Thursday, February 12, 2009

Notes on the stimulus bill

By Joel Wendland

The Republicans in Congress hated the economic recovery bill from the beginning. I think it reminded them too much of the past eight years and Bush's failure to handle economic matters in any intelligent way. It reminded them of how they toed Bush's economic line without deviation and voted for every single one of his budgets and his $3 trillion war in Iraq blindly. It reminded them of all the reasons they lost power.

This psychological turmoil combined with the humiliation of the loss in November prompted a bad decision-making process on how to handle the new political and economic reality in the country. When Obama and the Democrats introduced the stimulus package, top Republicans said to each other, let's fight the election battle all over again. Let's put our free-market fundamentalist, trickle-down ideology and policies that lost us the election out front – even with John McCain leading the way – and have it out all over again with Barack Obama.

So McCain led the way with an amendment to the stimulus bill that would have cut all the job-creating provisions in favor of hundreds of billions in new tax cuts for the wealthiest Americans. Needless to say, it flopped.

Other Republicans had other ideas. They have been a little trickier. They wanted to influence the outcome of the bill without having to actually vote for it.

Republican Sens. Tom Coburn, Chuck Grassley, Johnny Isakson, Mel Martinez, and David "DC madame client" Vitter added their own amendments or co-sponsored other amendments that were ultimately adopted to the bill and finally passed.

So much for the argument that the bill lacked bi-partisan input. Ironically, none of these Senators voted for final passage. Each one, instead, claimed the bill lacked bipartisan support and cost too much.

Funny claim, because two of those amendments offered by Republicans with bipartisan support added something like $100 plus billion to the final Senate version of the bill. One of those provisions actually would have provided $30 billion or so for a housing tax credit. They claimed it addressed the country's housing problems. In fact, the bill would have given a $15,000 tax credit to real estate speculators trying to take advantage of falling house prices by buying foreclosed homes on the cheap and flipping them for quick profits, and the government, under the Republican amendment would guarantee them a $15,000 profit for each house -- paid for by taxpayers.

That scheme wouldn't have fixed "the housing problem"; it would have exacerbated it. In fact it would have robbed taxpayers to pay off speculators.

But even with that Republican amendment, those Republicans who insisted it was meant to fix housing failed to vote for final passage of the bill.

(Note: the compromise package hammered out in conference Wednesday evening cut that $30 billion tax credit to $2 billion and reasonably limited it to first-time home buyers and imposed an income cap on who could claim the credit.)

Even more ironically, after the group of five Republicans named here (and probably more I have overlooked) added their amendments and raised the price tag of the total bill by more than 12 percent, most Republicans refused to vote for the bill.

Guess what their argument was. You got it. It cost too much and raised the deficit too much. This only shows a deficit in the Republican thought process. Their tax cut policy and war in Iraq added more than $5 trillion to the national debt after Bush inherited a surplus. Their tax policies delayed economic recovery after the 2001 recession for more than four years. Their economic policies and ideology of free-market fundamentalism handed the big banks the keys to the kingdom. They looked the other way as bankers robbed home buyers and made business decisions that caused the credit meltdown and the current economic collapse.

I don't envy Barack Obama the political and economic difficulties under which he leads this country. But the Republicans have proven, if nothing else, the bankruptcy of their ideas and the hypocrisy of their politics.