HOUSE Republican Leader John Boehner

Giving a Voice to the “Stimulus Spending” Skeptics

In response to President-elect Obama’s request for Republican input, House Republicans formed a working group (led by Republican Whip Eric Cantor) aimed at developing constructive ideas that can be included in legislation to help put the nation’s economy on the path to recovery.

Yesterday, the working group held a hearing to discuss America’s economic recovery.  Joining the discussion were Governor Mitt Romney, Meg Whitman, Grover Norquist, Alex Brill, and Bill Beach.  In addition, the panel answered questions that were submitted for the panel by the American people via YouTube.  A video of the working group hearing is below.

In addition, Leader Boehner has solicited, and received, comments from prominent economists who are skeptical of Congressional Democrats’ trillion dollar spending plan.  Scholars’ opinions have continued to pour in, and they have been universally critical of the tax, spend, and borrow precepts of the Democratic proposal.  On January 7, Boehner released comments from dozens of skeptical economists, and since then, opinions have continued to stream in.

Following is some of the latest commentary made by economists about the impact of a massive government “stimulus spending” bill.   For a more detailed list, click here.

“I have a number of reservations about a major stimulus package. One is that it is not in any sense clear that the benefits justify the significant price tag of the package. Another concern is that the historical record of government stimulus programs is poor - I can’t think of a single fiscal stimulus program that demonstrably moderated a recession. But there is ample evidence based on peer-reviewed research that these programs have substantially damaged the U.S. economy, such as the New Deal programs in the 1930s. More recent stimulus attempts, such as the tax rebate in early 2008, did nothing but increase the deficit. The best policies are those that are evaluated carefully and not rushed out, and that are consistent with the key goals of long-run economic prosperity - broad-based tax reform that raises the incentives to work, save, and invest, promoting competition, and fostering economically open ties with other countries. Any fiscal policy should pass this test, and this one doesn’t seem to.”
-Lee Ohanian
Professor of Economics, University of California, Los Angeles
Director, Ettinger Family Program in Macroeconomic Research

“The stimulus plan is little more than a grossly-inefficient special-interest grab bag that will leave a massive burden for our grandchildren to pay and, in the meantime, deter development of more productive sectors of the economy in favor of those politically favored.”
-Roger Meiners
Professor of Economics, University of Texas at Arlington

Leader Boehner has repeatedly stated that “We can’t simply borrow and spend our way back to prosperity.”  Clearly many American economists tend to agree.

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Stimulus Spending Skeptics Speak Out

Since putting out the call for outside economists’ opinions on President-elect Obama’s proposed $1 trillion economic “stimulus” spending plan, we’ve been contacted by dozens of economists and academics eager to add their name to the list of stimulus spending skeptics. Below you will find selected entries from experts that agree that tax relief for families and small businesses, not more government spending, will help to get America’s economy moving again:

Jeffrey Miron
Senior Lecturer and Director of Undergraduate Studies
Department of Economics, Harvard University
http://www.economics.harvard.edu/faculty/miron

Any stimulus package should consist of permanent tax cuts rather than spending increases. The (limited) available evidence suggests that tax cuts are at least as effective as spending increases in stimulating the economy. Tax cuts help reduce the adverse incentives caused by high tax rates. And spending increases are likely to include numerous projects that do not pass normal cost-benefit criteria and are instead merely pork (e.g., repairing bridges to nowhere).

John Seater
Professor of Economics
Economics Dept., NC State Univ.
http://www4.ncsu.edu/~jjseater/

I worked 7 years as a Federal Reserve staff economist and have done research in and taught macroeconomics for 27 more years. There is no convincing evidence that stimulative fiscal policy is either feasible or effective. The recognition and action lags (ancient terms from the bygone Keynesian era) alone virtually always mean that the stimulus arrives after the recession is over, thus causing an undesirable distortion that impedes recovery…These aspects of fiscal policy have been known for more than a quarter century. However, if one does not like old evidence, Greg Mankiw on his blog recently cited more recent scholarship showing that Keynesian theory is inconsistent with the data. This I am strongly skeptical of President-elect Obama’s plans. Both theory and evidence are against them. What else do we require to reject them?

