What Republican Leaders Deem Wasteful in the Proposed Stimulus Plan – Do You Agree?

It doesn’t matter where you stand on the political spectrum, but I think we can all agree that the $885 billion over $900 billion proposed stimulus package is a lot of money. Especially when you consider the existing TARP stimulus that was around $350 billion $700 billion, and the $160 billion or so that was sent out in the form of rebate checks last year. Since we’re putting a lot of money on the line, it’s only fair that we make sure it’s being spent wisely and it actually stimulates the economy.

Of course, we have two political parties that have differing views on what is appropriate in terms of stimulus. That being said, the republicans have recently put together a list of what they feel is wasteful spending in the proposed senate stimulus bill. The list adds up to about $19 billion, or around 2% of the total proposed spending. It seems like 2% is a drop in the bucket, and in the grand scheme of things, it might be. But we’re still talking about $19 billion dollars. That’s more than the GDP of some small countries and U.S. states.

So, what’s on the list? 

  •  $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.
  • A $246 million tax break for Hollywood movie producers to buy motion picture film.
  • $650 million for the digital television converter box coupon program.
  • $88 million for the Coast Guard to design a new polar icebreaker (arctic ship).
  • $448 million for constructing the Department of Homeland Security headquarters.
  • $248 million for furniture at the new Homeland Security headquarters.
  • $600 million to buy hybrid vehicles for federal employees.
  • $400 million for the Centers for Disease Control to screen and prevent STD’s.
  • $1.4 billion for rural waste disposal programs.
  • $125 million for the Washington sewer system.
  • $150 million for Smithsonian museum facilities.
  • $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion.
  • $75 million for “smoking cessation activities.”
  • $200 million for public computer centers at community colleges.
  • $75 million for salaries of employees at the FBI.
  • $25 million for tribal alcohol and substance abuse reduction.
  • $500 million for flood reduction projects on the Mississippi River.
  • $10 million to inspect canals in urban areas.
  • $6 billion to turn federal buildings into “green” buildings.
  • $500 million for state and local fire stations.
  • $650 million for wildland fire management on forest service lands.
  • $1.2 billion for “youth activities,” including youth summer job programs.
  • $88 million for renovating the headquarters of the Public Health Service.
  • $412 million for CDC buildings and property.
  • $500 million for building and repairing National Institutes of Health facilities in Bethesda, Maryland.
  • $160 million for “paid volunteers” at the Corporation for National and Community Service.
  • $5.5 million for “energy efficiency initiatives” at the Department of Veterans Affairs National Cemetery Administration.
  • $850 million for Amtrak.
  • $100 million for reducing the hazard of lead-based paint.
  • $75 million to construct a “security training” facility for State Department Security officers when they can be trained at existing facilities of other agencies.
  • $110 million to the Farm Service Agency to upgrade computer systems.
  • $200 million in funding for the lease of alternative energy vehicles for use on military installations.

That is quite the list. And I’ll be honest, most of what’s on that list are things that would be good for the country. Even so, do all of these things work to actually stimulate the economy? That is what this bill is proposed to do after all. For instance, $448 million to build, and nearly $250 million to furnish the new homeland security headquarters. Really? Homeland security has been around for a while now, why didn’t they get a headquarters when the economy was doing well? How many jobs will that $700 million really create? Will that improve our financial markets? Will it ease the credit crisis? No. How about an additional $75 million for the FBI employees? Unless that is being used to bring in more new workers (I don’t know, maybe it is), that won’t stimulate our economy. 

At the same time, there are plenty of things on this list that I don’t think are wasteful at all. Just take the $500 million for state and local fire stations. This is a vital public service, and with tax revenues down, municipalities are having a tough time providing all the services they need. And $200 million to purchase computer equipment for community colleges? This is fantastic! It puts money right into the economy, and also improves the accessibility of education for those who can’t afford major universities. And the youth activities to improve summer job opportunities, again, this is something that directly impacts the bottom line. 

So, I’m just interested to hear what others think. There is a lot of self-serving on the government’s part to work on their own buildings and provide things for their own employees, but there are also a number of items that seem like no-brainers in terms of stimulating the economy.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

29 comments
deepali
deepali

I don't understand the "this is a spending bill, not stimulus" statements. How else do you stimulate the economy but by putting money into it?

I am biased, being a liberal libertarian, but I am frustrated by Republicans and conservative Democrats who are just railing at nothing and have not offered anything better. We know that spending provides more stimulus than tax cuts (multiplier effect), but the Senate takes out the things we KNOW will work (based on good evidence). So what is the point of this bill then?

I notice there is a lot of stuff on this list that's federal spending for federal infrastructure. That's arguably stimulus for DC, which doesn't get to make its own budget and has to rely on stuff like this.

Chris at textadmarket
Chris at textadmarket

It still says a lot to me that they would give the auto makers such a runaround just a while back then have no problem handing over much, much more to people that don't have as many jobs hanging in the balance.

Jim
Jim

From this site:
http://www.hlswatch.com/2009/02/05/objections-to-dhs-funding-in-stimulus-bill-are-a-red-herring/

This line is misleadingly written:
$248 million for furniture at the new Homeland Security headquarters.

