Once again Senator Tom Carper sent me a letter telling me how much smarter he is than I am and how I am too uninformed to understand the full impact of the "American Recovery and Reinvestment Act". I thought it was call the "stimulus" bill but that is too simple for such intelligent people I guess. The liberals had to change the name of it so us dummies would need their help understanding it.
Enjoy!
February 17, 2009
Dear Mr. James:
Thank you for contacting my office and letting me know of your concerns regarding the American Recovery and Reinvestment Act. I appreciate hearing your views on this important matter. I apologize for the length of this response, but the issues before us are complex, and I hope that you'll take a few minutes to read my response.
Let me begin by saying that I have heard from hundreds of Delawareans who, like yourself, expressed to me their opposition to this legislation, known to most as the stimulus package. Many people conveyed their concern with the overall size of the economic recovery proposal and contended that some of the spending provisions would not create jobs in the near-term. I share many of those same views, and agree with you that the bill that came to the Senate floor was far from perfect. Its cost was approaching a trillion dollars, and a number of its provisions did not directly stimulate the economy, create jobs, or start us on the long road to economic recovery. They shouldn't have been included in this proposal in the first place. But rather than accepting the bill as it was, I went to work with a bipartisan group of a dozen or so senators in an effort to bring common sense and purpose to the debate and to make the proposal - not a perfect one - but a better one.
As I'm sure you know, the challenges facing our economy are like nothing that our nation - and other nations -- have seen since the Great Depression. In the last year, Americans have lost over 3 million jobs including 1.8 million in the last three months alone, bringing our national unemployment rate to 7.6 percent with the worst still to come. The ongoing downturn in the housing market has resulted in a tidal wave of foreclosures and delinquencies, flooding our communities with thousands of blighted, boarded up homes. Moreover, as millions of Americans have witnessed the value of their homes, stocks, and pensions drop, consumers have hunkered down and largely stopped spending, making it even more difficult to lift our economy out of its deep recession. In response, leading economists from all sides of the political spectrum, from Alan Blinder to Martin Feldstein to Mark Zandi, have made it clear that our federal government has to act and act now.
During most recessions since World War II, the efforts by the Federal Reserve to reduce interest rates were generally far more effective in encouraging economic recovery than most actions taken by Congress. In fact, the Fed's ability to cut interest rates, often referred to as monetary policy, has helped to end every post-WWII recession within less than a year. The current recession, however, just entered its 15th month, and the Federal Reserve has exhausted its primary tool by lowering interest rates to essentially zero. Unfortunately, that has not done the job, and it has become necessary for Congress and the President to act. A wide cross-section of economists argue that sound, targeted fiscal policy from our executive and legislative branches can help complement the efforts of the Federal Reserve in order to reverse this economic downturn and eventually restore growth to avoid a prolonged recession.
In response, several weeks ago, the Obama administration and the 111th Congress began crafting the American Recovery and Reinvestment Act of 2009 to provide a combination of federal spending, tax cuts, and tax incentives to create jobs, promote investment, and help states like Delaware address their budget shortfalls and meet the growing needs of their citizens. At the same time, the legislation was intended to advance vital public policy goals like reducing harmful emissions, promoting energy independence, rebuilding our nation's decaying infrastructure and schools, and overhauling our inefficient health care system.
Many constituents, like you, have flooded my office with phone calls, emails and letters to say that they believed the measure was flawed and misguided. I listened carefully to these concerns, and want to let you know that I agreed with many of them. The legislation passed by the House of Representatives on January 29th along with the initial bill that emerged from the Senate Appropriations Committee was less than perfect. I have long believed that if something isn't perfect, we should try to make it better, and that's exactly what I set out to do.
