Democrats’ Stimulus Mired in Invalidated Ideas From the 1930s

Posted January 26, 2009 at 6:16pm

Almost 40 years ago, as Apollo 13 made its way to the moon, an explosion threatened the mission and the lives of the three astronauts on board.

[IMGCAP(1)]When the control room erupted into chaos, Flight Director Gene Kranz told his team to settle down, “Let’s work the problem, people,” he said. “Let’s not make things worse by guessing.”

Last week, Rep. Dave Camp (Mich.), the top Ways and Means Republican, posed the following question to Thomas Barthold, deputy chief of staff of the Joint Committee on Taxation, at a hearing on the Democrats’ stimulus bill.

“Can you tell me, Mr. Barthold, how many jobs will be created by this legislation?”

Barthold answered, “Well, in short, Mr. Camp, I can’t.”

Having decided to focus this column on the New Deal logic of the Democrats’ latest economic stimulus bill, I gave some thought to ending the piece right here. Case made.

After all, if the raison d’être for this unprecedented, megabillion-dollar emergency spending package is to quickly stimulate the ailing economy, if its first objective is to create jobs or “save” them — the newest entry in the Democrats’ political lexicon — then isn’t it fair to ask how many jobs and how soon?

We’re still guessing. Originally, President Barack Obama and Hill Democrats had promised a “timely, targeted and temporary” recovery plan that would produce or save 2 million jobs. That figure, like the stimulus package itself, has grown to somewhere from 3 million to 4 million jobs depending on who’s talking and what time of day it is. And that’s the problem.

Despite all the promises of fast action to create millions of jobs, much of the $825 billion stimulus bill bears a striking resemblance to the annual Democratic budgetary wish list — but this time on steroids — and fails to meet the criteria of timely, targeted or temporary.

The Democrats’ own Congressional Budget Office shot holes in claims that the stimulus funding for job-creating projects would come fast and furious.

According to its recent report, which has now predictably been removed from its Web site, the CBO found that only $26 billion, or just 7 percent, of the major government spending in the legislation will see the light of day in 2009 and only 38 percent, or $110 billion, by the end of 2010.

To be fair, Obama’s OMB director disagrees with his own party’s Congressional analysis, as do Congressional Democrats, ironically, and predicts that 75 percent of the funding will be out the door creating jobs by the end of fiscal 2010. Again, one might ask the question, “Based on what?”

Anyone who has ever worked in the federal bureaucracy knows that regardless of who is president, it moves at a snail’s pace. Billions of dollars in grants to individuals, private groups and the states are doled out every year as part of the federal government’s normal budget process, and it takes months, if not years, to get the funds to qualifying recipients.

Why should we assume that the federal government will suddenly become a model of efficiency, getting stimulus checks out the Treasury door? While we now await a “revision” from the CBO, no doubt duly chastised by its Democratic bosses, chances are the CBO got it right the first time.

As we have seen with most government-created “infrastructure” projects going back to the Great Depression, they simply don’t fix the unemployment problem. The private sector does.

Okay, so the bill isn’t timely. What about targeted? When you’re spending $825 billion on everything from contraception to broadband communications, it’s difficult make that claim. Some of the proposed spending reflects some good thinking, putting money toward information technology in the health care arena or in underserved rural areas, for example.

But that kind of targeting ought to come through the annual appropriations process that allows time for serious debate and a healthy exchange of ideas. Instead, much of the spending, as it stands now, seems to be little more than gifts to important Democratic constituencies.

Finally, are the proposed programs and projects funded by the stimulus package temporary? At the 1964 GOP convention, Ronald Reagan said “a government bureau is the nearest thing to eternal life we’ll see here on earth.” Not much has changed.

The notion that the recovery legislation’s billions of dollars of programs and projects will simply disappear at some prescribed moment lacks credulity, especially given the recent Washington, D.C., track record of Democrats and Republicans.

When former President Bill Clinton proposed his politically useful “100,000 cops on the street” initiative to provide federal grants for hiring of new community-based cops, he made friends with mayors and police chiefs all across the country.

It was supposed to be a short-term, temporary program. It became a continuing federal grant program when local jurisdictions found themselves unable to pay new recruits’ salaries after the grants ran out. Are we supposed to believe that the “temporary” programs paid for by the stimulus package won’t run a similar course?

In the next couple of days, the Republican House leadership will offer Obama an alternative approach to the Democrats’ nearly trillion-dollar stimulus package. It will reflect a very different philosophy, a belief that small business remains the engine of American job creation. A quick review of the Democrats’ economic stimulus bill shows a party still clinging to the old idea, invalidated in the 1930s, that government is the best creator of long-term jobs.

Yes, elections have consequences, and as Obama pointed out to Hill Republicans in a White House meeting, he won. But victory and pork-barrel politics notwithstanding, he would be wise to listen to his own promises of change and open his mind to new ideas that might fit his own administration’s criteria of “timely, targeted and temporary.”

David Winston is president of the Winston Group, a Republican polling firm.