Commenting on the stimulus bill that was passed in the House and a variation of it that is being debated in the Senate, President Obama said there were:
“very modest differences”
between the bills being debated and what Republicans want in a stimulus bill.
I find that hard to believe.
By any measure, the bill that came out of the House and the bill being debated in the Senate are not “modestly different” from even Obama’s outline for the bill!
You may remember that President Obama’s original outline for the bill was for a $750 billion bill with 40% of the bill targeted on tax cuts. What has been approved thus far is an $819 billion package with only 22% of “tax cuts.” Meanwhile, the Senate bill being debated, is $900 billion with 29% attributed to “tax cuts.”
The “tax cuts” in both the House and Senate bill are sleight of hand at best. The bulk of the “tax cuts” in the house bill are really one time tax credits and not tax cuts in any classical sense. It’s easy to see the difference. Where as true tax cuts change the amount of money a taxpayer has to spend on an ongoing basis, a tax credit is a one time event. The problem with credits is that they do not change spending habits on an ongoing basis. In fact, what was seen in last year’s rebate, is that a significant portion of the refund went to paying down loans or into savings and not into direct “stimulation” of the economy. The increase in “tax cuts” in the Senate version is mostly due to a one year patch to the AMT so that it doesn’t drag more taxpayers into it….a “patch” that has been routinely done so it’s really not a true reduction of any kind.
Modest does not describe anything about either of the bills being discussed. Not the size, the impact on the growth of government nor the differences between them or what Republicans ought to want. The only thing “modest” in this entire scenario is the logic of those who complained about the spending by Republicans but suddenly believe that spending is AOK now.
