Stimulus Plan Could be Better
By Alan Stewart Carl | Related entries in Congress, Economy, NewsWe all knew there would be a stimulus package coming out of Congress. The question wasn’t “if†but “how much.†Now that there are specifics, we can add another question: is it worth it?
Republicans are crying that the bill is pork-laden and advances liberal interests over the national interest. But the Wall Street Journal hits on the key problem:
According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill’s $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing given that Congress’s justification for passing this bill so urgently is to help the economy right now, if not sooner.
Like many, I was under the assumption that much of the stimulus would go to infrastructure improvements. While those would take awhile to get going and would create a mess of appropriations (some of which would be pure pork), improving our roadways and utilities is something we need to be doing anyway.
But the bill, as it is now, only includes $30 billion for highway construction. That’s out of $550 billion in funds Congress wants to divvy out. That’s a paltry sum. Where is the rest of the money going? Unemployment insurance. Renewable energy funding. Scientific research. Etc.
Each initiative will have to be assessed on its own merits, but increasing unemployment insurance is, at best, a stopgap and a shoddy one at that considering how many temporary workers, part-time workers and self-employed workers cannot access those benefits. And renewable energy research and other scientific pursuits, while laudable, will hardly create large numbers of jobs for the blue collar and service industry workers most affected by this recession.
Despite my fiscal conservative leanings, I am willing to support a stimulus plan, even a sizable one. But I question the efficacy of the plan currently on the table. In our rush to do something, anything, we must make sure we’re not doing the wrong things. Congress should spend more time debating and rewriting this bill before sending it to the president.
UPDATE/CORRECTION:
The situation with the CBO report is not as cut-and-dry as the Wall Street Journal made it appear (The CBO Report That Never Was), a fact I missed due to the problems with this site.
Nevertheless, I remain skeptical that the current plan is as strong as it could be and definitely believe continued debate is necessary and more money for infrastructure (and less elsewhere) would improve the bill.
This entry was posted on Monday, January 26th, 2009 and is filed under Congress, Economy, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
January 26th, 2009 at 9:33 pm
Didn’t the CBO come out Friday and say that no such report exists. That the report everyone is referring to is one that only looked at a specific element of a previous stimulus plan.
“Reports of a recent study by the Congressional Budget Office, showing that the vast majority of the money in the stimulus package won’t be spent until after 2010, have Democrats on the defensive and the GOP calling for a pullback in wasteful spending.
Funny thing is, there is no such report.
“We did not issue any report, any analysis or any study,†a CBO aide told the Huffington Post.
Rather, the nonpartisan CBO ran a small portion of an earlier version of the stimulus plan through a computer program that uses a standard formula to determine a score—how quickly money will be spent. The score only dealt with the part of the stimulus headed for the Appropriations Committee and left out the parts bound for the Ways and Means or Energy and Commerce Committee.
Because it dealt with just a part of the stimulus, it estimated the spending rate for only about $300 billion of the $825 billion plan. Significant changes have been made to the part of the bill the CBO looked at.
The CBO numbers were given to a small number of congressional Democrats and Republicans, but were not posted online because they’re not an official CBO product. (Media outlets, while reporting widely about the “report,†have declined to post it online. Here’s the whole thing.) Democratic aides say they are certain that the GOP leaked it to the Associated Press in order to undercut the spending portion of the stimulus.”
January 26th, 2009 at 11:26 pm
Yep, the Republican claims about the CBO report is bogus as most of their claims turn out to be. Here is the MediaMatters article on it.
January 27th, 2009 at 6:49 am
Yes, everyone knows Republicans always lie and Democrats are perfect angels. We have never seen irresponsible media coverage from anyone favoring the Democrats (ok, there’s that Dan Rather thing, and the New York Times on McCain’s alleged affair, and…)
I’m kidding of course. Yes, the Washington Post should be ashamed of this misreporting, but these attacks based only on party alone are tiresome.
January 27th, 2009 at 11:58 am
Regardless, infrastructure spending takes a long time to get going. Years. If the idea is to stimulate the economy quickly, infrastructure jobs aren’t the way to go. I think we’ve seen a precursor to this with the financial market bailout. Billions have been pumped in but hardly anything is reaching/impacting the average citizen.
January 27th, 2009 at 1:11 pm
I will not vote for any Republican that votes for this “stimulus” plan. It is neither a stimulus, nor a plan, but a useless capital outlay for misguided liberal nostalgia. Any Republican that does vote for it will need their own stimulus plan to finance their next primary.
January 27th, 2009 at 3:17 pm
“Regardless, infrastructure spending takes a long time to get going.”
Actually, many of the infrastructure projects are already in the pipeline. They were ready to go when funding disappeared last year. Once funds are available, the projects will be online quite quickly.
January 27th, 2009 at 5:05 pm
Infrastructure takes a long time when compared to tax cuts, which can be immediately injected into the economy via checks. I think that’s what Alan meant.
January 27th, 2009 at 9:17 pm
mp is right. There are lots of projects that have been in the works and are in limbo awaiting funding. New infrastructure is not the same thing as infrastructure repair and the claims being put forth about how long all of the proposed infrastructure spending will take forever to affect the economy tries to pretend otherwise.
January 29th, 2009 at 12:58 pm
There is more to infrastructure than just building roads and schools. Scientific research could help to improve the efficiency not only in the building of roads and schools, but also to other infrastructure including our water and public waste systems, our aging power grid, and our overall energy system. These things would reduce cost and waste long term. And considering we just shed half a million jobs in a week, are you really criticizing unemployment insurance? It sounds like one of the few thing in the bill that will be useful in the short-term.
February 4th, 2009 at 12:45 am
Yes. I agree. I rather fall on the cautious side. I wish to see more of a level headedness. What ever this government does now, it will effect all our lives for the next decade to come. It would be silly to play blame games, when many Americans are still losing their jobs. I am one of those, having been laid off. Yet I am in the belief that we should be careful to chop up any pork and feed us what we need.