Snowballing stimulus bill: It’s ‘a gravy train,’ says Peterson

WASHINGTON, D.C. — As the economic stimulus package snowballs to the U.S. Senate today, there are signs of compromise, but no lessening of mass.

The bill, which passed the House last week at $819 billion, is now estimated to have swelled to roughly $890 billion. While some spending has been axed — $200 million to tidy the National Mall, and millions of dollars for family planning programs and sexually transmitted disease research — the Senate version of the stimulus still includes billions more for tax cuts and a dizzying array of programs.

<strong>Collin Peterson </strong>
Collin Peterson

“This thing has become a gravy train for all these things that have not been funded over the years,” said Rep. Collin Peterson (D-Minn.), who was one of 10 House Democrats to vote against the bill last week.

In an interview after the vote, the 7th district Congressman cited the bill’s tax cuts and misaligned spending priorities as reasons for going against his party.

“Bottom line, what I am concerned about is adding to the deficit,” Peterson said. “There are huge amounts of money here  that we are going to have to borrow.”

Among increased spending measures, the Senate bill also includes $69 billion to shield tens of millions of middle-income Americans from the so-called alternative minimum tax. But it will likely be the spending portions of the bill that will be cut this week as Democrats try to woo Senate Republicans, who remained critical of the package on Sunday’s talk shows.

“I can’t believe that the president isn’t embarrassed about the products that have been produced so far,” said Minority Leader Sen. Mitch McConnell (R-Ky.) on CBS’ “Face The Nation.” He mentioned the $600 million for new cars for federal employees and $150 million for honeybee insurance.

“This is nonsense,” he said.

Controversial programs
Other controversial spending still in the bill includes $75 million for anti-smoking programs and $100 million for advanced computer research.

“I think you should take out the social spending that is not going to create jobs… I think we can do it more effectively with less money,” said Sen. Kay Bailey Hutchison (R-TX) on NBC’s “Meet the Press.”

Senate Democrats suggested on Sunday that they would be open to Republican proposals, including a $15,000 tax credit for all homebuyers and directing more spending toward infrastructure projects.

When asked on “FOX News Sunday” how far the Democrats were willing to go to try to get some Republican buy-in, Sen. Dick Durbin (D-Il) replied: “We’re very open, very open to this. For instance, some of the Republicans have been saying to us, ‘Put more money in infrastructure. Invest in the roads and highways and bridges. Make sure that we create good-paying jobs here in America that we can see, whether we’re dealing with mass transit or local infrastructure or wastewater treatment.’ You’re going to see an amendment that does exactly that.”

Transit spending
That would please some Minnesotans, including Democrat Jim Oberstar, chair of the House Committee on Transportation and Infrastructure.

Oberstar had lobbied hard to get more money for transportation and infrastructure into the House version of the stimulus. The Senate’s bill currently includes an additional $2 billion for high-speed rail, but an overall net decrease in funding for transit.

Despite the hubbub over spending, however, no one has announced a filibuster threat just yet, and it looks like Senate Democrats are going to be making a considerable effort to keep it that way.

Only 10 working days remain before President Obama’s self-imposed mid-February signing deadline — a cut off that will be used as a key measure of his effectiveness and ability to steer the country during its worse economic recession in the last 50 years.

Norman Ornstein
Norman Ornstein

Norman Ornstein, a resident scholar at the conservative-leaning American Enterprise Institute, said that much will ride on the Democrats getting more support from Senate Republicans than they did in the House where no Republicans voted for the stimulus.

“It is partly because it is Obama’s desire, but the impact of the stimulus package is also psychological. The broader the support, the greater the confidence boost to the nation,” said Ornstein. “Secondly, the more Republican senators they [the Democrats] get, the more pressure they put on the House Republicans to change their behavior.”

Cynthia Dizikes covers Minnesota’s congressional delegation and reports on issues and developments in Washington, D.C. She can be reached at cdizikes [at] minnpost [dot] com.

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Comments (9)

  1. Submitted by Bernice Vetsch on 02/02/2009 - 12:53 pm.

    I believe the money “to tidy the national mall” covers such essentials as shoring up the Washington Monument before it slides into the Potomac.

    I also believe much (most?) of what the plan’s opponents are calling special interest groups or pork are really essentials — most notably the $100 million for advanced computer research that could and should lead to America once again becoming a manufacturer of computers instead of an importer. The goal is j-o-b-s now and for the future.

    Tax credits for business don’t work except to increase their profits. No company will hire an un-needed employee to get a $3,000 reward, but will hire a needed employee without that reward.

  2. Submitted by Eric Ferguson on 02/02/2009 - 01:30 pm.

    I have to agree with Bernice about the capitol mall. I first heard of it as $200 million for resodding, and of course that sounds wasteful. It was meant to. The people calling it that didn’t tell us this “resodding” project involved fixing the building foundations. This is one of those shovel-ready projects that would make jobs right now, and long term, we would save money because the buildings will just get in worse shape until they fall over.

