There was an exchange on Meet the Press yesterday that illustrated why Republicans in Congress opposing the stimulus package are being less than forthright with the American people.
David Gregory: "But you cite Japan. Critics of what Japan did during that decade was that they often, with these stimulus plans, raised taxes at the same time, which sort of leveled out the impact of stimulus. So they're not directly comparable."
Sen. John Ensign (R-Nev.): "Well, well, David, David, taxes are going up in two years. Unless the Bush tax cuts are, are kept where they are today, taxes are going up. So you're going to see the same kind of effect in the United States."
(You can read the transcript of the show here.)
What's the big deal about this exchange? I'll explain in a minute.
With the exception of three Republican senators, no GOP members of Congress are supporting the economic stimulus package advocated by President Obama and most of the Democrats on Capitol Hill. Had the Republicans been honest and said what they really believe, namely that they are committed to continue supporting the "cut taxes, less regulation" mantra that ruled the Bush administration (and got us into this current mess), it would be hard to be too upset with them. After all, they would just be standing behind their positions, no matter how wrong they may be.
But that is not what the Republicans in Congress are doing. Rather, they are taking the disingenuous approach of claiming that they are willing to support a stimulus package, but not this stimulus package, because it is larded with wasteful spending. Their claims are, to use the technical term, a load of crap.
The Republicans are being dishonest in two direct ways: saying that the bill is wasteful, and saying that they are willing to support the "right" stimulus package.
As for waste, the House proposal contained money for some programs the GOP wasn't happy with (e.g., birth control, restoring the Mall in Washington, D.C.). But those expenditures represented a tiny fraction of the total package, and other supposedly wasteful programs were made up by the Republicans. The Republicans were using these proposals as wedge issues to impugn the rest of the legislation. The bill was aimed toward infrastructure projects, benefits (like food stamps and extension of unemployment benefits) and other programs that directly generate spending and jobs, as well as programs (like Pell grants and green energy) that would have long-term financial benefits (after all, Pell grants are automatically spent on education). Oh, and yes, hundreds of millions of dollars in tax cuts to try and appease Republicans, even though Moody's has written that tax cuts are the least efficient way to boost spending.
Is the House or Senate bill perfect? Of course not. But it is far from an earmark-laden, pork-filled piece of legislation, like the Republicans would have you believe. Considering the magnitude of the crisis facing the country (nearly 600,000 jobs lost last month, with unemployment up to 7.6 percent), and considering that economists across the political spectrum have come out in favor of a stimulus initiative, it is hardly outside of the mainstream to support such legislation. But if you listen to the GOP, it's as if the current bill is filled with bridges to nowhere. Their rhetoric is irresponsible. If they want to oppose the idea of a stimulus package? Fine. Roll the dice with the voters. But they know it would be political suicide to do so, so they've settled on being dishonest about the legislation the Democrats have come up with.
And the Republicans are not being truthful when they claim they would support the right stimulus bill. What makes me say that? Because when you listen to their arguments, their version of a stimulus package is a load of tax cuts, which, again according to Moody's, would not create the consumer spending needed to boost the economy. They don't really support stimulus. They support tax cuts that they call stimulus.
It's clear that Republicans have gotten their talking points. All over the media you hear the same terms over and over again come from their mouths: "tax credits," "small business" and "more government." On This Week, new Republican National Committee chairman Michael Steele talked about "tax credits" to help "small business" as being the key to stimulus. He even made a laughable point that the Democrats' stimulus bill doesn't create jobs, but only "work." Steele explained that the government-supported projects would only be temporary (like 18 months), which is not a job. I'm sure unemployed workers will feel great relief that Mr. Steele is trying to save them from 18 months of wages, rather than the zero dollars they are making now.
On Meet the Press, Mike Pence, a Republican House member from Indiana, dutifully talked of the Democrats trying to solve problems with "more government," the need to help "small business," and how the best way to "jolt a free market economy" was through... tax cuts. Pence said:
"With, with all due respect to the president of the United States, the ideas, the worn-out ideas that the American people are tired of is runaway federal spending. I believe the American people rejected that under Republican control, and I believe that's the reason why support for this stimulus bill is collapsing by the hour."
Is Pence delusional? The American people had an opportunity in November to say exactly what they were and were not tired of, and they chose Barack Obama and increased majorities for the Democrats in the House and Senate. In other words, they chose Obama's vision of stimulus spending to jolt the economy over the McCain vision of more tax cuts. With all due respect to Rep. Pence, what the American people are tired of is Republicans pushing the warn-out idea of more tax cuts.
Oh, and by the way, Pence is wrong about support for the package. A new Gallup poll shows that 67 percent of Americans approve of how President Obama has handled the efforts to pass a stimulus package, while only 31 percent approve of how the Republicans in Congress have handled the issue (with a whopping 58 percent of respondents disapproving of the GOP).
Which brings me back to Ensign's comment on letting the Bush tax cuts expire. Again, he said, "Unless the Bush tax cuts are, are kept where they are today, taxes are going up." As President Obama made clear in the campaign, the only group affected by the expiring Bush tax cuts would be those people making more than $250,000 per year. And House speaker Nancy Pelosi, who advocated ending the Bush tax cuts early, also only pointed to those people with annual earnings of more than $250,000. Since the stimulus isn't aimed at the higher earners, the sunsetting Bush tax cuts would have no effect on the stimulus plan, and Ensign's parallel to the Japanese example is, as David Gregory pointed out, not applicable.
But even more than Ensign being wrong on the facts, his statement revealed exactly who the Republicans are looking out for. It's not the millions of Americans who have lost their jobs in the last several months, nor the millions of others hit by the weakened economy. No, Ensign's concern is for those making more than $250,000 a year. When the Republicans say they would support the "right" stimulus plan, they are really saying they would support more tax cuts. But we have all learned from the debacle of the Bush years that simply cutting taxes, mostly for the wealthy, doesn't do the trick. Those tax cuts turned surpluses into deficits and, when combined with the rest of Bush's economic policies, ran the economy into its worst state since World War II.
As President Obama and the Democrats in Congress move forward on passing the stimulus bill in the Senate, reconciling the Senate and House versions, and then passing the final bill, it is important that they not get sucked into the Republicans' deceptive rhetoric on the issue. It's hard to act in a bipartisan way when the other side is pretending to work with you while actually trying to bring down your legislation and insert their own failed policies instead. If you look closely at what the Republicans are saying, this isn't a debate on the merits of this stimulus legislation, but rather another round of policy battles fought during last year's campaign. The Democrats won that battle in 2008. They don't have to win it again now. They have a mandate from the voters to get a stimulus program done. I just hope they realize that.
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