As the 111th Congress gaveled to order in early January, lawmakers returned to Washington with a tall order: fix the sluggish economy.
Obviously that’s easier said than done. The current economic downturn is considered to be the nation’s worst since the Great Depression. The dismal holiday shopping season underscored shaky consumer confidence as joblessness climbs, the mortgage industry rewires itself among a troubled real estate market, lending slowly thaws and business investment sags.
The Federal Reserve handles monetary policy and in the last year has lowered rates to near-zero to jump-start the financial sector. The new Congress and the President-elect are working now to jump-start demand with an economic stimulus package.
Last fall, Congress approved up to $700 billion for the Troubled Asset Relief Program to address the credit crisis and instability in the financial system. I’ve raised concerns about mismanaged stewardship of tax dollars and called for stronger oversight measures to reduce the risk of wasteful spending. As Congress considers an even larger economic stimulus package to get the economy moving in the right direction, taxpayers must get the most bang for the buck.
As ranking member of the Senate Finance Committee, I’m working on economic recovery proposals pertaining to health insurance, unemployment benefits and taxes. It’s clear the nation’s economic pump needs more priming. At the same time, the Federal Treasury doesn’t grow money on trees. It comes from taxpayers. Tax dollars spent in the name of economic stimulus ought to serve as investment towards productive economic growth and job creation. The best way to help grow a family’s budget is job security, and the lower the tax burden on families and individuals, the better. I’m keeping up the pressure to promote tax incentives that promote investment, job creation and economic growth. Public dollars should help trigger private investment, not displace it.
While many worthy public infrastructure projects exist, the trick lies in separating the meatfrom the fat. Let’s hope Congress has learned its lesson about approving funds for Bridges to Nowhere. Bleeding the Federal Treasury dry to pay for pet projects from A to Z may be a lobbyists dream come true. But K Street’s good fortune tends to be a taxpayer’s worst nightmare. Spending alone won’t grow the economic pie. And deficit spending poses another risk as the federal government puts itself at the mercy of foreign creditors and squeezes access to credit for investment in the private sector. Right now, we’re looking at deficits that dwarf anything seen since 1946.
As the 44th President of the United States prepares to take the oath of office on Inauguration Day, I share the American electorate’s hope that prosperity will return sooner rather than later. The President-elect has signaled a desire to act boldly with a stimulus proposal that could reach perhaps $1 trillion. Budget forecasts already project the federal deficit to reach $1 trillion by Sept. 30. And that’s even without the stimulus proposal.
The bottom line is that a weakened economy doesn’t give big spenders a license to saddle future generations of taxpayers with colossal debt. Considering the looming financial shortfalls facing entitlement programs with the retirement of the baby boomers, it would be irresponsible for Washington to dig the ditch deeper than it already is.
Congress needs to put fiscal policy ahead of political paybacks and prime the economic pump with the right tools that will help shovel our way back to prosperity.