According to the federal government’s Recovery.org website, $16 billion in stimulus bill contracts have “saved or created” 30,000 jobs. This means that for every $533,000 spent, one job was created. The White House has tried to spin the numbers saying that they represent the “positive” results of the stimulus plan. I don’t think the American people would consider spending ten times the median income to save a single job a success. Even worse, this is coming with borrowed money that will eventually have to be paid back with interest. Additionally, the Administration is once again hiding behind its bogus “saved or created” label. It is economically dubious to claim that the stimulus legislation is “saving” a defined amount of jobs.

Senate Bill Taxes Employer Provided Health Benefits

The Baucus healthcare bill passed out of the Senate Finance Committee this week, but it still faces an uphill battle to pass the full Senate. In part, this is because the bill pays for a government takeover of healthcare with an extensive array of new taxes and cuts to Medicare. This bill would, for the first time, tax the health benefits provided by an employer. While Baucus has portrayed this 40 percent excise tax as only covering “Cadillac” plans, many middle class Americans have high benefit plans that fall in this category. Additionally, the tax is not indexed, so as healthcare costs rise, more and more plans will be subject to the tax. Americans want their healthcare costs to decrease, not increase because of new taxes. Unfortunately, the Democrats need to find a way to pay for their plan and that means new taxes at almost every level of care.

New Consumer Financial Protection Agency Could Increase Red Tape

In response to last year’s Wall Street failures and government bailouts, Democratic leadership is looking to create a new regulatory agency, the Consumer Financial Protection Agency (CFPA). While protecting consumers sounds like a good idea, this new agency could, in fact, hurt people looking to create a new business or buy a home. The CFPA would be a new agency that would not replace or consolidate the work of the seven current agencies that oversee banking and financial products.  Additionally, the new law creating the CFPA would allow individual states to set more stringent regulations which could lead to confusion and increased costs for litigation and compliance. To comply with all these new rules, banks and other financial institutions may have to reduce lending which would hurt small businesses and prospective homeowners. Tightening access to credit during a recession will only prolong the economic downturn. We need to reform Wall Street, but new regulations need to be carefully constructed to ensure that Main Street businesses aren’t harmed in the process.

NIH Wastes Stimulus Money on Foreign Studies

In yet more bad news about how stimulus dollars are being spent, the National Institutes of Health has been using some of the $8.2 billion provided in the legislation to fund studies conducted in foreign countries. In St. Petersburg, Russia, $65,000 is going to study the relationship between HIV and sex. In Thailand and Malaysia, NIH is spending $700,000 to study tobacco sales. Another $73,000 study is looking into whether the Asian tradition of dragon boat racing enhances the lives of cancer survivors. Clearly, these programs do nothing to help job growth in the United States. It’s just more evidence that government spending does not effectively stimulate the economy.

Quote of the Week

“I want everybody to eat, drink, and gamble in excess.”
--Rep. Shelley Berkley (D-NV), upon induction into the Washington Spirits Society. Berkley represents Las Vegas, Nevada.