Sunday, February 08, 2009

The Republican Stimulus Package Clown Car Keeps Unloading Clowns

That "liberal media' who is in love with all things related to President Obama? They do not want to actually provide airtime on their networks for him to talk about the status of our economic problems and his ideas on how to improve the current fiasco.


Do people really want to come home after looking for a job, or after being at a job they hate, sit down to veg out in front of their favorite show -- and he's on again?" said one TV suit, who suspects/hopes the Average Joe's reaction to too much Obamavision might be "nothing he's going to say is going to help me get a job, or put food on the table."

Eric Bohlert responds:

"Combined, the networks control more than one hundred hours of primetime programming each week. Obviously, they can make-up a handful of lost ad slots because of Obama's primetime address, just as networks have done for decades. And then there are the bitter, nameless TV execs quoted in the article. (Ungrateful suits whose networks have made billions using the public airwaves free of charge.) The unvarnished disdain for Obama and the contempt for public discourse expressed is just astounding."

Yeah, God forbid your sit-com might get a delay in order to get information about how to plan to improve an economy which is tanking faster than a cement-shoed average Joe.

The Republican idea of reducing or eliminating assistance to states (most of which are in economic freefall as tax revenues fall and fall) is nonsense worthy of Alice in Wonderland and is soundly rejected here:

"The idea that it would be good for states to cut back in the midst of the recession is stupid. The idea that the recession won’t, absent federal aid, lead to layoffs of state employees such as teachers and firefighters is also stupid. But the idea that it’s simultaneously true that the reason we should eschew aid is that states need to cut back and also true that it’s fearmongering to warn of layoffs is doubleplus stupid. What does Ensign think cutbacks consist of? States will be reducing vital services. The cutbacks will have the immediate impact of reducing the incomes of laid-off families and beneficiaries of state programs. That will have an additional impact on businesses where the newly laid-off teachers and cops used to work.

And the reduced level of service will have its own bad economic impacts. Cutting back public safety budgets will mean fewer cops on the beat. That means more crime which will further reduce economic activity. State cutbacks to child care subsidies will make it harder for people who lose jobs to find and accept new ones. The cutbacks to mass transit services that are happening across the country will introduce additional rigidity into the labor market and reduce patronage of businesses that people are accustomed to reaching via transit. And in the most severe cases, cutbacks in assistant to the severely impoverished will have a decades-long impact on the well-being of their children."

Already cut from the stimulus projects:

• $10 million state and local law enforcement

• $50 million for NASA

• $122 million for Coast Guard polar icebreaker/cutters

• $100 million for Farm Service Agency modernization

• $50 million for aeronautics

• $50 million for exploration

• $50 million for Cross Agency Support

• $200 million for National Science Foundation

• $100 million for science

• $1 billion for Energy Loan Guarantees

• $1 billion for Head Start/Early Start

• $5.8 billion for Health Prevention Activity

• $2 billion for Health Information Technology Grants

• $600 million for Title I (No Child Left Behind)

• $16 billion for school construction

• $40 billion for state fiscal stabilization (includes $7.5 billion of state incentive grants)

$3.5 billion for higher education construction

Failed nominee for president Mitt Romney says to heck with spending on programs which will better educate, inspire scientific and economic development, improve energy efficiency -- he says the must would be best if it went to:

"And what better place to begin than repairing and replacing military equipment that was damaged or destroyed in Kuwait, Iraq and Afghanistan?"

Gosh, how did this guy lose? He's an economic soooper-genius!

Here's a reality check - if your state and city and county cannot afford the necessities of public education or public safety or funds to insure the safety of bridges and roads, guess whose tax rates will go thru the roof?

The Center on Budget and Policy Issues writes:

"The Stabilization Fund would provide funds to partially close state and local budget shortfalls and allow states to avoid some of the most harmful actions they otherwise would have to take to meet their balanced budget requirements. In particular, it would help avert damaging cuts in state aid to education at a time when school districts are reeling from declines in property taxes caused by sinking property values. The economic recovery bill that the House passed includes a similar provision.

