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You have all heard the proverb: “Give a man a fish and he can eat for a day. Teach a man to fish and he can eat for the rest of his life.”
The $825 billion stimulus package we voted on Wednesday night is full of fish to hand out, but no fishing rods. I voted no.
In an economic downturn the most important concern for our economy is to get people back to work — in real jobs for real companies. There was simply nothing in this proposal that will encourage small businesses to hire. Business owners look to a predictable future in making decisions about the future of the company. Do they hire? Do they cut back?
In order to encourage hiring, policies must be enacted to give them a predictable future of profits and cash flow. To start we should reduce business tax rates. Our tax rate on business is the second highest in the world. There was nothing in this bill to solve that.
We should make permanent the existing marginal tax rates on income as well as the existing tax rates on capital gains and dividends. That would inspire people to look to the future and invest. This bill did not do that.
The bill did allow for more rapid depreciation to enhance cash flow. That is good. It also allows businesses losing money to go back five years on the tax return and recapture taxes paid in those years. However, this is not looking forward and provides no predictability for the future.
Most of the tax provisions are refundable tax credits, called “Making Work Pay.” This will allow those who pay no income taxes or payroll taxes, due to the Earned Income Tax Credit, to get a government check. We will increase the numbers of citizens getting a check from the government in excess of all payments to the government from the current 15 million to 22 million. Only by laughingly calling that a “tax cut” can we say that 95 percent of all American families will get a tax cut.
The spending provisions are, for the most part, normal government costs that will be paid early. Rehabilitation of buildings and parks and military maintenance funds take up a considerable part of it. There is a reason for putting routine expenditures in an “emergency” stimulus package. The cost is off budget and does not have to be offset. (You may recall the promise Democrats made two years ago to commit to “pay as you go.” By calling this “emergency spending,” so-called paygo no longer applies.)
Second, by getting all of these routine needs out of the way they will not be around in future congresses crowding out new ideas for spending. And third, they can pay off Democrat constituencies. Food stamp increases; extending eligibility for unemployment payments; money for the arts; block grants to big city mayors; funding for Head Start, public housing, and the homeless; and billions to genuflect before the altar of global warming — all as “stimulus.”
This bill even adds $1 billion, on top of last year’s $5.1 billion, to the Low Income Heating Assistance Program. LIHEAP was a temporary program started in 1979 to help low-income seniors in the Northeast pay their heating bills due to cost increases from the oil embargo. Georgia will receive about $74 million in FY 09 for air conditioning costs. So much for heating. So much for temporary.
Much of the lead-up to this package has dealt with needs in roads and infrastructure on “shovel ready” projects. Less than $30 billion will be spent on roads.
During the Ways and Means Committee mark-up on the bill, Rep. David Camp (R-MI), the lead Republican on the committee, asked the staff director of the Joint Committee for Taxation if there was any evidence before us that would prove that this package would produce even one new job.\
He responded, “No.”
• John Linder, a Republican, represents Georgia’s 7th Congressional district. |