Jan 09 2009
Our Government At Work - The Stimulus Package
While there are those in his own party that have questioned Obama’s economic plan, where we are, economically, right now “a” plan is better than “no” plan.
The two main objections regarding Obama’s proposed stimulus plan come from Senate Budget Chairman, Kent Conrad, who raised doubt about the job-creating value of Obama’s proposed $500 payroll tax which would involve working people realizing a small increase in their paychecks each pay period through the reduction of taxes. Would this be a temporary reduction – it would have to be because there is a cut off point of $500/single, $1,000 for family.
If it were a permanent decrease it would possibly make a bigger difference but tax revenue would be lost. However, with the loss of some other programs that are draining money right now – could the possibility exist for a permanent decrease in taxes for those making less than two-hundred thousand
At any rate, Conrad denounced this idea asking “How much lift is that going to give?” Conrad suggests greater emphasis be put on initiatives that will shore up the housing market citing the fact that “We don’t have unlimited money, we’ve go to target.” If all of these things were part of the need for the stimulus package, these comments don’t fit.
Senator Ron Wyden questioned the initiative that would reward businesses with a $3,000 tax credit for every job they created. He cites the fact that this type of incentive has not worked well in the past and suggests that infrastructure spending would have a much bigger economic impact. He also discussed a need for investments in high-speed rail. My impression was that the infrastructure would be all inclusive with the stimulus package??? The way, in fact, to create 3 million jobs over time, thereby stimulating the economy – Did I miss something.
I also heard the comment that to pay an employer a tax break for employing a person, while at the same time the employer was not selling enough of his product/services to justify having that person on the payroll, would create a situation that was not conducive to the business.
Without knowing all the details of the stimulus package, the concerns raised sound like legitimate concerns, with further communications needed; In the meantime, the timetable for action on the broader plan is slipping further into the future. Party leaders and Obama are now aiming for enactment by mid-February as they try to fine tune the effectiveness of the proposed plan.
With the urgency in the need to finalize the proposal however, Speaker Nancy Pelosi has threatened to cancel a planned congressional recess in February to ensure the package is completed.
Obama has discussed the graveness of the situation concerning the economy and promised that it will get worse before it gets better, and that time is of the essence inferring that the sooner the ball gets rolling the better, but with a strong and effective stimulus, the turnaround will come.
However, our government in motion dictates the handling of the differences of opinion, between the proposal and the Senate, in the following way:
As a result of the differences in opinion between the president and the members of the Senate, the stimulus package does not go directly to the floor, as it would have if everyone was in agreement. The proposed stimulus package will go into several congressional committees. The House of Ways and Means panel will be one of these congressional committees. While the House and the Senate will possibly approve differing versions of the package, this will create end-game negotiations over a compromise bill and a second round of floor votes.
In essence, the President put the thought in the minds of the Senate, they rejected parts of the thought and the debate starts between the Senate and the Ways and Means committee – eventually, the House and the Senate come up with a “better” plan and it is put to a vote on the floor of the Senate and that decides whether to pass and execute the proposal or send it back through the process again – it sounds exhausting and time consuming under the circumstances but, it is what it is.
Politics – Yours and Mine