The Fiscal Stabilization Fund and the Medicaid assistance also provided in the bill together would fill less than half of projected state deficits for the next 2½ years. Diminution of the proposed funding would increase the extent to which states must take budgetary actions that are likely to undercut efforts to stimulate the economy."


"States are facing their worst fiscal crisis since the Second World War. The recession has reduced state revenues, while increasing the need for state services such as Medicaid. Forty-six states face budget deficits in the 2009 and/or 2010 state fiscal year, and state deficits are expected to total $350 billion through state fiscal year 2011.[1]

The state fiscal crisis is a direct result of the economic downturn. Before the downturn, states had amassed reserves totaling 11.5 percent of state spending. Moreover, total state spending, which fell sharply relative to the economy during the 2001 recession, remains below its fiscal year 2001 level as a share of the economy.

Because most states are required to balance their operating budgets, states with deficits are forced to cut spending and/or increase taxes. At least 39 states have enacted or proposed spending reductions.[2]

Among the budget cuts, 34 states have cut funding for elementary, secondary, and/or higher education or have proposed such cuts.

  • At least 20 states have implements cuts to K-12 and early education, and other five have proposed such cuts.

  • At least 27 states have implemented cuts in funding for public colleges and universities, and another three have proposed such cuts. The result is reductions in faculty and staff and tuition increases of 4 percent to 15 percent.[3] Tuition increases and cutbacks in faculty and enrollment reduce access to higher education for many low- and middle-income students.

When states cut spending, they lay off employees, cancel contracts with vendors, reduce payments to businesses and nonprofits that provide services, and cut benefit payments to individuals. All of these steps remove demand from the economy and compound the economic slowdown, counteracting the effects of the recovery bill. If states raise taxes to balance their budgets, the effects on demand are similar. The Stabilization Fund would help prevent further cuts to K-12 and higher education, as well as other critical state and local services.

How the Stabilization Fund Would Work. The State Fiscal Stabilization Fund creates two block grants. The larger block grant would provide $38.8 billion, be earmarked for education, and be allocated by each state’s population of individuals between the ages of 5 and 24. A portion of the funds would be dedicated to helping states maintain their education funding commitments; the remainder would flow directly to local school districts. The smaller block grant would provide $24.8 billion, allocated based on each state’s total population, to support other basic state services, such as public safety and law enforcement, services for the elderly and people with serious disabilities, child care, and the like.

The $39-billion block grant would provide vital protection for education funding. To receive either block grant, states would be required to fund both K-12 and higher education at no less than their fiscal year 2006 level. States could use the funds to help fulfill their commitments under their regular school funding formulas, which in most states would include increases in state funding to compensate for declining property values and property taxes on which most local school districts rely for funding.[4] In combination, these provisions would help to protect school districts and public colleges against the steep budgets cuts they otherwise would face.

The $25-billion block grant provides vital protection for other key services. Most of the assistance for states in the recovery bill is dedicated to either Medicaid or education. The sole piece not so dedicated is the smaller, $25-billion Stabilization block grant. States provide a wide range of other vital services that also are threatened by budget deficits, including public safety, corrections, and services for the elderly and disabled. State budget cuts in these areas, as well, reduce demand and increase unemployment, thereby deepening the recession.

  • At least 22 states plus the District of Columbia are cutting, or proposing cuts to, medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or significantly increasing the cost of these services.[5]

  • Cuts in other states are reducing funding for law enforcement, programs to prevent child abuse, funding for homeless shelters, and the like.

  • Many states are cutting state aid to localities, which will reduce funding for local programs including police and fire protection, meals for the elderly, hospice care, and seniors’ services.

  • At least 36 states and the District of Columbia have made, or have proposed making, cuts affecting their state workforces, including layoffs.

