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.
