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February 5, 2009 at 12:35 pm
Apparently, the political definition of comprise is the minority party agreeing to what the majority party wants (and that applies equally regardless of which of our two wonderful parties is in charge). Rushing into things and passing legislation because it “…has to be done before the end of the week…” brought us the TARP and we all know how well that has gone.
The problem is that more folks are learning that what came out of the House is more of a spending package than a stimulus package. A stimulus package needs to target spending and get the money into the needed areas quickly. The House bill simply does not do that. According to the Congressional Budget Office, only one-third of $30 billion proposed by the House for highway construction would reach the economy in the next year and a half.
Among the Senators who have problems with the House bill is Senate Budget Committee Chairman Kent Conrad, D-ND who said, “I have communicated to the administration that there are parts of this (the House) package that don’t meet the test that they themselves established of temporary, timely and targeted.” He was also quoted in a Reuters story as saying, “I would have a very hard time voting for this package as it is.”
The President’s proposed tax credit of $500 for single workers and $1,000 for couples will do little to stimulate the economy. Most economists agree that last year’s rebate checks did little if anything (obviously) to spark a recovery. Such efforts should be targeted at sectors that need assistance.
Two of the ideas the republicans have pushed are tax breaks for car buyers and tax breaks for home buyers. Those are two of the worst performing sectors in the economy and targeted tax credits may do some good. The last I read, tax credits for car buyers is in the Senate version of the bill and I believe a provision that would allow for a tax deduction of auto loan interest.
You can spend all the money in the world (which it appears we are trying to do), but nothing will be fixed until the housing market stabilizes and the financial institutions are on solid ground.