Fausta’s Blog

Earlier today I was in a teleconference with Sen. Jeff Sessions to discuss the “stimulus” bill.

John Hawkins has the opening statement

I still think people are not recognizing the size of this bill. It’s the largest spending program in the history of the country so far. The CBO is calculating that the interest alone will be 340 billion dollars over the next 10 years. So, it’s really a 1.2 trillion dollar bill. The Iraq war cost 500 billion to give you something to compare it with.

Some senators may vote for cloture, but not vote for the bill. They don’t deserve credit for voting against this bill. If the Democrats don’t get cloture, they will have to come back to us and talk and we can get a better bill.

The easiest, quickest way for Obama to save 600 billion dollars is to not spend it now. He will not, in 8 years, cut entitlement bills 600 billion dollars. This bill moves us more rapidly than we want to admit to a state dominated economy.

A lot of the spending in this bill is for things that should be part of our normal spending — Headstart, Pell Grants, etc. Why should that be in the stimulus? If you can’t get more money in the regular bill, you add it to the stimulus package, which is in effect an emergency spending package — and there are no budget points of order. It’s particularly irresponsible. If we raise the funds for these programs, they won’t be cut in the future. It’s the new baseline.

There is growing opposition to this bill. The WAPO said Obama needs to step in. The Chamber of Commerce is opposing this one. Scarborough trashes it every day. USA Today is questioning it.

That’s good because this bill is dangerous to the Republic.

Check John’s blog for his questions. Noel Shepperd asked about the size of the bill, and its effect on the federal budget baseline, since we have no historic record of consistently reducing spending. Sen. Sessions replied that

“nobody’s asked about this effect. This bill will be, as a percentage of GDP, the highest since World War 2. Will we panic every time we face a tough recession and mortgage our children’s future? Fundamentally, the worst numbers we have do not show the recession to be as bad as the 1980s.”

My question was, outside of the budget committee, how many have read it, considering how long the bill is, and how it’s been rushed through? (You can read the 700-page PDF file of the bill here)

“Very few senators have sat and read it but more and more get memoranda with the provision summaries of it, and [Sessions] believes concern is rising. At some point the Democrat leadership might change it before the votes for fear it won’t pass, or come back with changes if it doesn’t pass.”

Dan Riehl found the call informative, and troubling:

The non-partisan Congressional Budget Office puts the interest on this one bill alone at $430 billion, making it a $1.3 trillion dollar bill. A look at actual economic indicators suggests we are not more significantly worse off than several past recessions from which the nation escaped without anything like this amount of spending on the part of government.

In terms of misunderstanding he cited that fact that only $30 billion or 1% of the bill was actually targeted at roads and bridges, or “infrastructure”, and any notion that this is somehow an infrastructure targeted bill is misleading at best. Another concern on that note would be that a sudden increase on infrastructure spending across the many states would undermine the competitive bidding process, allowing contractors to charge premium prices for whatever work did get done. The supply demand metrics of contractor demand versus availability would shift significantly to favor contractors in that sector, meaning even those monies would be poorly spent.

Calling the bill “unprincipled, un-targeted and irresponsible” he also pointed out that Senators voting for cloture while suggesting they would later vote against the bill for political cover would be accomplishing nothing, as the bill would likely garner the 51 votes needed for passage on the Floor.

This bill is a disaster.

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Tags: bailout, Jeff Sessions

This entry was posted on Monday, February 2nd, 2009 at 8:28 pm and is filed under Democrats, Fausta's blog, business, economics, economy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.