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Oh no…not another article on the stimulus package!

Date Published: 05/01/2009

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I am afraid so – the spurious, irrelevant, misinformed, multitude of criticisms to that plan have “stimulated” me to actually examine the plan (no, not all 1100 pages) and evaluate how legitimate are the critiques. Frankly, they are…well, unfounded and disingenuous, to be polite.  And their negativity only exacerbates the critical and declining state of affairs in our country, because a key portion of our problems are psychological as well as pure economics
If you read the financial columns on the internet, as I do, about 95% of the “comments” on the stimulus plan are negative. That would be OK – if those who comment had any positive suggestions, solutions, or constructive ideas. They don’t.  They are essentially right wing ideological rants against Obama, or any government participation in our “free market” system, or complaints on how the taxpayers are subsidizing undeserving others.

Most would not recognize a “solution” to this massive mess left by Bush to Obama, if it came up and bit them in the rear; but then again “solutions” apparently are of little interest to them. Doing nothing or just reducing taxes seem to be their game.

Let me sum it up with a quote from House Minority Leader John Boehner of Ohio who said: “a bill that’s supposed to be about jobs, jobs, jobs has turned into a bill about spend, spend, spend” (note the three ‘spends’). Well, Boehner’s comments have a direct influence in Minnesota, as well, in both the “spend” and “jobs” categories.  It is estimated that Minnesota’s share of the bill would be about $9.1 Billion; and with a state shortfall of $6-7 Billion, the infusion should be welcomed.

Given that, let’s deductively look at Boehner’s three “spends”.  And, to avoid boredom, I will do a little rounding just to make my point. To begin with the bill is now a $787 Billion package.  But, about $300 Billion is in the form of various tax cuts, tax relief, and other tax give-backs. Each Minnesota tax payer gets a $400 credit this year; and couples get $800 in 2010. Republicans not only supported this, they wanted even more. Well, that leaves about $487 Billion in Boehner’s “spend” statement – about 38% gone. One “spend” quickly down…two to go.

Another $40 Billion plus $87 Billion is in the form of various assistance to the unemployed. This consists of help with unemployment benefits, assistance with lost health insurance, and other such aid. Minnesota’s share is about $2 Billion. To be fair, an increase in food stamps is also included. Many plans were considered, but this was the one (and budget) which won most consensuses because of the desperate straits these families are in. Even the Republicans know this was needed, and did not object to its inclusion. I guess that represent another “half spend” in Boehner’s complaint. One and a half to go.

Now this gets a little tricky, because there is still $360 Billion to account for. Starting with the easiest part, $54 Billion goes to the states primarily for education relief. All the State’s are desperate for this type of help, and if House Republicans did not like it, Republican Governors jumped at it. Let’s get it out of Boehner’s “spend” package with a little over $300 Billion left.  Where is that going?

Well, again a large chunk again goes to the states in the form of various state assistance and national improvement projects.  Adding police protection ($4B total); EPA for cleaning up the environment largely at the local level ($9B total); and energy conservation like an $11B upgrade our national electrical grid ($42B total).  The Republicans can complain about these but there is no doubt they add good jobs, jobs, jobs.  Then there is about $90 Billion for direct infrastructure improvement (roads, bridges, etc) -- a portion of the package also supported by the Republicans. Minnesota’s share of the above allocations totals $4.1 Billion – a huge leap forward in helping to repair our crumbling infrastructure.  Together these add up to $145 Billion, which with the other projects both parties generally agreed on, leaves about $155 Billion yet to be accounted for (or less than 20% in dispute by the opposition party).  No small sum, but maybe there is some merit yet left in the balance. Let’s look.

Virtually all of it is in 4 general categories: “Green” (the development of alternate fuels to wean us from foreign oil at $20 Billion; Medical Records (creating a massive national system of digital electronic medicals records to improve delivery of health care) $20 Billion; Transportation (development of high speed trains, and a $22B overhaul of our air traffic control system) $46Billion; and $6 Billion for higher education assistance like Pell grants etc. That adds up $92 Billion – leaving $64 Billion, or 8% of Boehner’s “spend, spend, spend” (actually he now has even less than one “spend” left).  So, where is the “pork” we have heard so much about? Not in the numbers above.

Now, $64 Billion that is not accounted for is not a trivial amount, and some social programs do reside in there. Two of note are Head Start at $4B; and a $25B addition to Bush’s No Child Left Behind to make it more relevant and effective.  Another is $15B for scientific research at various universities, and $1.5B for the National Institute of Health.  Most of the rest is various credits for installing high efficiency furnaces and air conditioning, credits for buying computers, cars etc. But as for “pork”…that is not a accurate criticism.

The Republicans also complain they were not sufficiently consulted. Probably true, but their “solution” was well known: cut taxes!  Clearly that is the Pawlenty solution as well. Well, we’ve been there, done that, and as Obama said, we will NOT go back to failed policies. The Republicans wanted a smaller bill – but even their own conservative economists argued that a significant stimulus was essential to getting the economy jump-started. Additionally, the Republicans (especially in the Senate) did have an opportunity to add amendments, and indeed, two vital amendments were accepted by the Democrats to the final bill. In short, this bill could have some improvements, as all such complex bills require; there will be some administrative glitches; and there undoubtedly will be continuous sniping as the bill unfolds.  But, to say it was about “spend, spend, spend” is simply not true!  It is about “jobs, jobs, jobs” (estimated to be add about 66,000 in Minnesota alone). Look at the facts! And, now it deserves the support of all Americans to see that it succeeds.

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