tankers are no doubt exploding simultaneously.

UPDATE: Obama just delivered the remarks, and he veered considerably from the prepared remarks sent to reporters. He omitted the line I highlighted above. Perhaps he saw it as too ideological or antagonistic, or he simply forgot it. However, it will be very interesting to see to what extent his administration’s economic policies reflect that principle.

Main Street in Teague, TX (Flickr: cmaccubbin)

Late last month, as Congress was on its way to passing the $700-billion Wall Street bailout plan, another economic stimulus measure died a quiet death in the Senate.

That $58-billion proposal would have extended unemployment benefits, pumped billions of dollars into local infrastructure projects and increased funding for low-income nutrition and health-care programs. In other words, rather than bailing out Wall Street, this bill helped Main Street.

It didn’t survive long. Just hours after the legislation passed the House, Republicans killed it in the Senate. Now, many economists, health-care advocates and low-income advocacy groups say, while the larger bailout was probably needed to address frozen credit markets, it will do little to ease the immediate pinch on the country’s most vulnerable folks. That hole, which the stimulus plan would have helped to plug, remains.

Illustration by: Matt Mahurin

“Bailing out Wall Street’s bad debts when millions more Americans can’t pay their bills is like bailing out a rowboat springing more leaks while the ocean is rising,” Robert B. Reich, former Labor secretary under President Bill Clinton and now professor of public policy at the University of California, Berkeley, wrote last month for Talking Points Memo. “Unless Americans on Main Street have more money in their pockets, Wall Street’s bad debts will continue to rise.” Reich called for an extension in unemployment benefits and the passage of a stimulus bill to create jobs.

Congress, however, has made clear where its priorities rest. Despite its approval of the $700-billion Wall Street bailout — combined with an additional $110 billion in unpaid tax benefits — many members claimed the $58-billion Main Street stimulus was just too expensive. The Bush administration echoed that sentiment, vowing to veto the bill.

Nearly 20 years after President Ronald Reagan left office, trickle-down economics — the theory that further enriching the wealthiest folks in the country will (eventually) save us all — won the day.

It wasn’t the only example in recent weeks. Late last month, Congress passed another industry bailout, offering $25 billion in federal loans to the nation’s ailing automakers. The loans almost exclusively benefit the Big Three — Ford, General Motors and Chrysler — who have lost the farm betting on gas-slurping SUVs. Ostensibly, the funding will help the automakers develop more fuel-efficient engines, but it remains up to the Energy Dept. to set those requirements.

Michigan’s congressional delegation has been quick to claim that the funding is necessary to protect local jobs. “This isn’t a bailout,” Sen. Debbie Stabenow (D-Mich.) told Fox News last month. “We’ve been working on this for some time. The timing on this is very unfortunate.”

But some environmentalists disagree, arguing that there should be some benefit to the taxpayer for bailing out the industry. Daniel Becker, a former Sierra Club official who is now director of the Safe Climate Campaign, offered one suggestion: force the beneficiaries to increase their fuel efficiency standards to 40 miles-per-gallon by 2015. “We shouldn’t be doing this,” Becker said, “unless they’re going to change their ways.”

Perhaps the trends aren’t surprising, the catering to automakers above environmentalists; the bailing out of investment banks instead of troubled homeowners. In terms of lobbying dollars, the industries, after all, hold an enormous advantage.

If Americans have learned no other lesson in recent weeks, at least we now know that our individual financial health hinges directly on that of a few big banks in New York — a reality clarified by Federal Reserve Chairman Ben Bernanke as he testified before Congress last month.

“People are saying, ‘Wall Street — what has that got to do with me?’” Bernanke said. “Unfortunately, it has a lot to do with them. It will affect their company. It will affect their job. It will affect their economy that affects their own lives, affects their ability to borrow and to save and to save for retirement and so on.”

As if on cue, the Congressional Budget Office estimated Tuesday that Americans have lost $2 trillion in retirement savings in the past 15 months.

Still, many observers point to the importance of having an economic stimulus bill — a second stimulus bill, for the first has come and gone — on top of the Wall Street bailout. The House-passed proposal would increase funding for homeless kids, food stamps and state Medicaid programs — the very programs that get squeezed in difficult financial times.

Budget hawks argue that the country can little afford adding to deficits. “At some point we have to put the some breaks on the Treasury,” said Steve Ellis, vice president of Taxpayers for Common Sense, a budget watchdog group.

Jagadeesh Gokhale, an economist at the libertarian Cato Institute, agreed, arguing that spending increases showered on social programs during recessions almost never revert to lower levels during booms. “If we pass a liberalization of the enrollment rules today,” Gokhale said, “they will become entrenched.”

Yet without the stimulus, some advocates say, the costs would be even steeper. “States will begin very serious discussions about cutting health care,” said Bruce Lesley, president of First Focus, a child-welfare group. “The uninsured rate could skyrocket.”

On Tuesday, the Center on Budget and Policy Priorities, or CBPP, a liberal policy analysis group, issued a report revealing that the weak economy — not the credit crunch — remains the most significant obstacle as states struggle to provide basic services under ever-tightening budgets. Increases in joblessness lead not only to the heightened need for public services, the report points out, but also to decreased revenues. The squeeze comes from both sides.

The Wall Street bailout, said Chad Stone, chief economist at CBPP, “in no way obviates the need for fiscal stimulus. They should have done both.”

There might yet be time. The Senate is scheduled to return to Washington on Nov. 17, leaving one last opportunity to tackle the House-passed stimulus bill this year.

Right.

Last night, the Senate passed a modified version of the administration’s bailout, but not before they loaded it up with every bit of tinsel they could feasibly toss on.

This includes: billions in renewable fuel tax credits; billions in relief for families who would otherwise have to pay the alternative minimum tax next April; a tax credit for companies that promote bike commuting; a provision expanding insurance coverage for mental health services, and the list goes on. (Indeed, the original bailout bill was three pages long; the latest version is 451.)

Not that these things are necessarily bad policy steps — but of the $150 billion in new tax breaks, only $40 billion are offset (ie, this adds $110 billion to the country’s debt).

Those tax breaks are not a bad ploy for getting reluctant House Republicans on board. They, after all, were largely the reason a similar bill failed the lower chamber on Monday.

But it makes ridiculous those claims that the $56 billion House stimulus bill (think: Medicaid, food stamps, infrastructure and unemployment insurance) was a non-starter because, as the White House said in threatening a veto, it was too expensive.

Who said trickle-down economics died with Ronald Reagan?