Michelle Malkin » Stimulation-palooza: The inevitable lard-up

Stimulation-palooza: The inevitable lard-up

By Michelle Malkin • January 28, 2008 11:20 AM

What I wrote here on Jan. 18: “As I’ve said repeatedly now, stimulation-palooza will inevitably be larded up with special-interest pork and other spending goodies in the tens of billions of dollars.”

What I wrote here on Jan. 16: “I’m getting a few e-mails from readers who are convinced I shouldn’t be worried about the White House/Republican “economic stimulus” proposals because they’ll only include tax cuts. No, they won’t. They will be larded up with Clintonian goodies and giveaways and bailout measures–home heating bill aid, foreclosure aid to states, etc. etc. etc. They’ll only be arguing about how much to give away, not whether.”

What I wrote here on Jan. 4: “It would be one thing if “economic stimulus” simply meant tax relief. But in Washington–what with the White House looking for a legacy, the subprime crisis exploding, and “bipartisan consensus” in demand–there’s no way in hell any “economic stimulus” package will win approval without being larded up with gobs of needless, unwarranted spending. I don’t care who’s occupying the White House. “Economic stimulus” is a synonym for Big Government.”

See, I told you so. The inevitable lard-up is here:

While Congress edges closer to an agreement over a fiscal stimulus package, a contingent of lawmakers and tax policy experts are suggesting what some are ironically calling a “second tranche” of tax cuts and spending to keep the economy out of recession.

Lawmakers are trying to complete the initial stimulus package by Feb. 15, before Congress recesses for a week. However, in order to meet budgetary guidelines and a tight time frame, many tax provisions will be excluded from the package. The stimulus proposal, crafted by congressional leaders and Treasury Secretary Henry Paulson, would dole out $100 billion in individual tax rebates and $50 billion in business tax incentives.

During a press conference last Thursday, House Speaker Nancy Pelosi (D-Calif.) said the initial stimulus was crafted to be swift and help stave off a recession, adding that “if it does not, there will be more to come.”

Which includes:

…additional spending on infrastructure, extending the carryover for net operating losses, investment breaks in alternative fuels and repatriating capital abroad from U.S. subsidiaries.

…Sen. Ron Wyden (D-Ore.) last week mentioned health-care reform as a way to help stabilize markets. Sens. Jim Bunning (R-Ky.) and Jon Kyl (R-Ariz.) prefer incentives for business investment and individual saving rather than spending incentives such as the $600 individual tax rebates. And several members on the House tax committee, including chairman Charles Rangel (D-N.Y.), want to extend unemployment insurance.

A second tranche likely would hinge upon some kind of a trigger, such as unemployment rising precipitously. The “trigger proposal” was pitched by former Reagan Administration economist Martin Feldstein, now a Harvard economics professor.

…A second-tranche stimulus could take longer and be prone to more earmarks, though it would likely adhere to “pay-go” rules, which require corresponding spending cuts and tax increases to offset tax cuts, lawmakers told Financial Week. This initial stimulus is expected to pass without adherence to pay-go.

Lawmakers aren’t the only ones seeking more provisions. Liberal groups and unions criticized portions of the House stimulus agreement, saying it won’t deliver enough benefit in time. The Center for Budget and Policy Priorities said a temporary boost in food stamp benefits and an extension of unemployment benefits would deliver “the most bang for the buck.”

The CBPP also stated that the stimulus package’s business tax cuts would cost states at least $4 billion in tax revenue, leading to further budget cuts in state health-care and education programs. Unlike the federal government, states are required to balance their budgets. State fiscal relief is another provision many legislators—particularly those from hard-hit states such as Michigan and Ohio—will request.

Business groups, such as the U.S. Chamber of Commerce and the National Association of Manufacturers, also had been lobbying to include tax exemptions and spending projects.

***

Hans Bader at OpenMarket.org spotlights the welfare lard in the stimulus package:

As if that deal didn’t contain enough welfare already, the Senate is preparing to lard up the “stimulus” plan with billions more for mortgage counseling, aid to state governments in the red, food stamps, extended jobless benefits in (mostly high-tax, anti-business) states with high unemployment rates, and home heating oil subsidies.

