Thursday, February 05, 2009

Knowing When To Just Say No

There has been much discussion in the press and in the Tennessee blogosphere on both the Left and the Right about what to do with the expected federal money that will come our way
when the President's so-called stimulus package comes down the pike. As Karl Rove points out in today's Wall Street Journal, this plan isn't likely to achieve what the President says is its stated objective-the creation of massive numbers of new jobs for the American people:

Since December 2007, Americans lost 791,000 jobs in manufacturing, 681,000 jobs in professional and business services, 632,000 jobs in construction, 522,000 jobs in retail, 167,000 jobs in hospitality, and 576,000 jobs in the rest of the service industry. It would be logical for policy makers to focus on job creation in these sectors.

Instead, Democrats want to spend $88 billion to increase the federal share of Medicaid. What American will be hired by a small business, factory, retail shop, hotel, restaurant or service company because of this spending? The answer is very few.

In H.R. 1, there's $41 billion set aside for school districts, $1.5 billion for university research grants, $2 billion for Energy Department labs, and $3 billion for the National Science Foundation. Yet education is one of the few sectors that added jobs last year.

There's also $4 billion for health programs like obesity control and smoking cessation, $2 billion for the National Institutes of Health, $462 million for the Centers for Disease Control, and $900 million for pandemic flu preparations. Health care also added jobs last year.

So the package contains lots of appropriations that will expand the federal government to a size that is heretofore previously unheard of, and it will expand the government's reach to nearly every level of American life, but it fails to create jobs in the sectors where the employment is most needed.

Perhaps worse is the reality that this is an excuse to spend our money, not really a piece of job creation legislation.

There is also the question of timing. H.R. 1 spends $170 billion in fiscal 2009, $356 billion in fiscal 2010, and $293 billion in fiscal 2011 and after. Spending more in 2011 and beyond than this year tells Americans H.R. 1 is a mammoth spending bill, not a stimulus or jobs package.
What should Tennessee do if a large chunk of federal money comes our way? Could that money help us solve the problem of a seemingly increasing State budget deficit which the General Assembly is constitutionally obligated to address before it adjourns for the year? Yes, the money could provide a way for the Legislature to deal with the deficit, but it is very doubtful that this money will come with no strings attached. It must be expected that the feds will place all kinds of stipulations on how this money can be spent, despite the fact that Tennesseans know better what we need than Washington does.

If the federal government mandates a massive expansion of State government which Tennesseans will hold the bag for if there is a "recovery," the only thing Tennessee can and should do is to just say no to federal entrapment. We may have a rough road, but we do not need Washington taking too active an interest in our internal affairs.

Don't expect the Legislature to tell Washington no, but it would be nice if people on the Hill had the intestinal fortitude to do just that.

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At Tuesday, February 10, 2009 9:03:00 AM, Anonymous Anonymous said...

Karl Rove? Seriously? Yes, let's listen to one of the financial wizards that put us in the current economic crisis. The same Karl Rove who along with Georgie provided the genius tax breaks, refund checks, deregulation, etc. that did so well for the economy the past 8 years.


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