Responsible and effective Economic Recovery Plan
There is no doubt our nation is dealing with an economic crisis and families are struggling. We must act to stimulate the economy and create jobs now, but we need a responsible and effective economic recovery plan.
A responsible economic recovery plan is targeted, timely and temporary and must include three components: a plan to address the root cause of this crisis--our housing and credit crises; real investment in shovel-ready infrastructure projects; and real tax relief for working families and small businesses.
Tackling the root cause of the crisis
Without addressing the root causes of this crisis--housing foreclosures, and a paralyzed financial system that can't finance new job creation--no stimulus package can succeed.
I'd hate for us to be stuck in recession two years from now and a trillion dollars poorer because we failed to address the root causes of this crisis.
The Telegraph.co.uk printed the following quotes online: "Don't just take our word for it -- World Bank boss Bob Zoellick said last week that if America doesn't fix its banking system, its fiscal stimulus will amount to a 'sugar high'. Dominic Strauss-Kahn, his IMF counterpart, put it even more bluntly. 'If the financial system isn't restructured,' he said, 'all the money from the stimulus will go into a black hole.'"
Real tax relief for working families and small businesses
Significant tax relief for working families would help Americans weather this economic crisis. Also, significant tax relief would help our small businesses, giving them the money they need to protect current jobs, create new jobs and encouraging them to invest in new equipment and hire new employees.
Unfortunately, under the Democrats' plan, workers will receive only an extra $8 dollars per week in their paychecks. This paltry amount not only fails to provide working families relief but is unlikely to do much too boost consumption.
Small businesses fare even worse - receiving less than $3 billion in small business tax relief in the bill (less than ½ of 1 percent of the bill). The Democrats' refusal to help small businesses when they create about three-quarters of new jobs in our economy and all of the net new jobs in 2006 makes no sense. There are many, many narrow provisions that cost more than the tax relief provided to small business.
Real shovel-ready infrastructure investment
America's decades-long lack of investment in infrastructure, in roads, bridges,river navigation and all types of public improvements, is taking a huge toll on our nation's economy. We need to invest in shovel-ready infrastructure to begin repairing our infrastructure. Good roads, bridges, highways and waterways attract and sustain businesses and spur economic development in our communities. Unfortunately, just eight percent of the trillion-dollar bill is for real infrastructure investment. Also, only 13 percent of the appropriated spending for infrastructure and other projects designed to create jobs NOW will occur in 2009!
Too much of the Democrats' trillion-dollar spending bill is non emergency spending. Much of the spending may even be worthwhile - but does not belong in an emergency stimulus bill, such as:
- $ 8 Billion for high-speed rail projects: Democratic leader Harry Reid was able to include $8 billion for high-speed rail projects, an effort to fund the "Sin Train" that will take passengers from Los Angeles to Las Vegas.
- $50 million for an arts endowment
- $1 billion for the census
Massive government expansion and national debt
The Democrats are using what should be an emergency stimulus bill greatly to increase funding for their social spending priorities, efforts that should go through the normal budget process. The Democrats' are using this emergency bill to fund their policy priorities and once the taxpayers are on the hook for these funding increases there is little hope that the funding will ever be removed.
Our current national debt is $10.7 trillion. This bill would add an additional $1.2 trillion to the tab. This trillion-dollar tab will saddle our children, grandchildren, and great grandchildren with crippling debt. And the Democrats aren't even close to being over their spending spree - they are expected to pass a $400 billion omnibus spending bill and a possibly $2 trillion bank rescue plan. The real question is how much debt is too much for Democrats?
Partisan policy making
The Democrats have campaigned on transparency and bi-partisanship--about "changing" the way Washington works. Less than two months later, the Democrats' have already gone back on their promises. Republicans were completely blocked from participating in this process.
The nonpartisan Congressional Budget Office has estimated that after 10 years the net impact on our economy under the most optimistic assumptions will be zero, and in the worst case scenario will result in lower wages and lower productivity as government borrowing displaces private investment. The bottom line - this bill won't work.
And my final word, a trillion dollars is a terrible thing to waste.
Commentary by Missouri Republican U.S. Senator Christopher M. "Kit" Bond