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Is it Pork or Stimulus?

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It’s Pork -- Not Stimulus

This is pork, not stimulus. A look at where much of this money is going for makes me wonder how this can possibly stimulate the economy or create permanent jobs, It looks like a piggy bank for special interests.

Louis P Sheldon

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The House of Representatives voted 244-188 to pass President Obama’s massive spending program. Not one Republican voted for this irresponsible bill and were joined by 11 Democrats. House Republican leader John Boehner described the vote as a bipartisan rejection of a partisan bill

Obama’s $825 billion wild spending spree to “stimulate” the economy, is just old-style pork barrel spending. The bill will use borrowed funds and will increase the federal deficit to $2 trillion dollars this year.

In fact, the $825 billion is actually $1.1 trillion with interest payments on it, according to the Congressional Budget Office.

“This is pork, not stimulus. A look at where much of this money is going for makes me wonder how this can possibly stimulate the economy or create permanent jobs,” said Traditional Values Coalition Executive Director Andrea Lafferty. “It looks like a piggy bank for special interests.”

Rep. Peter King of New York says Obama’s so-called stimulus package is nothing more than a liberal Trojan Horse for their favorite pet projects. He says the spending should only go to projects that directly impact the economy: Newsmax.com

The Obama legislation will spend billions on:

$335 million for the Centers for Disease Control for Sexually Transmitted Disease education and prevention. Last time the CDC was funded this way, the money was used for homosexual flirting seminars and “Great Sex” events.
$44 million for repairs at the Agriculture Department headquarters in Washington.
$50 million for the National Endowment of the Arts.
$360 million for new child care centers at military bases.
$1.8 billion to repair National Park Service facilities.
$276 million to update technology at the State Department.
$500 million for the Transportation Security Administration to install bomb detectors at airports.
$600 million for General Services Administration to replace older vehicles with alternative fuel vehicles.
$2.5 billion to upgrade low-income housing.
$400 million for NASA scientists to conduct climate change research.
$426 million to construct facilities at the Centers for Disease Control and Prevention.
$800 million to clean up Superfund sites.
$150 million for the Coast Guard to repair or remove bridges deemed a hazard to navigation.
$6.7 billion to renovate and improve energy efficiency at federal buildings.
$400 million to replace the Social Security Administration's 30-year-old National Computer Center.


Republicans Debate Stimulus Package
Little Stimulus – Dozens Of New Federal Programs

Former Congressman Ernest Istook has pointed out that Obama’s $1.1 trillion pork barrel legislation will:

Create 32 new federal programs
Cost the American taxpayer household more than $10,000 each with borrowed money
Includes only 5% of the bill for “transportation infrastructure” – but five times as much money for state and local government bailouts!
Istook notes: “It would require our Treasury to borrow record levels of money from overseas, perhaps more than the world is willing to lend us. It might double our $1.3-trillion deficit that now makes us more dependent on China than any other country.”

Republican Leaders Question Obama Legislation

House Republican Leader John Boehner (R-OH) was on Meet the Press last Sunday to discuss the Obama plan. Republicans offered an alternative proposal to the Obama pork barrel plan. Their plan includes tax relief and reduced spending – not tax increases and more government programs.

According to Boehner:

If we allow American families to keep more of what they earn, they’re going to save it, invest it, or spend it. All of which are good for the economy. And our plan would allow American families, joint filers, to keep almost $3,200, up to $3,200 of their money. They can help multiply the economy, get the economy moving again if the money’s in their hands, and this is why we have Democrats and Republicans in this country because we do look at these things differently. They believe that all of this spending is going to help, some of it on infrastructure if you can get it out the door quick enough will help. But spending $200 million to fix up the National Mall, $21 million for sod, over $200 million for contraceptives, how is this going to fix an ailing economy? … And right now given the concerns we have over the size of this package and all of the spending in this package, we don’t think it’s going to work. And so if it’s the plan I see today, put me down in the no column.
Congressional Budget Office Exposes Serious Problems In Obama Plan

The Congressional Budget Office (CBO) published an analysis of the Obama stimulus plan that exposes serious difficulties with it.

