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Howard P. "Buck" McKeon: Stimulus or spending?

Posted: February 14, 2009 10:58 p.m.
Updated: February 15, 2009 4:55 a.m.
 
I don't want to sound like an alarmist, but it's important that I am precise and clear about my view of the Democrats' American Recovery and Reinvestment Act.

Democrats have been in a huge hurry to push this enormous spending bill through Congress to meet an arbitrary date they set for themselves, while holding Democrat-only closed-door meetings and without an open process for the American public.

In fact, Republicans were forced to decipher the bill through news accounts and rumors. That's no way to address a major national issue - by shutting out bipartisan action - to represent the country's interests.

Democrats may have won the majority of votes in the last election cycle, but let's take a look around because the majority of Americans still hold the same conservative values I do, and those views should be represented.

As a friendly reminder, the Democrats' bill is taxpayer funded. This means the spending in the bill is your money.

Correction: Since Democrats are "borrowing and spending" the money to fund their bill, it is your children's and grandchildren's money.

What's at risk here? The risks are innumerable, but let me highlight some issues.

The bill won't actually stimulate the economy. In a recent report by the Congressional Budget Office, expert economists confirmed what Republicans already knew: Democratic stimulus proposals will not provide the needed stimulus to our economy.

The centerpiece of the "stimulus" portion of the Democrats' original proposal is the $355 billion in new discretionary spending.

But according to the Congressional Budget Office, only $136 billion would be spent over the next two years. So what happens to the other $219 billion in discretionary spending?

The CBO predicts that this spending will not be seen until after our current economic recession has ended. This is not how to stimulate the economy.

After the House and Senate conference, the total cost of the Democrats' economic stimulus package is $789.5 billion. This is almost as much as the annual discretionary budget for the entire federal government.

Based on President Obama's estimates that the stimulus will create or save 3 million jobs, each job will cost approximately $267,000.

Considering that our projected debt for Fiscal Year 2009 is $1.2 trillion, adding another $1.1 trillion (after interest is calculated) to that debt with little prospect for the intended "stimulus" effect is completely irresponsible.

The bill wastes money on unnecessary items. While every health organization, school and town would probably welcome with open arms an influx of unanticipated money, this isn't free money.

I don't know how Democrats can possibly justify some of the spending items:

n $650 million for digital-to-analog converter box coupons;
n $1 billion for a Prevention and Wellness Fund, which can be used for sexually transmitted disease education and prevention programs at the Centers for Disease Control and Prevention;
n $500 million to replace a 30-year-old computer system at the Social Security Administration;
n $300 million for federal procurement of plug-in and fuel efficient vehicles.

According to a Washington Post article last week, Democratic leaders were demanding even more spending:

"After a tentative agreement was struck between Democratic leaders of two chambers yesterday afternoon, some Democrats appeared eager to scuttle the deal, as lawmakers vented about deep reductions in education and other social programs. At one point, Democrats in a hastily called meeting jokingly chanted ‘We want more' before relenting."

(Washington Post, "Congress Reaches Stimulus Accord," Feb. 12)

Contrary to Democrat chants, more spending is not what California or this country needs. That's why Republicans formed a House Economic Recovery Working Group and created alternatives that would have provided broad, growth-oriented, long-term incentives that are targeted at businesses to spur job creation and middle-class families who are suffering from government-imposed costs.

Unfortunately, these proven economic tactics have fallen on deaf Democrat ears. Fortunately, the public has been hearing our warnings about this Democratic measure.

Republicans know something must be done to aid our ailing economy, but our goals center around tax cuts and job creation, not a bloated Washington spending bill. Jobs, jobs, jobs - this is what we need from an "economic recovery" bill.

The House Republican Economic Recovery Plan focused on timely solutions by providing immediate tax relief for working families, help for America's small businesses, no tax increase to pay for spending, assistance for the unemployed, and stabilizing home values.

The Republican plan would have reduced the 15 percent tax bracket to 10 percent and the 10 percent tax bracket to 5 percent.

This would have resulted in an average benefit of $500 in tax relief for individuals in the 10 percent bracket, and $1,200 for individuals in the 15 percent bracket. A married couple filing jointly could have saved up to $3,200 a year in taxes.

Republicans also focused on small businesses. Small businesses that employ fewer than 500 individuals would have been eligible to take a tax deduction equal to 20 percent of their income.

Our plan would also have assisted the unemployed by making unemployment benefits tax free. The federal government should not be taking money from individuals who are struggling to get by on unemployment.

We also aimed to stabilize home values by proposing a home-buyers' tax credit of $7,500 for those buyers who pay a 5 percent minimum down payment.

Again, these proven initiatives were pushed to the side to make way for future tax increases and a greater expansion of government and government programs. As President Ronald Reagan once said, "No government ever voluntarily reduces itself in size." It's true.

Reagan also said, "It's clear that the massive deficits our government runs is one of the root causes of our profound economic problems, and for too many years this process has come too easily for us.

"We've lived beyond our means and then financed our extravagance on the backs of the American people."

Make no mistake; this Democrat-crafted $789.5 billion spending bill is extravagance of the worst kind.

Congressman Howard P. "Buck" McKeon, a Republican, represents the 25th District, which includes the Santa Clarita Valley. He is the leading Republican on the House Education and Labor Committee and a member of the House Armed Services Committee. His column reflects his own views and not necessarily those of The Signal.

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