Even if the “stimulus” plan does stimulate consumer spending, it won’t necessarily boost American industrial production, since many consumer goods are now purchased from foreign countries, like China.

The “stimulus” plan will give greatly expanded lending authority to Fannie Mae, the government-backed mortgage giant that engaged in Enron-style accounting fraud and helped create the housing bubble that threatens the economy with a recession.

This “mortgage counseling” funding increase is Chuck Schumer’s Big Idea. They’re talking $200-300 million more in addition to the $180 million for “Housing Counseling Assistance” that he helped stick into the omnibus spending bill last year.

A tipster writes: “If you google ‘mortgage counseling,’ you will get the HUD approved list of mortgage counselors, which has to reveal their affiliation. Many are affiliated with ACORN and La Raza. $200 million to La Raza and ACORN. At election time. Seems like a coincidence. Why do we need mortgage counselors if we just raised the FHA limit to $725,000? Wouldn’t the government handle that ‘mortgage counseling?’”

Good question.

Posted in: Subprime crisis

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#228617

On January 28th, 2008 at 11:26 am, mike volpe said:

You shouldn’t worry about the stimulus package because a 150 billion dollar stimulus package is sort of like giving Bill Gates 1000 dollars and thinking that will make a difference in his life. This stimulus package is almost all for show, however everyone should be worried about the dramatic rate cuts of the fed.

We are now down to 3.25% on the fed funds rate. (remember the prime rate is always 3% higher than the fed funds rate) We were at .75% at the low when Greenspan cut rates to levels that were irresponsible. We will likely be below 3% soon and who knows how much lower. That is what everyone should worry about. The stimulus package is pure window dressing.
#228618

On January 28th, 2008 at 11:26 am, 30 pcs of silver said:

Everybody has their hands in the pot. Never mind the fact this has been trotted out as a way to stave off a recession…Proof positive that they don’t care about curtailing spending.

The proof is in the pudding. They know this is income redistribution. So they treat it like they treat all bills. Pork-a-palooza! Both sides of the aisles ought to be ashamed.
#228625

On January 28th, 2008 at 11:34 am, Boomer said:

The wife and I were discussing this issue last night and I told her the lying crapweasels would slow it down by adding a bunch of unnecessary pork to this disaster in the making. Once again their greed and arrogance will make a bad idea worse or possibly kill it all together (which wouldn’t break my heart one little bit). Thanks again Michelle for being all over this issue and reporting it to us from the start.
#228631

On January 28th, 2008 at 11:40 am, Dave from Flint said:

More monuments in Pelosistan, Byrdville, and Murthastan.
#228633

On January 28th, 2008 at 11:42 am, taylork said:

They’re talking $200-300 million more in addition to the $180 million for “Housing Counseling Assistance” that he helped stick into the omnibus spending bill last year.

That’s like asking everybody give a dollar to give to someone for couseling that educates people not to do something stupid. In reality, all they’ll learn is that they can screw up and still get bailed out. Congratulations, you just lost another dollar.
#228639

On January 28th, 2008 at 11:48 am, atxcowgirl said:

The retirees living on SS have already been complaining because it doesn’t include them. This is getting ridiculous.
#228644

On January 28th, 2008 at 11:53 am, Barry F. said:

Quick!

If the government is about to stimulate us, someone had better get the KY out.
#228645

On January 28th, 2008 at 11:54 am, neo-connette said:

Yes, it’s income redistribution – not only will I not get a rebate but I just got a (payroll) tax increase of $558.

I don’t want this to be misconstrued as complaining – I’m glad I have the opportunity to make a good living, thanks to my father putting me through college – but call it what is is!
#228646

On January 28th, 2008 at 11:54 am, geminicontender said:

Let’s hod Congress to redistribution of income. Cut all PORK! The only thing Nancy got passed this year was her expensive menu for Congress’ cafeteria. Go back to school lunch menus.
#228647

On January 28th, 2008 at 11:55 am, geminicontender said:

Stimulus = Congress’ firing.:):)
#228648

On January 28th, 2008 at 11:55 am, hatelibs said:

Oh just wait and see. There was no way the Dems would leave out unemployment and of course…the seniors. Now it’s a matter of finding ways to suck up to all the special voting interests. So here we go…loading it up with a bunch of crap and leaving ut the one thing that would make a difference…making the tax cuts PERMANENT!
#228651