According to the CBO, at least 25% of the proposed $825 billion package won’t take place until after 2010. Most of the $355 billion on highways, renewable energy, and other spending projects wouldn’t happen after 2011. In fact, $53 billion would be spent in 2012 and $63 billion between 2013 and 2019.

The CBO report focused only on the discretionary section of the bill, omitting the $275 billion in proposed tax cuts and $195 billion in mandatory tax increases.

The Associated Press report that only 7% ($26 billion) out of the $274 billion for infrastructure projects would be pumped into the economy by the end of this budget year in September!

According to Republican leaders:

“We want to sit down with the President and talk about our ideas, because it’s clear that trying to get money back into the economy quickly, to preserve jobs and to create jobs, has to be the goal. And fast-acting tax relief, we believe is the best way to do that.

“When it comes to slow-moving government spending programs, it’s clear that it doesn’t create the jobs or preserve the jobs that need to happen.

“So we’re looking forward to hearing from the President. We’d like to sit down with him, to walk through this, because I think we all share the same goals.”
TAKE ACTION: This wasteful government spending bill should not be passed, but it appears likely that it will – with only a small number of the most objectionable spending items removed. TVC urges every supporter to contact their two U.S. Senators and ask that they remove all spending from this legislation that does not go toward job creation or the retaining of jobs in our economy. All other spending for sod for the National Mall, community block grants (ACORN), discrimination against Christianity or other non-job-related funding should be deleted from the bill.

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Whatever You Call It, Don’t Call It A “Stimulus” Plan

How exactly do the tiny tax breaks, big entitlement spending and handing billions to states to “fill budget gaps” accomplish the goal of 4 million new jobs?

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Reaction to the stimulus plan (hereafter which should instead be called the “spending” plan based on the lack of stimulus and heavy dose of spending) has nearly universally been negative this morning.

The problem is that there seems to be very little “stimulus” in the stimulus plan, at least in the way of promoting new spending by companies and individuals. Much of the plan is instead devoted to spending on entitlement programs, schools and other social projects.

Analysis from the New York Times indicates the following about the plan:

An $87 billion provision increasing the federal contribution for Medicaid costs is expected to go a long way to help states close their budget gap
The bill would also create a $79 billion state fiscal stabilization fund, disbursing half the money in late 2009 and half in late 2010. The Congressional Budget Office has estimated that little of that money would be spent this year
The greatest prospect of delay in spending is on infrastructure. The bill provides $30 billion for highway construction and tens of billions more for other transportation projects, water projects, park renovation, military construction, local housing projects and more
A look at more than $140 billion in the bill’s spending on education finds some that can move quickly — for instance, $13 billion each over two years for Title I schools, which serve impoverished students, and for special education under the Individuals With Disabilities Education Act
Unemployment benefit checks due to stop will keep coming, along with an extra $25 a week
At the grocery store, a family of four on food stamps could find up to $79 more a month on their government-issued debit card
Remember the President says his impetus for the plan was to create or save 4 million jobs. In his weekly address two weeks ago the President said “the jobs we create will be in businesses large and small across a wide range of industries. And they’ll be the kind of jobs that don’t just put people to work in the short term, but position our economy to lead the world in the long-term.” How exactly do the tiny tax breaks, big entitlement spending and handing billions to states to “fill budget gaps” accomplish this goal?

The Democrats are using the cover of bashing the morals of those against the plan as a way to silence the critics. Because much of the plan has to do with educational, medical and entitlement plans it is easy to accuse those against the plan of trying to damage “children and the ill.” Good try. No one is suggesting that we as a nation do not have a responsibility to help those in need, let’s not confuse that with “stimulus.” This is instead about comparing the stated goals - the selling points - of the plan to what it is now trying to do. And that is to create jobs and “stimulate” the economy. Nearly $100 billion to health care/medicaid, $140 billion to education and a few hundred bucks back in many taxpayers’ pockets will do nearly nothing to create or save jobs as the President has said.

