- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

"Stimulus" 101 Update: The Trillion Dollar Spending Plan Passes House

Posted By Rory Cooper On January 28, 2009 @ 7:11 pm In Ongoing Priorities | Comments Disabled

On Wednesday, January 28, the House passed [1] the single largest spending bill in United States history by a 244-188 vote. It remains to be seen where the stimulus is in this bill. Conservative alternatives exist that promise twice the jobs at half the cost, yet the Left continues to support a plan that does little more than advance an ideological agenda of nationalized health care and education.

Small victories have been won.  First, we applaud conservatives for sticking together against a plan that offers no bipartisan solution to America’s economic problems. While bipartisanship was the talking point du jour this week, it was not evident in the actual language of the bill which was written by a precious few.  Second, we applaud President Obama for asking Speaker Pelosi to rightly remove the provisions for family planning and re-sodding the National Mall.  While countless other projects like this remain, it was a welcome sight to see the President in total agreement on these two, when pressed.  Third, we applaud the bipartisan spirit in the U.S. Senate when they joined together to support one more year of relief from Alternative Minimum Tax. Despite the Obama Administration urging them not to do so [2], Senators from both sides of the aisle were able to see that protecting as many as 24 million working families from tax increases during these tough economic times, is the right kind of ‘stimulus’.

Now the bill moves to the Senate where we hope it will receive more debate, more input and more relief for working families. While we appreciate the enthusiasm by the Left to enact their liberal agenda as quickly as possible, a stimulus bill should create jobs not push social programs. While Congress rallies against corporate bonuses and jets, they should also refrain from rewarding themselves with a One Trillion Dollar Signing Bonus.

Below is an updated ’101′ index as to why Spending Does Not Equal Stimulus:

HIGH COST TO AMERICAN TAXPAYERS

  • After Congress appropriates the FY’09 omnibus bill, they may have spent over $1.6 Trillion in less than one month!
    The current “stimulus bill” is on track to be the LARGEST SPENDING BILL EVER enacted by Congress, making the New Deal look small in today’s dollars. 2010 spending in this bill is more than double New Deal spending in 1936.
  • According to the Congressional Budget Office [3], the cost of borrowing this money is estimated at over $347 billion, bringing the total cost of the spending package to well over $1.1 Trillion.
  • The “Stimulus” Bills Your Family – $819 Billion is equivalent to borrowing $10,520 from EVERY FAMILY IN AMERICA. This borrowed money is equivalent to what the average family spends on food, clothing, and health care [4] in an entire year.
  • If Government Spending solved recessions, we would never have recessions.

BAD IDEAS – “THE DEVIL IN DISGUISE”
The hidden liberal policy agenda inside the ‘stimulus bill’:

  • Over $142 Billion [5] in Federal education funds: Nearly double the total outlays for the Dept. of Education in 2007 – making good on Reid-Pelosi-Obama education promises to the NEA.
  • $87 Billion Medicaid bailout: If we keep bailing states out without any accountability, they will have every incentive to continue irresponsible spending. It forces fiscally responsible taxpayers in states, like Indiana, to pay for the fiscally irresponsible decisions [6] by bureaucrats in states like Illinois.
  • Expanded Medicaid coverage and SCHIP: Congress is using the stimulus to push forward their liberal health care agenda. This incremental strategy will ultimately move the country closer the tipping point where government will control more health care spending than the private sector – leaving individuals and families will less control over their personal health care decisions.
  • Green Jobs?: The myth of ‘green jobs’ [7] merely means replacing one job lost, with a new job that fits the left’s agenda. It is a zero sum game. More than doubling spending, the stimulus also has over $35 billion for the Dept. of Energy. DOE’s current budget is $23.8 billion.
  • Redistribution: Refundable “Make Work Pay” Tax Credits [8] for people who don’t pay taxes
  • Pork Spending: TV Coupons ($650 M), Nat’l Endowment for the Arts ($50 M), Hollywood ($246 M)

BAD RESULTS

  • No Jobs: While they have not been able to support these claims, Pelosi/Obama promise between 3 & 4 million jobs, yet House Tax Committee staff can’t estimate even ONE job will be created.
  • Ineffective: The Congressional Budget Office estimates that only 52% of the spending in the ‘stimulus’ bill can even be spent by the end of FY’10. Well short of the 75% benchmark.

“We have tried spending money. We are spending more than we have ever spent before and it does not work.” – FDR’s Treasury Sec. Henry Morgenthau Jr., architect of the New Deal.

BETTER IDEAS – TWICE THE JOBS, HALF THE COST

  • Make the 2001 and 2003 Tax Cuts permanent, instead of raising taxes in 2011; Reduce Marginal Tax Rates for Individuals and Businesses by 10% creating new jobs. Adopting just this one proposal would create between 500,000 and 1 million jobs in one year [9].
  • Reduce the Death Tax to at least 15% ($5 mil. individual exclusion)
  • Enact long-term reforms and budgets for entitlement spending, putting long-term obligations from Social Security, Medicare and Medicaid, front and center in the budget process.
  • Assess and enforce long term spending rules [10] in Congress. Get us out of debt!

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/01/28/stimulus-101-update-the-trillion-dollar-spending-plan-passes-house/

URLs in this post:

[1] passed: http://www.google.com/hostednews/ap/article/ALeqM5hEx3tiPJhZQLVqjNmHR_oP6FZMuwD960EG000

[2] not to do so: http://www.bloomberg.com/apps/news?pid=20601087&sid=ahP7KDbZQ4MY&refer=home

[3] According to the Congressional Budget Office: http://www.newsmax.com/insidecover/stimulus_bill_trillions/2009/01/28/176063.html

[4] food, clothing, and health care: http://www.heritage.org/Research/Economy/wm2242.cfm

[5] $142 Billion: http://www.heritage.org/Research/Education/bg2233.cfm

[6] fiscally irresponsible decisions: http://www.heritage.org/Research/HealthCare/wm2235.cfm

[7] ‘green jobs’: http://www.heritage.org/Research/EnergyandEnvironment/wm2245.cfm

[8] “Make Work Pay” Tax Credits: http://www.heritage.org/Research/Taxes/wm2240.cfm

[9] 500,000 and 1 million jobs in one year: http://www.heritage.org/Research/Economy/wm2191.cfm

[10] long term spending rules: http://www.heritage.org/Research/Budget/wm2199.cfm

Copyright © 2011 The Heritage Foundation. All rights reserved.