For the better part of a week, I worked with a bipartisan group, led by Senator Ben Nelson (D-NE) and Senator Susan Collins (R-ME), to pare back a very substantial amount of money-$110 billion- in provisions that, while meritorious, did not belong in a bill whose main goals are economic recovery and job creation. We sought to make sure that more of the stimulus package was timely, targeted, and temporary, and that more of its spending provisions, as well as its tax cuts and tax incentives were better focused on creating jobs now and on producing real economic improvement soon. Our compromise agreement trimmed the bloated legislation from the House and Senate Committees to under $800 billion in targeted federal assistance over the next two years - roughly 60 percent spending and 40 percent tax cuts. While the Senate adopted the Nelson-Collins compromise on February 10th, that compromise was still far from perfect, and a House-Senate conference was formed to make further improvements.
The final version of the American Recovery and Reinvestment Act that emerged from the conference committee includes tax cuts for more than 95 percent of American working families: up to $400 for individuals and $800 for married couples. The bill is expected to create an estimated 3.5 million jobs -- including 11,000 in Delaware -- by putting Americans to work to begin rebuilding our nation's crumbling infrastructure, including roads, bridges, ports, railways, waterways, mass transit, and water and sewer systems. The bill invests in clean energy, energy efficiencies, and electric grid upgrades - which will not only reduce our energy costs and clean our nation's air, but will also make America more energy independent. This legislation provides energy tax incentives for the manufacturing and production of wind, biofuels and other renewable sources of energy that are crucial to creating green jobs and making Delaware's offshore wind farm competitive. The bill also includes the critical extension of emergency unemployment benefits in areas of high unemployment, while increasing food stamps benefits -- two temporary measures that most economists agree are both highly effective as stimulus.
Moreover, the legislation targets relief to recently unemployed workers to continue receiving affordable health insurance through COBRA, providing much needed assistance to some of the most vulnerable individuals and families affected by the economic crisis. The bill also makes possible important investments in health information technology in doctors' offices and hospitals across America - much like we've done in our V.A. system - saving lives and money while enhancing the productivity of health care providers in our country. In addition, the American Recovery and Reinvestment Act helps states that are being crushed under the cost of their Medicaid health care systems for low-income families without health care coverage. And, it also provides almost $54 billion for the State Fiscal Stabilization Fund to the 46 states, like Delaware, that are facing enormous budget deficits this year and next. These vital funds will help keep the size of classes from growing even larger, make much-needed repairs in many of our schools, and continue to provide essential community services like law enforcement and fire protection.
Finally, the American Recovery and Reinvestment Act attempts to address the root cause of the current economic downturn -- the housing crisis - by overhauling an ineffective homeowner refinancing program adopted last year, so that distressed Americans facing the prospect of foreclosure can have a more realistic and viable option to avoid foreclosure. In addition, the final version of the bill provides for a first-time homebuyer tax credit of $8,000 through December 31, 2009 that - coupled with 30-year, fixed-rate mortgage rates approaching 5 percent and much lower home prices -should help to jumpstart the housing market this year.
The American people have entrusted the Congress and the President with the responsibility to set aside politics and do what we believe is needed to strengthen the pillars of our nation's economy. Americans don't care if our ideas are liberal or conservative. Rather, they want us to work together to figure out what will work to pull us back from the precipice that we face and put our nation back on the path to recovery.
No one is pretending that the American Recovery and Reinvestment Act is perfect. No piece of legislation whose scope is that large will be. There are provisions I would like to add, and - frankly -some that I would like to remove; however, I do believe that our bipartisan efforts succeeded in making the bill better by reducing its overall cost and by focusing on putting Americans back to work on projects and initiatives that are worth doing. Ultimately, I believe in the resiliency of the American people and in our small state. I remain confident that as we now turn our attention to fixing our banking system, our economy eventually will emerge from this recession stronger, more competitive, and ready to continue leading the global economy in the 21st century.
Again, I apologize for the length of this response, and I do thank you for sharing your thoughts with me on this critical issue. Please do not hesitate to contact me if you have any further questions or comments about this or any other matter of importance to you and to our nation.
Sincerely,
Tom Carper
United States Senator
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