On January 28th, 2008 at 11:57 am, Teddy Kennedy said:

errah a garage for every chicken, errah!
#228652

On January 28th, 2008 at 11:59 am, DesertLover said:

The stated “purpose” is to “quickly” get funds into the hands of the people so it can be spent … right … so they are saying anywhere from June to August for the checks to go out … depending on who you are listening to … that’s not very “quick” …

If they were really serious about this I have the perfect solution … and there would be no possiblity of any pork being added in to the equation …

When you do your taxes and get the bottom line calculated you simply deduct the appropriate amount from the bottom line and

… Voilà! …

you just got your rebate instantly and nothing more is spent by the people in Washington … take your $600 or whatever that you didn’t have to send the IRS and go stimulate the economy …

add to that the savings of not having to pay for all the computer time involved to calculate the checks, all the savings of the cost of printing and mailing the checks, and all the savings of not having to process those checks through the banks and treasury … I figure they will save a lot of money in that alone …
#228653

On January 28th, 2008 at 12:00 pm, Teddy Kennedy said:

Errah, my niece should have waited till spring for the photo op with Barrack on the ole yacht errah. Not quite a subtle invite in the ole grey lady was it??!!
#228656

On January 28th, 2008 at 12:02 pm, DesertLover said:

referencing my last … obviously if you have a refund coming anyway you would add the $600 or whatever to the amount coming back …
#228657

On January 28th, 2008 at 12:02 pm, Teddy Kennedy said:

Errah we have to write these checks to the uhh american people because that much currency would clog all the toilets in the capitol! errah
#228663

On January 28th, 2008 at 12:11 pm, Teddy Kennedy said:

Errah, this is not the kind of stimulus package I thought I was voting for …. I kinda like the Wille K Smith approach to these sorts of packages. errah
#228669

On January 28th, 2008 at 12:16 pm, On-my-soap-box said:

TeddY!!!

What in blazzes are you people in DC doing to us tax payers and could you stop it please?
#228681

On January 28th, 2008 at 12:22 pm, Teddy Kennedy said:

Errah Chuck, Nancy, Harry, Hillary and I were chuckling over it at Happy Hour on Friday. It’s a real soap drop for you folks! Were right here behind you! errah.
#228688

On January 28th, 2008 at 12:26 pm, Teddy Kennedy said:

Errah, Chuck has the bright idea to have illegals get some of this “stimulus” package. Yes we can or something . . . . errah! If you don’t pay taxes, maybe you’ll still register and vote for the ole donkeys here in DC errah!
#228704

On January 28th, 2008 at 12:36 pm, loob said:

Teddy Kennedy said: Errah…errah.

Yes, yes. Got the joke a thousand times over already.
#228706

On January 28th, 2008 at 12:36 pm, Dr. Lead Based Paint said:

You’re SPOT ON Michelle! They want to give and give and give and give as long as they don’t have to give THEIR money… especially in an election year.
#228708

On January 28th, 2008 at 12:38 pm, Teddy Kennedy said:

Does this canidate make me look fat, errah?
#228723

On January 28th, 2008 at 12:52 pm, Pat said:

I am totally disgusted with both parties. I’m an Independent and will vote for the person who is the opposite party of the Congressional majority.

What has happened to the party of fiscal responsibility? They are spending us into oblivion.
#228765

On January 28th, 2008 at 1:15 pm, blues said:

Desert Lover–Your idea will never work,because it makes too much sense.
#228888

On January 28th, 2008 at 3:25 pm, Reg.conservative said:

On January 28th, 2008 at 11:48 am, atxcowgirl said:
The retirees living on SS have already been complaining because it doesn’t include them. This is getting ridiculous. [ Please note many of us have 401K plans we pay tax on them when mandatory withdrawals have to be made.]
#228899

On January 28th, 2008 at 4:01 pm, NJRepublican said:

I wonder how terrible it would be for us to actually go into a recession. With the babyboomers entering retirement, we are rapidly approaching a society of Americans of who have never known themselves or have never known a relative who has had to sacrifice. If all everyone has known is prosperity, then what? Maybe we need to hit rock bottom to remind people of what it is like to have to scrimp and save and appreciate what we do have.