Lawmakers on the House Ways and Means Committee heard testimony on October 29 from state officials and industry experts on whether a $150-billion stimulus package loaded with spending on shovel-ready infrastructure projects and higher funding for unemployment insurance claims would help Americans during the current economic slowdown. Lawmakers hinted that the House might return to Congress for a lame-duck session in mid-November, possibly during the week of November 17, to try to pass legislation that would head off an economic recession.
In October, Congress passed the Emergency Economic Stabilization Act of 2008 (P.L. 110-343), a financial stabilization package that fundamentally altered the relationship between the government and the markets (TAXDAY, 2008/10/06, W.1), making even its supporters nervous about the long-term implications, said ranking Ways and Means member Jim McCrery, R-La. "Unfortunately, those efforts have failed to get the economy kick-started, and the calls are growing louder for yet another round of stimulus," he said. McCrery warned that anything that passed the House must also win bipartisan Senate and White House approval.
Committee Chairman Charles B. Rangel, D-N.Y., said he favors spending on roads and bridges, increases in unemployment insurance and more help for low-income Americans. In addition, states and towns are facing lower tax revenues from declining property values, and they could use direct financial help from the federal government, other lawmakers said. Among the other ideas floated at the hearing were higher health care and food stamp funding, building more schools and libraries, easing pension funding rules and more child support enforcement assistance for parents.
Rangel said he hopes committee lawmakers will encourage both the Democratic and Republican leadership of the House to return to Washington after the election. He said lawmakers should "see what we can do to provide assistance to working families as well as local and state governments as we have done for the banking and financial sectors."
In seeking help from Congress, New York Governor David A. Paterson told lawmakers that governors can only cut so much before they begin to jeopardize their fundamental responsibilities to constituents. "Unfortunately, the cruel irony is that, at the time when citizens need their state governments the most, state governments are least equipped to help them because of plummeting revenues," he said.
South Carolina Governor Mark Sanford warned lawmakers that any increased spending in an economic stimulus package would be counterproductive because it would result in a higher federal debt that would likely require higher taxes to offset in future years. Instead, Sanford suggested that Congress give states relief from billions of dollars in unfunded mandates, such as Real ID, higher minimum wages, No Child Left Behind, Medicare prescription drug plans, bio-terrorism upgrades and food stamp funding. "Common sense voices from both sides of the aisle are raising red flags about our national deficit, the debt and these unfunded liabilities," he said.
Transportation Committee Hearing
House Transportation and Infrastructure Committee Chairman James L. Oberstar, D-Minn., said at a committee hearing on October 29 that the need for real jobs has grown "acute," adding that the House and Senate will consider a new economic recovery and job creation initiative two weeks after the November 4 election.
"Infrastructure investment creates family-wage construction jobs, and spin-off benefits that ripple throughout the economy," Oberstar said. He noted that committee staff from both parties would meet again following the hearing and "assemble the elements" for a bill that will be considered when the house reconvenes on November 17.
Rep. John Mica, R-Fla., ranking member of the House Transportation and Infrastructure Committee, added that every billion dollars spent on infrastructure results in 35,000 new jobs. "I think that people out there that I've talked to...would prefer a paycheck, rather than an unemployment check. And we can do it," Mica said.
By Sarah Borchersen-Keto and Stephen K. Cooper, CCH News Staff
Ways and Means Release: Ways and Means Hearing Adds to Call for Main Street Economic Recovery Package