Is this Stimulus or Spending?  You tell me……

The Congressional Budget Office reports that only 7% of the stimulus spending (approx. $358 billion of the total) will be spent this year. By the end of 2010, only 38% will be spent. And by the end of 2011, only 67% will be spent. Here's a link to a Washington Post story about the CBO Report.

Peter Orszag (Office of Management and Budget) contradicted the CBO report, saying that three-fourths of the OVERALL stimulus package (spending + tax cuts) would hit the ground within 18 months. This is a nuanced, subtle way of saying that the TAX CUTS have a more immediate effect than the SPENDING. Here's a link to a Reuters story about Orszag's comments.

A new website: http://www.readthestimulus.org/ encourages someone to read the bill before passing it. The $825 billion stimulus package will exceed more than $1.1 trillion when adding in the interest ($300 plus billion) between 2009-2019 to pay for it.

The stimulus plan includes funding for contraceptives, family planning, Sexual Transmitted Disease prevention, and so forth. (This is NOT an economic issue nor stimulus. It IS spending.)

Some specific line items in the stimulus bill:

• $650 million for digital TV coupons.
• $600 million to buy new cars for the federal government.
• $6 billion for colleges/universities – many which have billion dollar endowments.
• $44 million for repairs to U.S. Department of Agriculture headquarters.
• $200 million for the National Mall, including $21 million for sod.
• $360 million for new child care centers at military bases.
• $200 million for "Leaking Underground Storage Tank Trust Fund Program"
• $14 million for funding the Recovery Act Accountability and Transparency Board and their Independent Advisory Panel which will consist of a total of 12 people.
• $50 million for the National Endowment for the Arts (more than a 30% funding increase).
• $1.1 billion to Amtrak, the federal train service that can't make a profit even during good economic times.
• $30 billion for highway and bridge construction.
• $300 million to upgrade job training facilities that serve unemployed youth. Reducing or eliminating the minimum wage would help these youth find jobs more than a stimulus bill…
• $400 million for habitat restoration projects.
• $4.2 billion for the government to purchase vacant properties to reduce neighborhood blight.
• $1 billion for Community Development Block Grants. This is a catch-all fund for projects that don't fit into other "stimulus" categories.
• $200 million fund for rural areas to build "community facilities," such as for healthcare, education, fire and rescue, day care, community centers, and libraries.

NOT SPECIFICALLY MENTIONED IN THE STIMULUS BILL is a list of 18,750 projects, proposed by the U.S. Conference of Mayors. These are the sorts of projects that mayors said will be funded with money such as the non-descript Community Development Block Grant or the rural development money in the stimulus bill.

• $2 million for North Miami households to switch to energy-efficient light bulbs (how many taxpayers does it take to change a light bulb?).
• $886,000 for a 36-hole "disk-golf" course (Frisbee meets golf) in Austin, Texas
• $33,725 for automatically flushing toilets in Sumter, SC
• $1.4 million children's water park in Pine Bluff, Arkansas
• $500,000 dog park in Chula Vista, California.
• $6 million to construct three aquatics facilities (Olympic pool, waterslide, water playground, bathhouse) in Shreveport, LA.
• $320,000 for lights at the Brockton, Mass. little league ball field.
• $50,000 for two (2) dog parks in Lewiston, Maine.
• $325,000 to buy 25 new cars for the City of Dearborn, Michigan. Automobile industry stimulus?
• $1.5 million to replace the Roseville, MN, golf course clubhouse and maintenance shop.
• $50,000 to purchase two (2) police cars for town of Friars Point, MS.
• $60,000 to hire two (2) new police officers in Friars Point, MS to drive the two (2) new cars.
• $250,000 to replace gymnasium floor and repaint South Rocky Mount, NC Community Center
• $500,000 for public marina floating docks in Elizabeth, NH
• $6 million for the Hawaiian Ocean View Estates Hurricane Shelter and Community Center
• $1 million to seal coat the streets of Idaho Falls, Idaho.
• The adult entertainment industry also requested $5 billion of the funding, but that didn't show up in anyone's stimulus plan.

The plan establishes at least 32 new government programs at a cost of over $136 billion. That means more than a third of this plan's spending provisions are dedicated to creating new government programs.

The plan increases spending in at least 150 different federal programs, ranging from Amtrak to the Transportation Security Administration. Is this the "targeted" plan Democratic leaders promised?

