Congress reconvened in January and already Washington is in the midst of a heated debate on our nation’s economy. The U.S. economy is slowly recovering, but as job losses continue to mount – 1.7 million jobs have been lost since 2001 – and the stock market hovers in place, the calls for an economic stimulus package grow louder.

On January 8, I joined with fellow fiscal conservatives to send a letter to the President stating our priorities for economic stimulus. Above all, we want a plan that is fast-acting and temporary, and which will stimulate the economy without hurting prospects for long-term growth. We told the President we were willing to be flexible on the final composition of the plan, provided it meets our goals.

The President has introduced a $674 billion plan he says will stimulate the economy and promote growth. I certainly support portions of the President’s proposal, such as acceleration of marriage penalty tax relief and Alternative Minimum Tax relief. But the centerpiece of the President’s plan, accounting for half the total cost, is the elimination of taxation on corporate dividends. The plan also accelerates tax cuts that were part of the President’s original tax cut that I voted for.

While I support tax relief and voted for the President’s tax cut in 2001, I agree with several moderate Republicans who have expressed concerns about the President’s proposal. Because only a fraction of the proposed tax cut would take effect this year, I do not believe it will stimulate the economy. And I do not believe we can afford such an expensive plan at a time when we’re experiencing huge deficits and fighting a war.

Our businesses and workers are hurting now. We need to stimulate the economy now. But the President’s plan only has an impact of $59 billion this year. In a $10 trillion economy, a $59 billion tax cut would barely cause a ripple.

In later years, the size of the tax cuts increase. The majority of those cuts come from the elimination of the dividend tax (more on that in a minute.) But the plan’s partial fix of the Alternative Minimum Tax – a tax snaring more and more middle-class families – ends in 2005. If you already have to pay the AMT, you know what a burden it is. If you don’t, count your blessings, but hope that Congress and the President pass a real fix to this looming problem.

In addition to questions about the effectiveness of a plan that doesn’t really kick in for a year or more, I have serious concerns about the plan’s damage to our economy in the long-term. It makes no sense to try and stimulate the economy now, if the rising debt causes interest rates to climb.

The stated price tag on this plan is $674 billion. The real cost of the plan, however, jumps to nearly one trillion dollars when you factor in increases in the national debt and the interest we must pay to maintain that debt.

Plus, rising deficits mean rising interest rates. Economists project an all-time record deficit of $350 billion next year. The national debt has already cleared $6 trillion and that number continues to increase. The record low interest rates we are currently experiencing will not survive the pressure of this mounting red ink. Rising interest rates make it costlier for businesses and consumers to borrow money, stifling the economy.

Finally, I have concerns about the mechanics of the plan’s centerpiece: “elimination” of taxation of corporate dividends. First off, most Kansans have their investments in 401(k)s and IRAs, already making the dividends tax-free. Secondly, the actual mechanics of the plan are overly complicated and have tax lawyers salivating.

“Eliminating the dividend tax” sounds simple, but the plan is more complicated than that. Taxes on dividends will be eliminated, but only on dividends paid out by companies that pay federal taxes. While this stops companies that incorporate in Bermuda to avoid U.S. taxes from getting a benefit, it also prevents investors in companies that aren’t profitable – or profitable enough – from getting the benefit.

Finally, many governors – Republicans included – have expressed grave concerns about the negative impact this proposal would have on state revenues, at a time when states like Kansas are experiencing massive deficits. I am not opposed to this tax cut in concept, but I am opposed to this specific proposal at this time.

We need to get this economy moving again -- the sooner the better. Tax cuts can help, but only if they are fast-acting and don’t hurt our long-term growth prospects. I hope Congress and the President are able to come to an agreement on such a plan, because Kansas ’ businesses and workers are watching and waiting for help.