Wednesday, February 11, 2009

Thanks Senate!

The Pittsburgh Trib has a nifty breakdown of the House bill versus the Senate bill. To bring around the stimulus bill to semi-local issues:

First, the Senate decided to remove $25 BILLION in state grants from the stimulus package.

No state block grants = higher state taxes.

But it's okay because we'll all get a $1,000 per couple tax credit for the next 2 years. Don't worry, if you phase out of the tax credit (at a combined income of $140,000), there's a loop-hole for you. The Senate also decided to add a fix to the Alternative Minimum Tax. "The change would save a family of four an average of $2,300." Glad to see we're focused on who needs the money during this recession. How about you save a family of four who's making under $150,000 per year $2,300??? Between those 2 tidbits, we've got $210 BILLION of the stimulus. The Senate and House are ignoring that Bush's stimulus checks did almost nothing to help the economy and the people are not clamoring for a check.

The people were actually excited about the prospect of a major infrastructure investment. The Senate decided to chop out $43 BILLION for rail and general public infrastructure repairs. They leave the infrastructure component at about $55 BILLION or about 6.5% of the package.

But wait, there's also lots of money for energy.

The Senate thought energy was so important they added $11 BILLION to that area. Maybe we'll see some of that trickle down to $25 Million for Pittsburgh LED street lights? Fat chance. Instead the extra money is divided out like this: $4.6 BILLION for fossil fuel research and development; $6.4 BILLION to clean up nuclear weapons production sites.

The Senate also decided to sneak in an auto-makers bailout by allowing folks to deduct interest on their auto loans as well as extending tax benefits to companies losing money. Another $16 BILLION down the drain there. And they'll give all of us a $15,000 coupon if you buy a house in 2009. Except in Pittsburgh where most houses cost less than $150,000 so we'll only get 10%. Another $35 BILLION there.

All in all. This "stimulus" is a gigantic mess that is mostly managing to alienate the American people from their overlords in the House and Senate. With $838 BILLION to play with, you'd think they could manage to please someone. Instead, the Democrats appear to be setting the stage for a major Republican come-back in 2 years.

Of course, at least all this money is being spent in the USA. And I'd rather have a deficit based on spending and tax cuts that benefit my family rather than spending the staggering trillions of dollars on destroying and rebuilding Iraq.

1 comment:

EdHeath said...

You know, the funny thing is that conservatives/Republicans know what’s what, that he House was likely to pass a bill with both long term investment items (like spending on education and healthcare related items) as well as more short term stimulus like aid to States and construction projects like repairing highways and bridges. There was also a lot of tax credits in the House bill (about 40% of the bill?), something Obama wanted, I believe, to make Republicans happy. They were so happy not one Republican voted for the bill in the House. They (conservatives/Republicans) also know that they could hold up the Stimulus in the Senate, and so they got their pound (or tens of billions of dollars) of flesh, adding in the items you described and taking out other stuff. Still, only three Republican Senators voted for the bill in the Senate, and now at least Arlen is looking now like a target for conservative Republican organizations in 2010.

But the Republicans are walking a tightrope. They really want a stimulus passed, but they want it to be ineffective. Then, in a year’s time, as the primaries heat up, the Republicans will start saying “We told you so”. Actually, they want the bill to pass so they can start they told us so immediately. The stimulus only works if people spend and companies decide not to lay people off because demand for goods and services is high. But, a lot of what makes the economy work is expectations, and if the Republicans can lower expectations with rhetoric, then they can keep the stimulus from working as well by lowering the demand component and thus forcing companies to lay off workers. This will make the recession actually worse and set the stage for a Republican comeback in 2010. Minus, one assumes, Arlen Specter.