The total cost of this one piece of legislation is almost as much as the annual discretionary budget for the entire federal government.

The bill will cost each and every household $6,700 in additional debt, paid for by our children and grandchildren.

The bill provides enough spending – $825 billion – to give $2,700 to every man, woman, and child in America.

$825 billion is enough to give every person living in poverty in the United States $22,000.

Although the stimulus bill has been billed as a transportation and infrastructure investment package, in actuality only $30 billion of the bill – or three percent – is for road and highway spending. A recent study from the nonpartisan Congressional Budget Office found that only 25 percent of infrastructure dollars can be spent in the first year, making the one year total less than $7 billion.

Much of the funding within the House Democrats' proposal will go to programs that already have large, unexpended balances. For example, the bill provides $1 billion for Community Development Block Grants (CDBG) – a program that already has $16 billion on hand. States also are sitting on some $9 billion in unused highway funds – funds that Congress is prepared to rescind later this year.

All board members of the "Accountability and Transparency Board" created by this legislation are appointees of the President; none will be appointed by Congress.

A scant 2.7 percent, or $22.3 billion of the overall package, is dedicated to small business tax relief.

The Joint Committee on Taxation estimates that the legislation increases by seven million the number of people who get a check back from the IRS that exceeds what they paid in payroll and income taxes.

The "Making Work Pay" tax credit at the center of the plan amounts to $1.37 a day, or about the price of a cup of coffee.

Almost one-third of the "tax relief" in the stimulus bill is spending in disguise, meaning that true tax relief makes up only 24 percent of the total package – not the 40 percent that President Obama had requested.

Health-related stimulus.  The House Ways & Means committee approved several health-related measures as part of the stimulus package:

• $87 billion in Medicaid spending to shore up state Medicaid budgets.
• $9 billion in Medicaid spending to fund state expansions of Medicaid to cover low-income people who lose their jobs through 2010.
• Expansion of COBRA health insurance (which allows people who lose their jobs to retain their employer-sponsored health insurance).
• People 55 or older, and those with 10 years of tenure or more at their jobs, can retain their insurance until they find a new job – or until they are old enough to enter Medicare.
• Subsidizes COBRA payments for up to 12 months, covering 65% of premiums.
• Currently there are no COBRA subsidies and the benefits are limited to 18 months.
• $20 billion to create standards for health information technology and implement systems for public insurance programs.
• Hospitals would be eligible for payments of $2 million if they adopt electronic medical records.
• Doctors would receive up to $65,000 each.
• Providers would be penalized if they don't adopt the technology before 2016.

Tax stimulus.  The House Ways & Means Committee approved $275 billion worth of tax cuts.  Under the terms of the plan, the number of taxpayers who would get more in refunds than they actually pay in payroll taxes would increase from 15 million to 22 million. 

• $145 billion for the new "Making Work Pay" refundable tax credit.  This is a rebate for each worker's first $500 in Social Security and Medicare payroll taxes ($1,000 for couples).  The credit begins phasing out for individuals making more than $75,000 or couples making $150,000.
• Expand the Earned Income Tax Credit (EITC) by raising the size of the credit for large families and raising the threshold at which the credit begins to phase out.
• $18.3 billion to make the child tax credit completely refundable for 2009 and 2010.
• $2,500 tax credit for the first four years of college.
• Allow bonus depreciation for businesses.
• Reduce tax liabilities for up to five preceding years of net operating losses.
• $20 billion/3-year expansion of the renewable-energy tax credit.

Spending stimulus.  The House Appropriations Committee approved $358 billion worth of spending, in spite of a report from the Congressional Budget Office (CBO) that only 7% of the funds would be spent this year.  By the end of 2010, only 38% would be spent; and by the end of 2011, only 67% would be spent (not exactly the definition of "stimulus," some would say).  Among the more ridiculous spending items:

• $50 million for the National Endowment for the Arts (more than a 30% funding increase).
• $650 million to pay for TV-top boxes that will convert analog signals to digital.  Congress is forcing a switch to digital TV signal this year.
• $1.1 billion to Amtrak, the federal train service that can't make a profit even during good economic times.
• $300 million to upgrade job training facilities that serve unemployed youth (never mind that reducing or eliminating the minimum wage would help these youth find jobs).
• $400 million for habitat restoration projects (growing trees and such).
• $850 million to cut down trees that cause a hazard for wildfires (hopefully not in the habitat restoration areas).
• Requires all contractors to pay their workers the prevailing wage under Davis-Bacon laws.  The federal Davis-Bacon Act sets construction wages at the "prevailing level" –  which turns out to be the level set by the building trades unions.
• Prevents Illinois from receiving any stimulus aid unless Gov. Rod Blagojevich is no longer in office.

