Stimulus Bill Is Wrong Approach For Taxpayers, Economy

February 16, 2009

As our economy has slowed and more Americans have lost their jobs, members of Congress and the Obama Administration have debated a plan to help provide stimulus to our economy.  The recent announcement that 600,000 Americans lost their jobs last month only underscored the need for something to be done quickly to help workers get back on their feet.

Despite an agreement by leading economists that an effective stimulus bill must be targeted, temporary, and timely, Congressional Democrats last week were poised to pass a bill that could better be described as slow, unending, and unfocused.  As this column was written, the House and Senate were on the verge of passing a plan that costs taxpayers at least $1 trillion on things that will do very little to create jobs.  I opposed this poorly-crafted bill because I believe we could have done more to jumpstart the economy while at the same time being better protectors of taxpayers’ dollars.

                                     TOO MUCH SPENDING
Rather than being laser-focused on job creation, the Democrats’ plan centers too heavily on welfare spending and other programs that will not create jobs.  In a memo released last week, the Heritage Foundation stated that the Senate-passed version of this stimulus plan would “add nearly $800 billion in new means-tested welfare spending over the next decade.”  The article went on to say that “the cost of the new welfare spending amounts, on average, to over $10,000 for each family paying income tax.” 

Because of this unfocused spending approach, the non-partisan Congressional Budget Office estimates that this plan will cost taxpayers between $100,000 to $300,000 per job.  As I shared with my Senate colleagues, it is hard for me to tell hard-working Mississippians that the most efficient use of their tax dollars is to spend up to $300,000 to create just one job. 

In addition to the high per-job cost, this plan represents a bad investment for Mississippi taxpayers in terms of the federal funding we would receive.  It has been reported that this package would mean $1 to $2 billion for our state.  That means as little as one-tenth of one percent of this package would make its way to projects in Mississippi.  A one-tenth of one percent return is not a good investment for Mississippi’s taxpayers, especially when all of this money will be borrowed from China and other foreign governments, adding to our already staggering $10.7 trillion national debt.    

                                      A BETTER PLAN
I supported a Republican alternative plan, sponsored by Senator John McCain of Arizona.  Our plan was more focused on the housing problem, tax relief for working families and job creators, and targeted infrastructure investments.  This plan, which was unfortunately defeated on a party-line 57-40 vote, was aimed at providing the boost our economy needs at half the cost of the Democratic stimulus bill. 

By providing a $15,000 credit for homebuyers, our plan went right at the housing problem and would have encouraged home buying, helping stabilize the market.  We also provided immediate tax relief to the working class, and targeted tax cuts to encourage small businesses to start hiring again.  Finally, our alternative called for targeted spending that would have created jobs quickly by putting an emphasis on legitimate government priorities such as early investment in military equipment and facilities.  These are the types of projects we know will need to be funded in the future, but would create jobs immediately if focused on now. 

Almost every member of Congress supports taking action to strengthen our economy.  I certainly would like to see something done.  But the American people understand the stakes, and they expect us to get this right.  Unfortunately, this plan fails to hit that mark by unnecessarily adding to our nation’s debt with little hope of economic gain.  We simply cannot afford to make this large of a mistake.