Weekly Column of U.S. Senator Lamar Alexander (R-Tenn.) - Refocusing the Stimulus

Posted on February 1, 2009

The so-called “stimulus bill” coming to the Senate floor next week needs a truth in packaging label – it’s becoming a grab bag of spending and it’s an astonishing amount of money. It’s already up to $900 billion and every single penny of that money has to be borrowed. So if you add the interest on that $900 billion for the next ten years, the true cost is $1.2 trillion. Just to give you an idea of how enormous it is, Tennessee stands to receive $4 billion from the House package. By way of comparison, the nearly 4 percent income tax proposed by Governor Sundquist that was so unpopular a few years ago would have only raised $400 million per year. This would be like placing a 20 percent income tax on the people of Tennessee. There’s a limit to the debt our country can afford and still be a strong country. Our country is in a severe economic situation and Congress needs to try to work with the President in the best way we can to help solve the problem. I believe that we do need a stimulus package, but the bill passed by the House needs to be seriously refocused: 1. First we should fix the real problem which is housing. 2. After that the best stimulus would be to let taxpayers keep more of their own money instead of the government spending their money. 3. We should stop borrowing hundreds of billions of dollars to spend on projects that we don’t need. Fixing the housing market needs to be our first priority because housing is what’s at the heart of our nation’s current economic problems. There are a few options out there right now, such as offering a 4 percent, 30-year mortgage to every credit-worthy American which would be subsidized by the government to try to create more demand for housing and help get credit flowing again. Other good proposals include a $15,000 tax credit for home buyers, and programs through the FDIC to help homeowners stay in their homes rather than be foreclosed. These measures might cost a few hundred billion but we believe that money would be a lot better spent focused on housing than on a grab bag of spending programs such as those in the House stimulus bill. So far, the stimulus has rolled through Congress like a freight train. The amount of debt and amount of money that we are considering here is staggering. It is far more important is to get it right than it is to get it done within a matter of a few days. Republicans have not yet had a chance to influence the bill. It’s going too fast, and I hope that we will have a chance to have serious bipartisan talks about this as it is debated on the Senate floor this week.