Cornyn's Statement on Stimulus

U.S. Sen. John Cornyn, R-Texas, a member of the Senate Finance committee, made the following remarks on the Senate floor Friday:

“The Administration and many of my colleagues have argued that we cannot rely on the same strategies that got our economy into this crisis to get us out of it.  I agree.  I am voting against the stimulus bill because I believe it replicates a failed strategy. 

"Some of my colleagues have claimed that a nay vote means we’d rather do nothing.  That’s not true.  We understand the economy’s in crisis. 

“This week the President of the Federal Reserve Bank in Dallas said that Texas is officially in recession – which confirmed what small businesses have been telling me for weeks.

“We don’t dispute that we’re in a crisis – we just disagree on what to do about it. 

“A stimulus bill would have been a good idea if it had been focused on the right priorities.  That was President Obama’s original vision.  The Administration said it wanted a bill that was timely, targeted, and temporary.  If the bill had reflected that spirit, then the President’s goal of 80 votes in the Senate might well have been in reach.

“But we never saw the bill the President said he wanted.  Instead, we saw Speaker Pelosi and House Democrats’ bill which redefined ‘stimulus’ to mean nearly anything any of them desired, with predictable results. 

“Many programs in the bill are wasteful and unnecessary – and are earmarks in all but name.
 
“Golf carts?  Art projects?  Company cars and new buildings for federal employees?  And those are only some of the spending programs we know about.
 
“The fact is:  none of us have had a chance to review all the items in this bill – and really understand what we’re voting on today.  We won’t have even 24 hours to look at the conference report before voting on it – a report negotiated in secret – and which it seemed to be briefed to reporters before many members of Congress.

“We are told not to worry.  The people of Texas are promised many benefits in this bill – at least $10 billion worth, according to the Democratic Policy Committee.  They’ve made a list for each of our states – to help all of us focus on the benefits. 

“Yet each of our states will also bear our share of the costs.  My state’s share of the cost of this bill is about $90 billion, if you include the interest. 

“Now I’m not an accountant, and I’m not sure that the Democratic Policy Committee’s numbers are accurate.  But accumulating $90 billion in debt to receive about $10 billion in benefits doesn’t seem like a good deal to me.  And I suspect the deal isn’t must better for any of our states.

“The math doesn’t work on the national scale either.  Even if this bill does ‘create or preserve’ up to 4 million jobs, that means we’re paying about $300,000 per job, which is more than 5 times the median household income in this country. 

“If we gave that money directly to the people through lower taxes, they’d ‘create and preserve’ far more jobs than government seems able to do. 

“But now the tax relief in the bill is even weaker tea than it was before – averaging about $8 a week according to some accounts.

“The simple truth is that government is inefficient at creating jobs – and this morning the Wall Street Journal explained one of the reasons why. 

“Many federal agencies like the Department of Energy simply don’t have the administrative capacity to spend tax dollars quickly. 

“I expect the same is true for many state and local governments – but we in Congress haven’t taken the time to find out.  Instead, we are determined to turn up the water pressure across all levels of government – without thinking about which pipes can handle the load, and which will burst.

“Nobody knows what will happen once this bill is actually implemented – but the long-term impact is becoming more clear.  The Congressional Budget Office estimates that the stimulus bill will actually reduce growth over the next ten years. 

“That means millions of our children will have fewer opportunities when they enter the workforce, even as they inherit more public debt than any generation in history.

“The tragedy of this trillion-dollar bill is that it ignores a hard lesson learned:  we cannot spend our way to prosperity.  During the Bush Administration, we strengthened our homeland defenses, delivered a prescription drug benefit for seniors, and increased federal support for education – yet the additional spending did not protect our economy from recession. 

“And in last year’s stimulus package, we sent out rebate checks and authorized billions in emergency spending, but they had no effect.

“We must recognize the policies that haven’t worked – and get behind the ones that will.  First, we must address the root of the problem in the housing market.  Homeowners are struggling with high mortgage payments, and our financial system is burdened with bad debt. 

“So Republicans offered a plan to lower mortgage rates to as low as four percent for millions of homeowners.  This approach would have quickly cut a huge expense in many family budgets, and reduce the risk of more foreclosures. 

“In the long term, this plan would also strengthen the balance sheets of lenders, and give more young families the opportunity to own their own home.

“Second, we must deliver the kind of broad-based tax relief that works.  Last year’s tax rebates failed to spur new job growth because taxpayers are smart:  they recognized the money was a one-time deal, so many saved it or used it to reduce their debt.  And the tax relief in the current bill is too small to make much of a difference.

“So last week I offered an amendment that would have reduced the 10 percent income tax bracket to 5 percent, and lowered the tax bill for everyone who must file a tax return by April 15. 

“Lowering marginal tax rates can be a game-changer for every taxpayer’s budget, and for our economy.  This approach worked for John F. Kennedy in the 1960s, it worked for Ronald Reagan in the 1980s, and it can work for us in the 21st Century.

“Third, we must support additional funding for programs that are delivering results, and for urgent national priorities.  One such priority is national defense and border security.  The National Guard Bureau reports that many units, after fighting wars and responding to natural disasters, have billions of dollars in unmet equipment needs. 

“I met with General Rodriguez of the Texas National Guard this week.  He told me that the brave men and women he commands could put new equipment to use right away – and that the same is true for Guard and Reserve units across the country.

“Defense and homeland security should be higher priorities in this bill – because we know that spending in these areas is effective as economic stimulus.  In fact, many economists believe that defense spending after Pearl Harbor, not domestic spending after the New Deal, truly lifted our nation out of the Great Depression.

“A better approach to the stimulus bill was available, and remains available. 

“I pledge to work with the Administration to ensure that the accountability and transparency measures promised in the package are effective. 

“I will continue to build support for alternatives that will create more opportunity for our families and small businesses – and restore America’s economic strength.

“But I must vote no on the bill we have before us today.”