• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: Don't Let The Senate Make It Worse

    The Wall Street Journal calls yesterday’s economic stimulus agreement “an almost perfect political stimulus: a one-year ‘middle-class tax cut’ for Americans in the most populous demographic group; a few tax goodies to sweeten the cash flow of certain current businesses, and a boost to the business of those world-class lobbying firms and campaign contributors, Fannie Mae and Freddie Mac.” If only we could be assured the damage would end there. Already Senate tax-and-spenders are identifying a laundry list of government handouts that must be included in any deal. A quick look at the the good and bad in the deal.

    The Good:

    • Accelerated depreciation tax cuts for businesses. These cuts allow companies to rapidly deduct qualified investment from their tax liability, making new investment opportunities more profitable and attractive
    • No new government investments. Special interest groups had sought to tack their government handout wish lists to the stimulus bill. Fortunately spending for infrastructure projects and renewable energy were kept out of the package.
    • No extended unemployment benefits. Studies show unemployment extensions only encourage workers to stay unemployed longer and discourage employers from hiring workers after temporary layoffs. Extending unemployment does not stimulate the economy.

    The Bad:

    • Expanded government interference in housing market. Treasury Secretary Henry Paulson says he got “run down by a bipartisan steamroller” on the issue, but, whatever the reason, the deal also allows government-backed Fannie Mae and Freddie Mac to purchase home mortgages valued up to $729,750 (some $300+ more than they can now).

    This is an election year and Congressional approval ratings currently hover around 30%, so attempted government giveaways are to be expected. Hopefully Senate conservatives can prevent this runaway spending train from gathering any more momentum.

    Quick Hits:

    • The US and Iraqi governments are negotiating a strategic agreement that sees a long-term US military role in Iraq including support, equipment and training for Iraqi forces.
    • Progressives lost a key Senate battle over FISA yesterday when the body rejected the Judiciary Committee bill that did not include immunity for companies that assisted in surveillance in overseas targets after 9/11. Instead the Senate will work from the Intelligence Committee bill which ensures future private sector cooperation with national security agencies.
    • The FBI agent tasked with interrogating Saddam Hussein revealed that Hussein did not believe the US would invade in 2003 and also intended to restart his WMD program.
    • Prius owners in Sunnyvale, California, are refusing to cut down their redwood trees despite a court order sought by their neighbor to remove them so that his solar panels can work.
    • India and France agreed Friday to strengthen military ties and go beyond a ‘buyer-seller relationship,’ India’s prime minister said during a state visit by French President Nicolas Sarkozy.
    Posted in Ongoing Priorities [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.