Here is what the legislation actually says the DHS investment is for:

“ for the ‘‘Office of the Under Secretary for Management’’, $248,000,000, to remain available until September 30, 2011, solely for planning, design, and construction costs, including site security, information technology infrastructure, furniture, fixtures, and related costs to consolidate the Department of Homeland Security headquarters: Provided, That no later than 60 days after the date of enactment of this Act, the Secretary of Homeland Security, in consultation with the Administrator of General Services, shall submit to the Committees on Appropriations of the Senate and the House of Representatives a plan for the expenditure of these funds.”

So clearly that $248M is meant for a lot more than just furniture. If they say its for furniture alone then it makes it sound like they're spending a 1/4 billion on fancy chairs or something which isn't the case.

don
don

"The list adds up to about $19 billion, or around 2% of the total proposed spending.....................But we’re still talking about $19 billion dollars. That’s more than the GDP of some small countries and U.S. states"

Just thinking out lout.......how much of this $19 billion do you suppose we might be able to fund this with the absurd and obscene bonuses that were recently paid out by the financial institutions? how much was that $18-20 billion? and how many people did that $18-20 billion benefit? and how much of this will be realized in taxes that the US government can us to mitigate the crisis?

Asa
Asa

How to put this…yes an NO
No to raises NO MORE TAX BREAKS, YES to new jobs. But also remember that this needs to create many Jobs, and not a fat payday for consultants and engineering advisors. No to a Homeland security HQ, and its furniture. But a emphatic YES to flood prevention improvements to the Mississippi river flood plain. This will stimulate the economy the way the Big Dig stimulated and sustained the economy in Massachusetts through some rough patches. But when it ends, like the Big Dig did, you need to have stimulated businesses to the point of a critical mass where some things become self sustaining and not dependent on government spending…because then we get no where fast without Uncle Sam spending…that’s not independence its more like addiction. As long as the money goes to innovation and invention in some way it will create industry and services that will create more jobs and definitively stimulate the broader economy. The by product of the Bush doctirine is that it enriched the few…and so the many suffer..

anon
anon

A $246 million tax break for Hollywood movie producers to buy motion picture film.

Now this one is hard to defend. Those poor underfunded producers? This is hardly a public good.

Unfortunately, it's going to be even harder defending the bonuses on Wall St after taking TARP money.

anon
anon

Keynes would have preferred that the money be used for the public good though, I think the digging allegory was to make his (and your) point clear.

$850 million for Amtrak.

Darn. I wish they would have cut this, but also cut highway funding, and used both the monies for health care. As a side benefit, we'd get to see more rail lines get built (by private companies).

thomas
thomas

Man I really hate this bill. It is clearly a spending bill and not a stimulus. Most of this bill is just years and years of past rejected proposals that are getting lumped together and sold as stimulus.

Creating work isn't stimulus, and thst's what a lot of the so called job creation is. A bunch of busy work to put up the illusion of a job.

I do find it sad that people stopped caring after November and just say "oh, this is politics." When more than half the country voted for change, was this what they were expecting? How do all these things help YOU and YOUR family?

Mike
Mike

What I would like to see is a list of where all the House Republicans are from beside a list of all the areas that would benefit from this spending. Then, we'll see if they truly think this is wasteful.

Max
Max

I see now that someone else referenced the hole-digging comment.

@ David: as someone who works with a lot of public data, the decennial census is a huge deal and deserves more funding than it currently gets. This is literally the foundation on which many policies are made and debated. Simply put, if you don't know the reality, your policies will suck no matter how brilliant you are. So $1 billion more for the Census sounds like a deal to me.

Max
Max

To paraphrase John Maynard Keynes, the leading scholar of his time on fiscal stimuli, you could pay people money to dig holes in the ground and then fill them, and it would stimulate the economy. Any time you pay people, particularly those who will turn around and spend their pay, you are creating a stimulus. To argue whether or not particular components represent "necessary" investments misses the point.

Those who lament the size of the stimulus miss the point: it has to be big to have an effect. Also in reference to the size, if one excludes the measures in the above list that would clearly stimulate the economy (money for construction activities in particular), the total is something like 1% of the stimulus bill. For any bill in Congress, that's a trifling amount of pork. To concern yourself with that 1% is to buy into the Republican's attempts to distract everyone in the hopes that nothing will get done and the economy will collapse further.

James
James

The world has gone insane. It's not a question of whether these things are good for the country. Anyone can compile a massive list of things that would improve the country. It's a question of the best use of funds.

It's a lesson no different from one many americans are learning right now. It's the national equivalent of spending a month's salary on a brand new hand bag, versus savings some money and getting the roof patched.

Liberals, as usual, are unhinged. I expected greater appreciation of fiscal responsibilty from a financial blog.

Jermaine H.
Jermaine H.

First time commenter here. I like most of the ideas on this list. I think infrastructure spending will help the construction and manufacturing industries some. I don't think spending money for anti-smoking campaigns should be included, the tax credit for Hollywood producers to buy motion picture film (huh? can somebody explain this?), and the coal plant in Illinois unless it can be proven that the project can be done efficiently. These are better than the "Bridges to Nowhere" pork barrel projects. I'm glad that the money is going to important issues.

