President Obama’s economic adviser, Lawrence Summers, said that any stimulus bill should be targeted, timely and temporary.
The 647-page, $819 billion bill that passed the House — close to what the Congress spends to run the government in a normal year — sprawls all over the place, defers major spending to a time when we hope the recession has run its course, greatly expands the federal government’s role in health care, education and energy, and much of the bill is not likely to be temporary.
President Obama asked that the bill not include earmarks, but in a distressing sign that the Democrats won’t listen to him on spending any more than the Republicans listened to George W. Bush, the bill is loaded with special interest provisions for everybody from the people who repair yachts to the makers of TSA uniforms.
And the Senate version of the bill promises to be even larger. There is no plan in either bill on how to pay for all this spending, other than adding the cost to the national debt, and there is no plan on how to wind it down when the economy starts recovering.
If, as forecast, the current quarter is the low point of the recession — and we all hope it is — much of the stimulus is already tardy; $290 billion of the package won’t be spent until 2011 or later
Some of the provisions set significant and expensive precedents. At a cost of $40 billion, the government would allow unemployed workers to enroll in Medicare in certain circumstances and it would pay 65 percent of the COBRA benefits for others. For laid-off workers 55 or older it would subsidize those benefits until the worker was eligible for Medicare. It will be politically difficult to let this provision expire in two years and we may be backing into a costly new entitlement program.
The bill more than doubles spending on the Department of Education but without any enforcement to guarantee we get something for all that money in terms of higher test scores and better graduation rates. And, armed with $21 billion, the federal government will be a major force in school construction and repair, another benefit that will be politically difficult to take back in the future.
A key part of the plan is a $500 per worker, $1,000 per couple cut in the payroll tax, which will cost the Treasury $145 billion, but the cut will come to about $20 a week, hardly enough to send strapped citizens out to buy cars and appliances. And it doesn’t begin until June.
Perhaps it’s too late in the game to stop this juggernaut, but the Congress should take a deep breath and then go back and carefully reconsider whether all this spending is needed or even desirable. And somebody should be asking: What if it doesn’t work? What are we left with then?