(D-Maine)
Across the country, more and more Americans are struggling to make ends meet. Unemployment has risen to 5 percent. Home values are dropping. Millions of Americans are getting hit with mortgage rate adjustments as the costs of health care, groceries, gasoline, home heating oil, and college educations that continue to rise.
Federal Reserve Board Chairman Bernanke has recently warned that the economy is weakening. The Federal Reserve seems ready to lower interest rates again to help jumpstart the economy, but many economists believe that monetary policy changes alone will not be sufficient or timely enough to prevent a recession.
Millions of Americans are looking to their elected representatives to quickly provide assistance. The health of our economy demands swift, bipartisan action.
Meetings regarding the economy and potential economic stimulus between congressional leaders, Federal Reserve Chairman Bernanke and Treasury Secretary Paulson have already taken place. And as I write this, Democrat and Republican leaders in the House and the Senate are set to meet with President Bush to discuss contents of a potential stimulus package. For now, there seems to be a feeling that bipartisanship can win out over partisan angling.
I am hopeful that a balanced plan is developed that restores consumer confidence and addresses the severe strains being felt by millions of our fellow Americans. Economists are near unanimous that a fiscal stimulus plan should adhere to the three Ts: it must be timely, targeted and temporary. In fact, on January 17, Federal Reserve Board Chairman Ben Bernanke told the House Budget Committee that a stimulus package should be quick, efficient, and “explicitly temporary” so as not to make our structural deficit worse.
The three Ts are also being talked about a lot on Capitol Hill – and that’s a good thing. It is critical that any stimulus not do more harm than good. By adhering to the three Ts, we can help make sure that any stimulus package is in the best interest of the taxpayer and the health of the overall economy.
For example, some economists have suggested that strengthening unemployment insurance would be a particularly effective stimulus. The benefits would go to workers who have lost their jobs, so the added income will be spent quickly and directly benefit those who need it most. It will also increase demand in the economy which is essential for any business growth. As the nonpartisan Congressional Budget Office director recently told the House Budget Committee, “research has shown that the unemployment insurance system is among the most effective dollar-for-dollar economic stabilizers that we have in terms of counterbalancing periods of economic weakness.”
Similarly, a temporary increase in Food Stamp allocations will immediately increase spending in the economy and help those in need. Increased funding for the Low Income Home Energy Assistance Program (LIHEAP) would also have a positive impact. I support including more LIHEAP funding in any stimulus legislation.
Other stimulus package components under consideration are money for state governments, including a temporary increase in Medicaid matching rates, tax rebates for lower to middle income taxpayers, and first-year expensing to encourage business investment.
I am hoping that this sense of urgency will produce results. But I also hope that it encourages the Congress and the White House to pass legislation to directly address the sub prime mortgage crisis. We are not going to successfully move our economy in a positive direction until these issues are resolved. I look forward to working in a bipartisan way to jumpstart our economy and provide some relief to American families.
