Congressmen Ponder Stimulus Effect

JANUARY 26, 2009              POLITICS / JOHN MAGINNIS 
 
   With its sub-freezing temperature, Inauguration Day in
Washington, D.C. was no time to be sitting in the shade. Yet
for rookie congressmen Bill Cassidy of Baton Rouge and Joseph
Cao of New Orleans, seated up against the U.S. Capitol's
marble facade, sharing the new president's view of the flag-
waving masses on the Mall, the vantage point on history was
spectacular, despite their shivering.

   "It was pretty cool," said Cassidy, figuratively,
literally.

   They were warmer an hour later but, like their Republican
colleagues, the freshmen start their new careers, for the most
part, still out in the cold.

   For all the promises by President Obama and congressional
leaders of inclusiveness and reaching across the aisle,
Democrats are calling the shots, especially on the first order
of business, the mega-dollar economic stimulus package.

   For Cassidy, the stimulus initiative represents a seismic
shift of political responsibility. Were he still in his old
job, a Louisiana state senator, he would be faced with voting
for hundreds of millions of dollars in budget cuts to higher
education and healthcare. Instead, as a congressman, the task
is to direct hundreds of billions in new spending and tax
cuts.

   The difference is that states are compelled to balance
their annual budgets, while Congress can just print more
money.
   So while the stimulus plan is going to happen, the question
remains how much good will it do.

   "It seems like rain falling on concrete," said Cassidy.
"Only so much money can be absorbed."

   Especially considering where it is to be absorbed. The dean
of the state’s House delegation, Congressman Rodney Alexander,
R-Quitman, voted against the bill in committee because, he
said, "I have a strong question if this is something that will
stimulate the economy or will stimulate government."

   There does seem to be a lot of bailing out of the federal
and state governments, with questionable effect on the overall
economy.

   For instance, the Medicaid portion of the package could
spell major relief for this state, like other states, which
are running way short on providing healthcare to the poor. It
would give a one-time increase of almost five percentage
points of the federal match for what states spend on Medicaid.
That would not increase Medicaid benefits for poor people,
but, rather, the state won’t have to cut back services for
them as much.

   The classic example of economic stimulus by government,
going back to the Works Progress Administration of the 1930s,
is spending on government infrastructure, which takes up about
half of the package. That comes in many forms, but, for
Louisiana, top priorities are highways and levees.

   Sens. Mary Landrieu and David Vitter have called on their
colleagues to include billions more for hurricane protection
levees that are not in the House bill. The Senate might also
increase the amount going to highways, as the House bill falls
short of what state officials and contractors hoped for. The
current measure contains $471 million for Louisiana
transportation projects and another $57 million for local
transit systems.

   That's no pittance, but the state must share 45 percent of
the highway amount with local governments, according to state
transportation secretary Bill Ankner. That would leave the
state far short on its $1.3 billion wish list of "shovel
ready" road work, most of which would go to big Interstate
projects. Less will now.

   A positive aspect of the package is what it doesn’t
contain, which are, at the president's insistence, earmarks.
Those are the specific projects that powerful congressmen and
influential lobbyists manage to get inserted into bills, such
as Alaska's "bridge to nowhere" and similar follies.

   This time, Congress is to appropriate by categories of
infrastructure projects, which federal agencies will specify
through formula-based funding and priority rankings. Of
course, members who know how the system works can still guide
money in preferred directions. One of those, Congressman
Charlie Melancon, D-Napoleonville, has coined a term for the
new practice: bookmarks.

   Most Republicans, for now, are withholding their rhetorical
fire, since too much yapping would just cause their states and
districts to be less stimulated. If the plan works, the nation
will be better for it. If it doesn’t, if the economy is still
hobbled in 2010, Republicans will have a lot to talk about and
Democrats much to answer for.