I'm more nervous about the people Obama are selecting for various positions. Why do they all have tax problems and iffy connections to the corporate world? Maybe he should start finding people outside of Washington. But I still have hope in Obama.

rudie
rudie

I think that the money to "green" and/or weatherize gov't buildings is money well spent. It stimulates the economy in the form of jobs to do these things, and in the long run, it should end up saving the gov't money in the form of increased efficiency and lower electricity, water, heating, and air conditioning. It's a down payment on a savings that will last for decades.

We kind of have a perfect storm when it comes to infrastructure spending and stimulating the economy. If we need something to "throw money at" to create jobs etc, there is a laundry list of failing roads, bridges, power lines, sewer lines, gov't services at all levels (not just federal) that need to be fixed, updated, improved, etc. So rather than digging holes and filling them up, or building "bridges to nowhere", we could actually be improving the lives of Americans by improving our basic infrastructure.

Max
Max

There needs to be more money in this bill to create jobs, that's what stimulates the economy. Though recently some of this has been reduced. I saw in a report earlier today that the $75 million for the anti-smoking has been cut as well as the money for programs aimed at preventing STDs. Here's the vid:
http://www.newsy.com/videos/obama_s_push_to_move_fast/

David
David

Yes and no - I think some of these things will stimulate the economy in the form of jobs, services, and goods needed to be bought. BUT, I hate stuff like $1B for a census when we are in this much trouble. I am not an expert on these things, but I would imagine $1B spent on something else would go a lot further, no? I do like the funding for mass transit though, its about time after the billions we give to the airlines.

Will
Will

No. Not even a little bit. The analogy is ridiculous, our national economy does not function like a family. I'm not saying that we should go out and spend until our currency is all out of wack and we have bankrupted ourselves. But government spending does work to stimulate the economy and that is what we need if we ever want to pay off the debts incurred under the Bush Administration. Individual families do need to watch their spending more carefully now, but our government should be looking for projects to spend money on that will provide jobs to the people and help to improve the infrastructure of our nation and better prepare us for the future.

Customers Revenge
Customers Revenge

Tex: Think of it more like getting your kids to play together instead of playing by themselves. Maybe you have to go out and buy a boardgame or do some work to invent a game that will get everyone playing together. And hey, if the toys all allow for group play then you need fewer toys!

Michael
Michael

Tex hit the nail on the head. Who else besides the government would think that the answer to financial problems is to spend more. While some of the programs do seem reasonable when are we going to start paying for them. At some point this spending has to stop and the goverment has to start pay for it, and we all know where the revenue comes from you and me.

Tex
Tex

So would you recommend this same extreme spending strategy for a debt-burdened household with a recent significant decrease in overall net worth?

Curiously, I don't recall reading that kind of advice on this site in the past.

PS: I didn't realize the PRON lobby stood to gain so much from this bill!

Customers Revenge
Customers Revenge

The stimulus is that these items support buying goods and services, which Americans will probably make. Especially the construction projects.

You could stimulate the economy even by hiring people to dig holes and fill them up again. I think that's basically what they're doing. Just find a bunch of big projects to spend money on and hire people.

Will
Will

Whether or not we need the Department of Homeland Security is a separate issue. But, the current offices of DHS are spread out across Washington, DC. The proposal that this piece of the stimulus is referring them to is their plan to move to the campus of (the former) St. Elizabeth's Hospital in SE Washington, DC. This is a property with a great deal of historical significance to it and the fight over this plan has been going on for years. The plan would put in way more building space/parking than should ever fit on the site and would ultimately become a fortress in a community that desperately needs some economic development, i.e. a mixed used development that has been proposed

Hank
Hank

Very interesting list! My question is, "Where are the current offices of the Dept. of Homeland Security?" Do we really even need this department? Wasn't it redundant to start with and a knee jerk reaction after 9/11?

Jeremy
Jeremy

Good catch, goldberry. I forgot the second half of the TARP funds became available last week. I don't think it has all been allocated yet, but I'm sure it's only a matter of time before that money is carefully spent ;)

goldberry
goldberry

TARP was 700 billion. Released in two increments of 350 billion each.

Miranda
Miranda

Some I agree with, some I don't. What's really scary is that I'm becoming numb to the number "trillion." After all, since December 2007, $7 trillion has been spent on economic stimulus. Most of that isn't coming in the form of large near trillion dollar packages. Most of it is done in billions and millions, in small bits of legislation and through other channels. I'm not sure what $1 trillion more is actually going to accomplish at this point.

nickel
nickel

I agree. While many of these things sound like good ideas, it's not clear how they'd stimulate the economy.

Will
Will

Are all of those things necessary to stimulate the economy? No. Is that the point of the bill? Yes. Yet this list doesn't bother me in the least and I'm not sure that I would consider this "pork" either. Some of these measures are not things that would be passed on their own and that is too bad. So the stimulus package becomes the vehicle by which the administration can make progress on some really important issues.