For weeks, every economist worth his salt has been saying Congress needed to be bold in crafting the stimulus package needed to revitalize the economy.
So what did a supposedly bipartisan group of senators do when the stimulus bill came to the floor? They began whacking away at it to bring the legislation down to less than bold proportions.
As this issue went to press, the senators were trying to agree on spending provisions “that truly help stimulate the economy,” as Sen. Susan Collins, R-Maine, said. Collins, Democrat Ben Nelson of Nebraska and others reportedly were planning $90 billion in cuts.
As they met, the U.S. Bureau of Labor Statistics announced the country lost another 598,000 jobs in January, 207,000 of them in the manufacturing sector. Those losses bring the total for the period since January 2008 to 3.5 million and unemployment to 7.5 percent.
The debate seemed to break down along philosophical lines with Republicans arguing for more tax breaks and Democrats pushing for funding for education, health care and much-needed repairs of the nation’s infrastructure.
Former Republican presidential candidate John McCain of Arizona tried to offer a substitute stimulus plan that would have lowered the total investment to $421 billion, an amount most economists consider laughable. The Democratic majority refused to allow a vote on it.
The Senate also rejected an amendment that would have subsidized 30-year fixed home mortgages to lower interest rates to 4 percent to 4.5 percent with Democrats reminding their opponents that loose lending practices helped get us in this mess.
One economist said proponents of a smaller stimulus package seemed to have forgotten the economy’s desperate straits, reverting instead to “spouting old clichés about wasteful government spending and the wonders of tax cuts.
“It’s as if the dismal failure of the last eight years never happened,” said Paul Krugman. “Somehow, Washington has lost any sense of what’s at stake — of the reality that we may well be falling into an economic abyss, and that if we do, it will be hard to escape.”
Senators also have been debating “Buy American” provisions, which would require the use of iron, steel and goods made in America in the stimulus bill’s public works projects and U.S. textile products in uniforms procured by the Transportation Security Administration.
Advocates say the provisions would help create jobs in this country rather than “continuing to ship them overseas” as American business has been doing with depressing frequency in the last several years. Critics claimed the requirements would be protectionist and would raise the cost of already expensive infrastructure projects.
The latter reminded me of the oft-parodied rejoinder “Will the last person leaving New York, please turn out the lights” when that city was on the verge of bankruptcy in the 1970s. One of those “bipartisan” senators may have to turn out the lights if something isn’t done to reverse the direction of the economy soon.