This week the so-called stimulus package heads to the Senate.  The House version was bad enough. But it seems the Senate intends to make it even worse:

http://online.wsj.com/article/SB123358404214039275.html

Here is how the Wall Street Journal described what’s going on in the Senate:

“Florida citrus growers, California wine growers and a range of agricultural interests are pushing a tiny change that would allow farmers to more quickly depreciate new fields. High-tech and pharmaceutical companies want to save billions in taxes by including a plan that would allow them to bring overseas profits back home at lower tax rates. Labor unions are pressing Congress to make sure that new government funding for green technology results in jobs with good pay and benefits for workers.”

Again, I raise the simple question: how much of this is going to create jobs? In my opinion, not much.  And notice who is able to get the Senate to include their provisions: big agriculture, the high-tech industry, pharmaceuticals.  These folks have money and that means they have lobbyists.  The rest of us don’t have lobbyists.

Funny, but I thought the new administration was going to be tough on lobbyists.

-Randy Hill

This week the stimulus package moves closer to becoming law.  As previously stated on this blog, Congress should start over.  But the attitude of Congressional leaders seems to be: “Don’t bother me with the facts!”  I’m not sure they even know what’s in the bill.  Fortunately, some members of the media have looked inside it.  And what they saw wasn’t pretty:

http://online.wsj.com/article/SB123310466514522309.html

In business, I’ve learned the difference between spending and investment.  Spending you pay for; investment pays for itself.  But the package being considered in Congress is almost entirely spending.  Here’s how the Wall Street Journal described it:

“Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There’s another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.  Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus.”

In short, this bill is too much spending and too little investment.

Can Congress come up with a better plan?

Yes they can.

-Randy Hill