Tuesday, February 3, 2009

Senators Gone Wild

I support a stimulus package, but the news reports of Senate negotiations make me nervous.

Dianne Feinstein is trying to slip in an extra $7 billion in unnamed water projects. (That might be good if it's repairing ancient, leaking sewer systems, but this makes me nervous given the current issues in state water policy). Barbara Mikulski is pushing tax deductible car loan interest!?!? On the other side of the aisle, we have "free market" Senate Republicans like Mitch McConnell pushing for price controls (in the form of legislated fixed mortgage rates), and John McCain saying Americans don't support the stimulus package because it's become a spending bill (of course it's a spending bill! that's what Americans have been asking for and the economy needs. Build roads, bridges, energy infrastructure, etc.).

All of these breaks (whether it is car tax breaks or artificially low mortgage rates) are going to be politically difficult to take away once they exist. One time spending items are what we need (preferably investing in badly needed deferred maintenance, infrastructure and energy with long-run payoffs). Couple this with some one-time transfers to state and local government, and some one-time tax rebates to help families. The key words here are one-time, short-term, and keeping it as simple as possible. When we are talking about permanent long-run changes to tax policy, health care, etc. then by all means let's be bi-partisan, filibuster and debate for months.

As disturbing as these Senate antics are, it is not nearly as disapointing as the rumors that the administration is going to bring back the original TARP idea of the governement buying bank's bad assets. I thought that disapeared with Paulson. I'm still holding out hope that this new TARP plan is better than I fear, but the stimulus circus isn't giving me much confidence in Washington rght now.

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