Michael Keran
Retired, Former Sr. VP & Director of Research
Federal Reserve Bank of San Francisco

Japan in the early and mid 1990s engaged in major fiscal stimulus focused on infrastructure projects with deficits equal to 7-8% of GDP and a cumulative Debt/GDP of almost 150%. None of this led to economic recovery until the late 1990s when the Bank of Japan engaged in quantitative easing of monetary policy and the Government of Japan finally introduced a taxpayer bailout of the banks. The Fed and Treasury in the US have already taken such actions. The Japanese experience suggests that additional fiscal stimulus will only add to the Debt without helping the economy.

Daniel J. Mitchell
Senior Fellow, CATO Institute
http://www.cato.org/people/daniel-mitchell

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12-10-08 Republican Leadership Stakeout

Republican Leader John Boehner and Conference Chairman Rep. Mike Pence discuss the House GOP no-bailout alternative for the American Auto industry.

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Washington Post Op-Ed: Republicans’ Road Back

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/06/AR2008110602568.html

While Republicans are disappointed by Tuesday’s results, we respect the American people’s decision and pledge to work with President-elect Barack Obama when it is in the best interest of our nation. Some Democrats and pundits may want to read Tuesday’s results as a repudiation of conservatism — a sign that Republicans should give Democrats on both ends of Pennsylvania Avenue a free ride. I don’t see it that way, and neither should Republicans across the country.

The next four years are critical to the future of our families, our economy and our country, and we have a responsibility to rebuild our party by fighting for the principles of freedom, opportunity, security and individual liberty — the principles upon which the GOP was founded. Recommitting ourselves to these principles means two things: vigorously fighting a far-left agenda that is out of step with the wishes of the vast majority of Americans and, more important, promoting superior Republican alternatives that prove that we offer a better vision for our country’s future.

America is still a center-right country. This election was neither a referendum in favor of the left’s approach to key issues nor a mandate for big government. Obama campaigned by masking liberal policies with moderate rhetoric to make his agenda more palatable to voters. Soon he will seek to advance these policies through a Congress that was purchased by liberal special interests such as unions, trial lawyers and radical environmentalists, and he’ll have a fight on his hands when he does so.

In record numbers, Americans voted on Tuesday for a skillful presidential nominee promising change, but “change” should not be confused with a license to raise taxes, drive up wasteful government spending, weaken our security, or give more power to Washington, Big Labor bosses and the trial bar. Americans did not vote for higher taxes to fund a redistribution of wealth; drastic cuts in funding for our troops; the end of secret ballots for workers participating in union elections; more costly obstacles to American energy production; or the imposition of government-run health care on employers and working families.

Republicans have a responsibility to offer a better way. We must reaffirm Americans’ faith in our party by reminding them why ours traditionally has been a party of reform rooted in freedom and security. This will not happen overnight. We must make the case one issue at a time, offering solutions to our country’s biggest challenges to earn back the American people’s trust and rebuild our majority.

Our most immediate challenge is creating new jobs and getting our economy moving in the right direction again. While Republicans have put forward a plan for economic growth and job creation, congressional Democrats are proposing hundreds of billions of dollars in new government spending masquerading as “economic stimulus.” To rebuild 401(k) plans and keep jobs here at home, we’ll offer tax relief for families and small businesses. And to lower fuel costs and create as many as a million new jobs, we’ll offer a comprehensive plan for more American energy.

We’ll also offer health-care reforms that empower patients and doctors, promote a strong military that keeps us on offense to protect the American people, and demand fiscal and ethical reforms to fix a broken Washington tarnished by scandals on both sides of the aisle. We have a responsibility to the American people to make sure our ideals are heard, and we expect these to be vigorous debates.

I wasn’t born a Republican. I grew up outside Cincinnati as one of 12 children. Our dad ran a bar. I became a Republican because I believe that if you work hard and believe in yourself, there is nothing you can’t achieve. That’s the American dream. And I look forward to leading Republicans in fighting for it. If we return to our roots, to our belief in freedom, opportunity, security and individual liberty, our party will come back stronger than ever.

In Congress, Republicans will work across party lines to find solutions to the immense challenges that confront our nation. But we’ll also stand firmly against policies that violate our principles — the same principles held by the vast majority of American families. We Republicans must renew our nation’s trust in us by offering better alternatives rooted in the reforms that define our party and by fighting for the American dream.

