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Christmas in February

Posted By Conn Carroll On January 31, 2008 @ 4:33 pm In Economics | Comments Disabled

Heritage Foundation Senior Policy Analyst Rae Hederman reacts to the Senate’s recently passed stimulus package:

In a period of a sluggish economy, it’s disappointing that the Senate has placed special interests over what is good for the economy. While the stimulus bill passed by the House has many problems, the House bill does not have unnecessary spending and is refreshingly clean of goodies handed to the preferred industries of politicians. The Senate Bill contains billions of wasteful spending that is targeted to industries in the home state of certain Senators such as Sen. Chuck Grassley (R-IA). This is conservatives’ worst fear: a Christmas tree of a stimulus bill laden with goodies for special interests back home.

The Senate bill will also extend unemployment benefits. While this measure is deemed to be temporary, it is doubtful that it will be allowed to expire in an election year and will thus be in existence for several years increasing the cost of the bill. Furthermore, extending UI benefits does not help the economy, since an extension of benefits also extends the duration of unemployment. The UI system was designed to provide workers with insurance against the risk of involuntary job loss, not stimulate the economy.

The inclusion of this extra wasteful spending is one of the reasons that the Senate bill costs over 30% more than the agreement between House Leaders and the White House. The Senate Bill will almost double this year’s deficit. This means that taxes will have to rise in the future to pay for this additional, wasteful spending.


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