Energy stimulus.  The House Energy & Commerce Committee approved $54 billion worth of energy-related stimulus, mostly focusing on modernizing the nation's power grid and developing renewable and alternative energy sources.  Rep. Fred Upton (R-MI) offered an amendment designed to promote nuclear energy by qualifying "zero emissions" sources for stimulus funds, the amendment was defeated.

Housing foreclosures.  One item that Speaker Pelosi said she would like to include in the stimulus package, but has not been decided yet, is the so-called "cramdown" provisions that would allow bankruptcy judges to alter the terms of residential mortgages – essentially allowing judges to rewrite the terms of mortgage contracts to alter interest rates, reduce principal, or extend the terms of mortgage agreements.  Fierce opposition from the financial industry may keep this out of the stimulus package.

If you read to the bottom of this, you surely must be livid at this point? These are your dollars being spent. Would you spend this kind of money on these kinds of items if you could afford to? If you had two trillion dollars sitting around, is this what you would spend it on? Tell me about it by commenting on my blog…………..

10 Responses to “Stimulus Package Will NOT Help Small Business”

1. Georgine Busch Says:
   February 2nd, 2009 at 2:34 pm

   Support the bill. Giving jobs and funds to working people will allow them to consume which will have an amazing impact on small business (ie customers). Quality of life in our communities is also very important (ie arts). It is unfortunate that business did not value quality of life enough to contribute which would have prevented a need for government to provide this support. Bush proved that trickle down theory does not work with current business ethics. Lets try trickle up to see if that may be more successful.

2. Jo Schrock Says:
   February 2nd, 2009 at 6:34 pm

   Where can I send my opinion on this stimulus package that my response will join millions of others and then be sent to the Senators?

3. David Pinkus Says:
   February 2nd, 2009 at 7:52 pm

   Terry, This is a very good description of the bill and just confirms that it is more about spending and expanding the federal govenment than stimulating the economy. It really looks to me like the long term effect will be more economic stagnation as the we try to find ways to continue to fund the programs that are started or expanded by this spending bill

4. Mike Casey Says:
   February 3rd, 2009 at 2:22 pm

   Terry, this is one of the best line-by-line breakdowns I have seen on the “stimulus package.” Even over Heritage and CATO. Thank you and keep up the great work!

5. Victoria Braden Says:
   February 3rd, 2009 at 7:57 pm

   I can’t believe the American people would let our government put our country in this kind of debt. We always hear about the Federal Deficit and yet here we are looking at one of the largest ‘pork’ spending bills ever. Terry, thank you for exposing this bill for what it is! I hope we are able to stop this bill and craft a true stimulus package.

6. Mack Cobb Says:
   February 4th, 2009 at 2:53 pm

   I guess the only item left out of the bill is that dam on Willet Creek from the movie “MR. Smith goes to Washington.”

7. John Says:
   February 14th, 2009 at 6:39 am

   Can they legally put a “bounty” on someone,like Blagojevich. I believe he is guilty ,but to put that threat in the stimulus bill is ,just goes to show you how party leaders are using their new found power.I used to call Rush Limbaugh A idiot ,now I may Have to take him seriously .

8. Skinny Ties Says:
   May 6th, 2009 at 4:44 am

   Blogs like this are why I use the internet.

9. greg russel Says:
   May 6th, 2009 at 4:41 pm

   Great information and usefull too. I need a grant and I need all the help I can get. I will be back soon as I have bookmarked your blog.

10. PB Says:
    May 27th, 2009 at 2:05 am

    Support the bill. Giving jobs and funds to working people will allow them to consume which will have an amazing impact on small business (ie customers). Quality of life in our communities is also very important (ie arts). It is unfortunate that business did not value quality of life enough to contribute which would have prevented a need for government to provide this support. Bush proved that trickle down theory does not work with current business ethics. Lets try trickle up to see if that may be more successful.

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