A 40-YEAR WISH LIST
January 29, 2009
The 647-page, $825 billion House legislation is being sold as an economic "stimulus," however, it appears to be a wish list for every pent-up Democratic proposal of the last 40 years, says the Wall Street Journal.
Some of the things Congress plans to spend money on:
- $1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years.
- $2 billion for child-care subsidies.
- $50 million for the National Endowment for the Arts.
- $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects.
- There's even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.
In selling the plan, President Obama has said this bill will make "dramatic investments to revive our flagging economy." However, according to the Journal:
- Some $30 billion, or less than 5 percent of the spending in the bill, is for fixing bridges or other highway projects.
- There's another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.
- Add the roughly $20 billion for business tax cuts, and only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus.
And even many of these projects aren't likely to help the economy immediately, says the Journal. As Peter Orszag, the President's new budget director, told Congress a year ago, "even those public works that are 'on the shelf' generally cannot be undertaken quickly enough to provide timely stimulus to the economy."
The larger fiscal issue here is whether this spending bonanza will become part of the annual "budget baseline" that Congress uses as the new floor when calculating how much to increase spending the following year, and into the future. Democrats insist that it will not. But it's hard -- no, impossible -- to believe that Congress will cut spending next year on any of these programs from their new, higher levels. The likelihood is that this allegedly emergency spending will become a permanent addition to federal outlays -- increasing pressure for tax increases in the bargain, says the Journal.
Source: Editorial, "A 40-Year Wish List; You won't believe what's in that stimulus bill," Wall Street Journal, January 28, 2009.
Browse more articles on Tax and Spending Issues