  3. Submitted by David Witte on 02/02/2009 - 01:46 pm.

    Kudos to Representative Collin Peterson for breaking rank to vote against the economic stimulous bill. I am all for investing in critical infrastructure public works projects like roads, bridges, schools, parks, our electrical grid, etc… but the current bill has too much PORK, FAT, and WASTE, and will have little or no impact on our economy for at least a year. I expected more from President Obama in terms of a response, a break from pork barrel politics, and the discipline to insist upon what is best for our country. I never thought I would say this about anything that Rush Limbaugh said, wrote or thought but in the 1/29/09 edition of the WSJ, Limbaugh outlines his bipartisan Stimulus plan (“MY Bipartisan Stimulus”) as dividing the $900 Billion into a combination of re-investment in public infrastructure, he suggests 54% or $486 Billion, and tax cuts, he suggests 46% divided between reductions in the corporate tax rate and the capital gains tax. I am not sure if I agree with his allocation or choice of tax cuts but that issue is irrelevant if there are metrics that we can use to evaluate and measure which form of stimulus, Keynesian economics or Supply Side economics, is working to stimulate the economy by the end of the year. I would also like to point out the hypocracy of criticizing Mr. Thane and other Wall Street executives for handing out huge year end bonuses in light of the economic crisis and government bailout when the PORK in this stimulus package is equivilent to those bonuses.

  4. Submitted by Richard Callahan on 02/02/2009 - 01:57 pm.

    Isn’t the whole point of the stimulus package for the government to spend money? Isn’t this what all but about five economists in the country are advising? Whether to build a bridge, build a work of art, buy cars, or pay for family planning, every dollar is ending up in the pocket of some wage earner.

  5. Submitted by Craig Westover on 02/02/2009 - 02:46 pm.

    Government doesn’t create jobs. Government doesn’t create wealth. Government can’t do anything for anyone until it acquires the funds to do so, and ultimately government acquires its funding through taxation. Borrowed money must be paid back out of taxes collected. When government simply prints paper money not backed by productivity, the result is inflation, which reduces people’s purchasing power as viciously as any tax.

    Cutting to the chase, every dollar of government spending must be raised through a dollar of taxation. A road is built. Were the road built to meet public demand, if it enhanced overall mobility, if, in short, it were more desired by taxpayers collectively than the things they would have purchased individually had their money not been taxed away, no one can object. But building necessary roads and infrastructure is not the objective of the stimulus package. Its purpose is “creating jobs.” The criterion for project consideration is “shovel readiness,” not necessity.

    Every construction job created on the “shovel-ready” criterion is a job destroyed someplace else. We see workers building a road. What we don’t see and can’t see are the jobs that never had a chance to be because $819 billion was taken from taxpayers and diverted to more visible projects. We have more construction workers, but fewer waitresses, home remodelers, retail employees and workers in industries taxpayers would have willingly supported if allowed to spend their own money. We can drive on a new road or cross a new bridge that would not exist without the stimulus package. We cannot, however, taste the food not produced by the restaurant that doesn’t open, buy the car that is not sold by the dealership that isn’t founded, nor enjoy the room addition we cannot afford to build.

    Visualizing the unseen damage of excessive government spending on nonetheless real people requires an imagination and intellectual honesty lacking in politically motivated policymakers.

  6. Submitted by David Dempsey on 02/02/2009 - 03:53 pm.

    It’s interesting that Rep. Peterson considers the bill a ‘gravy train’ when he engineered the farm bill gravy train last year. More importantly, what appropriation in the bill benefiting his district will he refuse to accept on behalf of his constituents?

  7. Submitted by donald maxwell on 02/02/2009 - 11:04 pm.

    I am uncomfortable about criticizing comments rather than commenting on the subject article, but I just can’t let Craig Westover’s posting go unanswered, because he presents the prototypical economic analysis that has helped bring the country to the mess we are in.

    The purveyors of this view entirely fail to understand the difference between the existence of a number of dollars and the concept of the rate of flow of dollars. This is how Westover can state that a dollar spent on a bridge is a dollar not spent in a restaurant.

    The reality is exactly the opposite: the dollar spent on the bridge is also going to be spent in the restaurant and the new room and the garage. You can have masses of dollars sitting around someplace, without any economic activity whatsoever. It’s the rate of flow, baby.

  8. Submitted by Ron Gotzman on 02/04/2009 - 08:31 am.

    I thought the liberal big-spenders cared about children? Spending this much money in order to assure trillion dollar deficits for years to come and growing government is a tax on children.

  9. Submitted by Hiram Foster on 02/07/2009 - 07:21 am.

    “This thing has become a gravy train for all these things that have not been funded over the years,”

    I think Rep. Perterson should be congratulated for defining in as precise set of terms as possible, what a stimulus package is. Whether or not this stimulus package or any stimulus package is good for the economy is a debatable issue. But a stimulus package if it is to have any possibility of doing what it was intended to do, can never be anything other than a gravy train for all those things that have not been funded over the years, and I might only add, quite a few of them that have.

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