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Spreading Your Wealth Around

Below you will find “Spreading Your Wealth Around,” a brief report produced by House Republican Leader John Boehner (R-OH) with the help of House GOP committee ranking members and staff.  The document offers a representative sample (by no means an exhaustive list) of real bills and resolutions proposed by Democrats during the 110th Congress to take wealth from middle-class working Americans and redistribute it through big government programs. 

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Democrats Oppose Democrats’ Oppresive Rule

Today during debate on House Democrats’ massive $300 billion housing bailout, Rep. Marcy Kaptur (D-OH) joined Republicans in asking why the Democratic leadership is so afraid to allow any discussion on alternative ideas (click the above image for video):

… I rise today in reluctant opposition to the rules on both housing bills that are before us because they are not coming up before us in regular order, neither one is an open rule. On such an important subject… the membership should be afforded the respect our offices bestow to represent their people and allowed to amend and be heard in this body.

The Democrat leadership understands that its proposals won’t stand up to those of Republicans - or many of their own members. Unfortunately, it has become apparent that they will continue to deny anyone the right to offer alternatives.

Americans want real bipartisan solutions from Congress, not more payoffs to trial lawyers and scam artists. House Republicans will continue to push for responsible solutions to the housing downturn that keep taxes low, bring transparency to the market, and stand up for Americans who saved and invested responsibly.

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Rep. McCotter on Fiscal Integrity Task Force

John Hawkins at Right Wing News interviews House Policy Committee Chairman Thaddeus McCotter on the newly formed Fiscal Integrity Task (FIT) Force:

…The public should be aware of what the new Democratic Majority wants to do with your money. I think it could be reduced down to one simple phrase: the Democrats take and waste strategy. …Because they seem to think that every dime government spends right now is so perfectly spent that they have to raise people’s taxes to do all this wonderful redistribution of wealth. We would argue as Republicans — something of a lost art for the last couple of years — that in fact the government does not appropriately spend every dime of your hard earned money that it takes and the first place they should look is in the waste, fraud, and abuse that’s going on in the unfortunately overexpansive promises and entitlements that the government has made….That’s the place to start. You don’t start by promising to spend money because everything is done properly; you start by looking at the reality that the government wastes a lot of your money and you should always (cut) that before you go looking for (more money).

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Links for April 15, 2008

• Democrats for Colombia (Wall Street Journal Editorial)

If nothing else, Speaker Nancy Pelosi’s ploy last week to change House rules in order to kill the Colombia Free Trade Agreement is exposing how extreme her protectionism is. Yesterday, 35 former senior officials in Democratic Administrations and Democratic Members of Congress signed an open letter urging Congress to pass the Colombia pact.

“We believe this Agreement is in both our vital national security and economic interests,” the letter says. “We feel that the treaty should be considered as soon as possible and that any obstacles be quickly and amicably resolved.” Good luck with that last point given Ms. Pelosi’s eagerness to take orders from the AFL-CIO.

• Trade Follies (Redstate.com)

Either Nancy Pelosi doesn’t understand the nature of the U.S.-Colombia trade deal, or she thinks that she can fool the public. In any event, she makes a hash of things in trying to explain why she allowed for fast-track authority to expire–thus putting the deal on the back burner…One does not know whether to laugh or cry. American markets are already open to Colombia products. The deal opens Colombian markets to American products. How American workers do not benefit from having another market opened to the things they make is beyond comprehension.

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Democrats Again Reject Earmark Freeze Offered by Republicans

Following the release of the annual Citizens Against Government Waste Pig Book, House Republican leaders today forced a vote on a freeze on pork barrel projects. Unfortunately, Democrats rejected the GOP proposal by a vote of 215-199.Not surprisingly, a majority of Democrats including freshmen that Speaker Pelosi has “Showered with Pork,” declined to curb wasteful spending by enacting a one-year moratorium on taxpayer-funded earmarks.

Earlier this week the Associated Press reported on Pelosi’s apparent unwillingness to address Washington’s broken spending process:

As lawmakers returned Monday from a two-week spring break, House Speaker Nancy Pelosi quietly shelved the idea of a one-year moratorium on so-called earmarks, the $18 billion in pet projects that lawmakers sent to their home states this year.

Visit earmarkreform.house.gov for more information on House Republicans’ continuing efforts to enact meaningful spending reform.

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Podcast Update

Audio from today’s Republican Leadership stakeout can now be found on the House Republican Leader Podcast. If iTunes is installed on your computer, you can click here to subscribe.

MORE: Past episodes and more information on Podcasts

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