Haste may stimulate waste
We join millions of other Americans who believe the federal government must act to stimulate the economy. But the $819 billion stimulus package that breezed through the House last week with virtually no debate is so deeply flawed that it needs to be seriously revamped or rejected.
The more details that come out, the more flawed it appears.
For example, as several news organizations reported last week, the House legislation includes protectionist measures that would restrict imports of materials like steel. But such limitations will almost certainly spark retaliatory measures from other nations. That’s what happened after the Smoot-Hawley Tariff Act became law in 1930, helping to deepen the Great Depression.
Additionally, as noted in the column below, the House-passed stimulus bill is packed with items that are really long-term policy issues, not quick economic boosters. They should be debated and voted on separately, not as part of an economic stimulus.
But, if lawmakers still believe that steamrolling a stimulus bill through Congress as rapidly as possible is the best way to do business, they ought to pay attention to a report issued by the Government Accountability Office last week.
The report says that the federal government’s $700 billion bailout bill for financial institutions, which Congress approved late last year and this newspaper supported, still lacks adequate oversight. Despite some new rules and tracking implemented by the Treasury Department, the GAO said no one can be sure yet whether banks receiving bailout money are using it as intended by Congress.
Similar oversight problems exist in the stimulus bill, even though it creates a new bureaucracy to track some of the money. How are taxpayers to know whether the claimed jobs were actually created, especially with money sent to states, cities and counties?
Fortunately, it appears that a growing number of senators, including some leading Democrats, are having qualms about passing a stimulus bill identical to the House version. Senators are talking about a plan that features more money for things like roads and bridges, and more for tax cuts, including a possible temporary cut in payroll taxes.
We agree that a stimulus bill needs to be passed quickly if it is to help us out of the current economic crisis. But it’s better to take a little time to ensure such legislation focuses on measures that will actually aid our financial situation now, rather than pass a hastily crafted grab bag of legislation, parts of which may do harm to the economy.