Everyone – both sides of the aisle – agree that this crashed economy needs some serious remedies, and fast. But there are growing feelings, Republican and Democratic alike, which address a concern that the $819 billion bailout bill (the American Recovery and Reinvestment Plan passed by the House on the 28th without a single Republican vote ) has too many elusive and questionable short-term band aids – like individual tax cuts/rebates that represent a very transitory and questionable impact on a soured economy – and lack the longer-term job-creating efforts that were so heavily stressed earlier in the discussions about a stimulus package – only a small part of this massive package is allocated to the much-touted effort to build and repair infrastructure (for example, out of $825 billion, there is only $30 billion set aside for roads and bridges, $9 billion for public transit and $1 billion for inter-city rail transportation… less than 5% of the total).
The January 28 Washington Post summarized this disappointment with the tax policies with a quote from Rep. Peter A. DeFazio (D-Ore.): "Every penny of the $825 billion [the earlier valuation of the plan] is borrowed against the future of our kids and grandkids, and so the question is: What benefit are we providing them? What are we doing for the country? It's the difference between real investment that will serve the nation for 30, 50 years and tax cuts, and that's a very poor tradeoff… I go to my district and people say, 'Yeah, I can use 10 extra bucks a week, but I would rather see more substantial investment.' We've gone through a couple bubbles that were borrowing and consumer-driven. We want a recovery that's solid and based in investment and productivity, and that points us at building things that will serve us decades to come."
The Post also presented a similar view from the other side of the aisle: Rep. John L. Mica (Fla.), the ranking Republican on the transportation committee, who suggested that the administration’s infrastructure component was "almost minuscule." He noted that "They keep comparing this to Eisenhower, but he proposed a $500 billion highway system, and they're going to put $30 billion [in roads and bridges]... How farcical can you be? Give me a break."
Administration officials (most notably Lawrence H. Summers, Obama's chief economic adviser) claim that investing in infrastructure is being delayed because of their perception that there is a lack of “shovel ready” projects, but many feel betrayed that the “big promise” of infrastructure development has all been abandoned in this budget proposal. Other fundamental long-term issues are being addressed; energy efficiency is getting $50 billion, and there are allocations of $20 billion to begin the process of making medical healthcare records more centralized, uniform and efficient, $15.6 billion in Pell grants for college students, $6 billion for modernizing college buildings and more for scientific research.
Education is the big winner as the proposed stimulus package, according to the January 28 New York Times, “would shower the nation’s school districts, child care centers and university campuses with $150 billion in new federal spending, a vast two-year investment that would more than double the Department of Education’s current budget.” Education is the cornerstone of our future, money very well spent.
Of the immediate and necessary arenas of the spending proposal is the “$300 billion in aid for laid-off workers and budget-strapped states (for food stamps, temporary health coverage, increased unemployment benefits, Medicaid funding, schools and police), expenditures that many economists agree will enter the economic bloodstream quickly and trim further layoffs by state governments.” (The Post) Some first aid is obviously necessary, and one would also hope that the remaining TARP money can be used in significant part to stop the continuing plunge of home values, possibly incorporating programs presented in earlier blogs.
But with tax cuts guzzling $275 billion, it would seem that some if not all of this money could be allocated to more relevant and sustainable job-creation and long-term infrastructure development that would represent the genuine legacy of a successful rescue plan. What’s your opinion?
I’m Peter Dekom, and I approve this message.
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