The $25-billion grant can help to reduce the depth of the cuts states and localities will otherwise have to make, preserving essential services and jobs and sustaining economic demand.

Total fiscal assistance for states in the recovery bill will cover less than half of state deficits. The direct budget assistance to states in the recovery bill will cover less than half of the $350 billion in combined deficits that states are likely to face over the next two and a half years.[6] Besides the two Stabilization Fund grants totaling $64 billion, the bill includes an estimated $87 billion in Medicaid funding, which would help pay for Medicaid costs and avert Medicaid cuts. Together, these pieces add up to about $151 billion, or about 43 percent of expected state deficits. (States will also receive funding for infrastructure, but that is not fiscal relief that helps close holes in state operating budgets, which are the budgets that states must balance each year. States fund most infrastructure projects out of their capital budgets, which are separate.)

States would be required to spend the funds quickly. The Senate bill includes a provision requiring states that fail to spend any portion of a Stabilization grant within one year to return the unspent portion, which would then be redistributed to the other states. And while the bill allows grants to be made through September 30, 2010, states are likely to request their grants much earlier than that in order to address immediate budget needs. Some 43 states face mid-year deficits in the current fiscal year, which ends June 30, 2009 in most states, and a comparable number of states face deficits for the next fiscal year, which generally runs from July 1, 2009 to June 30, 2010. As a result, a large portion of the grants is likely to be spent within a year and a half of the bill's passage."

Fellow Tennessee blogger Southern Beale tries mightily to remind folks that the same plans being pushed now by Washington Republicans were pushed in 2001 and 2008 helped create the financial mess we are in now -- read her post here. As she notes:

"How is this not a repeat of the exact same failed policies of the past eight years?

Who are these Republican “moderates” and spineless Democrats and why have they not learned a thing from the past administration? Who are these people who insist on doing the same thing but expecting different results?

Jon at C&L reminds us of the Republican Party’s own $1.4 trillion economic stimulus of 2001. On Friday I reminded everyone of the Republican’s last great economic stimulus idea of 2008.

It didn’t work. We’re worse off now than we were then. Every person got a check for $600 and we’re still in the toilet.

Look, people can’t eat tax cuts. They can’t pay their rent with them. People don’t need just one check in their bank account: they need a regular paycheck, every two weeks, month after month, year after year.


The rather empty-headed arguments from Senate Republicans gets called out quite well courtesy of Rachel Maddow:

How much are Senators, such as failed presidential candidate John McCain, and Mitch McConnel willing to distort and warp facts - and just lie - in hopes of stirring up anti-Obama sentiment when it comes to aiding our economy? Let's call it the "Bee Insurance Lie".

It turns out that the Senate minority leader took his cue from Neil Cavuto of Fox News, who has been carrying on about the topic for more than a week. Their campaign was joined Tuesday by Sen. David Vitter (R-La.), who stood on the floor of the chamber challenging "any member to come and explain what that provision was."

I'm no senator, but I'm pleased to inform Vitter that it is, in fact, a disaster insurance program for all livestock producers. Beekeepers obviously would be minor beneficiaries next to, say, cattle ranchers, so it's a tad bit dishonest to label the whole program "honeybee insurance."

The provision simply continues a program enacted by Congress last year, overriding a veto by President Bush. In other words, the Senate voted on it twice in 2008 -- once to enact and once to override. Connoisseurs of political comedy will see the punch line coming: McConnell and Vitter voted yea both times.

So it turns out that McConnell isn't really against honeybees. He's only using them to pretend that he's got a principled objection to a stimulus plan aimed at pulling the country out of the most severe recession in decades.

The honeybees, and the rest of us, are merely collateral damage.

1 comment:

  1. I am now convinced that the failure of the economic stimulus will be a feature, not a bug.

    Obama must fail -- we heard it from Rush's lips, did we not? Obama must fail or else the GOP will not win an election for a generation.

    Democrats are too stupid to realize they are digging their own grave, yet again.