If this was to the be dawn of a new era of bipartisanship, it didn’t look like it today. President Obama’s stimulus package, a modified version of the original $825 billion plan, shaved off a few billion and still did not manage to get one Republican “yes” vote in the House. The final vote was 244 to 188.
The bill now moves to the Senate, where it will need to garner at least two “yes” votes from Republicans to pass.
Republicans cited weak tax cuts in the plan as a major factor for the “no” vote. House Minority Leader John Boehner (R-OH) summarized the objections by saying, “We have to act — we have to heal the ailing economy. The question is how to do it best; we think that fast-acting tax relief is the way to get it done.” Despite their beliefs, a Republican amendment to expand the amount of tax cuts in the bill failed in the House.
Tax cuts are not the answer. I hate paying taxes just as much as anyone but individual income taxes are not what is killing our economy… In much the same way that the tax rebate scheme in 2008 did not kick start the economy in any meaningful way, handing a few dollars back to taxpayers is not going to swiftly and significantly revitalize the economy.
Yeah, that’s not what a lot of folks want to hear, but it’s true. The package, as proposed, would put back about $9 into an individual taxpayer’s pocket per week. Would that $9 have kept Starbucks from laying off 6,700 jobs today? Or Caterpillar from making cuts of 20,000 jobs on yesterday? You and I both know the answer is no.
Do I have the solution? Of course not. If I did, I would totally have been the nominee for Treasury Secretary.
But I do know that when you’re bleeding profusely, you don’t suggest just taking an aspirin or two. It may make you think you feel better immediately but it really just thins your blood and slows down the chance that you’re actually going to heal.
We need some significant relief. Some parts of the proposed package make sense: credits for building and maintaining businesses; emphasis on research and development of energy alternatives; and commitment to improving our infrastructure. And let’s face it, the latter needs to happen, crappy economy or not. I know it sounds very “New Deal” and that freaks some folks out but we have crumbling roads and unsafe bridges. Why not kill two birds with one stone and pay someone – or a lot of someones – to fix it? Keep my silly $9 per week and pay someone to work.
Not convinced? Here’s some quick math for you. The proposed tax cuts for individuals – the $9 per taxpayer – worked out to about $168 billion. Billion. That’s the equivalent of paying 388,313 people a full time salary at $10/hour for a year. More than three times the massive layoffs announced this week.
It’s not permanent. It’s not flawless. And it’s not immediate. But neither is the silly $9/week to taxpayers. And even if you make it $10/week? Still not happening.
In business, we always say to think of the highest and best use of an asset. Is this package the highest and best use of our dollars?