Moreover, the one thing that may create new jobs and help the country’s future energy needs - building thousands of windmills, solar farms new roads, telecommunications and other types of infrastructure - has mysteriously been put on the back burner. As the Times reports, only $30 billion will go to these types of projects initially and even with the possibility of “tens of billions more” we are still looking at just 15-20% of the plan being put toward projects that can actually create jobs and provide longer term benefits to the economy.

As former Fed Governor Larry Lindsey writes in today’s Wall Street Journal the plan as it is will not work, and he says we need to give more money directly back to the people:

And what of the plan being put forward now? As crafted, it is unlikely to produce the desired results. For a similar amount of money, the government could essentially cut the payroll tax in half, taking three points off the rate for both the employer and the employee. This would put $1,500 into the pocket of a typical worker making $50,000, with a similar amount going to his or her employer. It would provide a powerful stimulus to the spending stream, as well as a significant, six percentage point reduction in the tax burden of employment for people making less than $100,000. The effects would be immediate.

Here is a note sent to me today written by the smart folks over at Bianco Research.

Now that we know some of the details of the economic rescue legislation we know why the Democrats have kept it so private. To help put the items in the bill into perspective we suggest that you use a simple litmus test and judge for yourself how each part of the legislation will help boost the U.S. Economy. That test is simple. Does the subject item have a multiplier effect. If the item does not have a multiplier effect, it’s not a valid stimulus and it doesn’t belong in this bill. We may not all agree on the exact amount of the multipliers, but we should be able to determine if a multiplier exists.

Let me explain. Building a highway from one point of commerce to another should over the life of the highway produce an economic benefit greater than the cost of the construction. Some say the multiplier for new highway construction is from 3 to 5 times the initial cost. The important thing is not that we agree on the exact degree of the multiplier, but that we agree that the expense will stimulate the economy and bring some return in excess of the cost.

Remember, this is an economic stimulus bill. It is not intended (we’re told) to tackle social problems, feed the poor, house the homeless, improve the landscaping in Washington D.C., etc. The President has gone to great lengths to assure citizens that the sole purpose of this unprecedented legislation is to stimulate and jump start the U.S. economy. He promised us that the bill would be free of pork, social programs and pet projects. He went so far as to guarantee the public that he would not sign a bill if it had any pork in it.

So then what’s the multiplier for the $50 million for the National Endowment of Arts? How about the $400 million for global warming research, the $335 million for STD prevention, the $650 million for digital conversion coupons, the $81 billion for Medicaid, the $20 billion for food stamps, the $30 billion for Cobra insurance extensions, the $4.1 billion for neighborhood activist groups like ACORN, the $83 billion for the earned income credit to give tax refunds to people who don’t pay income tax, and the $6 billion to subsidize university building projects just to name a few.

The Wall Street Journal estimates that only 12 cents of every dollar in this bill could be called a growth stimulus. Apply your own judgment and the multiplier test to each of the items contained in the bill and come up with your own estimate. I think that the 12 cent estimate is quite generous.

It was telling that not only did no Republicans vote in favor of the bill, but a few Democrats (notably some of the fiscally conservative “Blue Dog” breakaway group) also rejected this plan. They know that it is unlikely to create jobs and likely more of a gift to the Democratic states that help vote the party into full power.

Now it goes to the Senate, and though some tweaks are expected, expect it to pass. This plan adds another $900-plus billion to the long term obligations of the country and our children. This in addition to the trillions already lent and spent by the government and Federal Reserve. Worse, this spending package comes with little benefit to the kind of real job creation or real technological breakthroughs that America urgently needs. The kind that create real change in our transportation and energy usage. And that’s real depressing.

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