Senate Stimulus Bill Includes more Unrelated Tax Cuts; would Create Less Jobs

The Senate Stimulus Package Focuses More On Tax Cuts And Less On Jobs

While things are changing rapidly as the House of Representatives and the Senate negotiate differences in the stimulus bills passed over the last week, critics are pointing out several deficiencies in the Senate Stimulus bill passed yesterday.

The Center on Budget and Policy Priorities reports that the Senate bill will be less effective as stimulus because it focuses more on tax cuts:

“The Senate has reduced spending, a fair amount of which was well-designed to stimulate the economy such as funding for state fiscal relief and school construction, and substituted new or expanded tax cuts that are not targeted and are unlikely to provide a substantial boost to the economy.”

The organization says that the expanded homebuyer credit, deductions related to new car purchases, and relief from the Alternative Minimum Tax would cost $116 billion over the next 11 years but would do little to improve the economic situation.

According to an analysis by the Center for American Progress, the Senate bill will also create 9 to 12% fewer jobs.

Changes in the Senate Bill versus the House Bill

Other changes in the Senate bill include:

  • $40 billion less for states facing massive budget deficits, half the amount provided by the House bill. States are facing $350 billion in deficits over the next two and a half years.
  • Larger tax breaks to money losing companies.

On Energy:

  • The Senate bill includes provision to transfer $500 million in loan guarantees for renewable energy projects to the Innovative Technology Loan Guarantee Program established under the Energy Policy Act of 2005. That program disproportionately supports nuclear power plants and “coal to liquid fuel” projects.
  • The House bill provides $6.2 billion to the weatherization assistance program, while the Senate bill provides less than half that amount, at a total of $2.9 billion. The weatherization assistance program provides funding for the installation of efficiency measures in low-income households.
  • The House bill has $6 billion to make federal buildings more energy efficient, which would reduce federal energy bills by $2 billion annually while employing thousands of people. The Senate program would spend only $2.5 billion for this purpose.
  • The House bill has $2.5 billion in funding for the Department of Housing and Urban Development’s energy and green retrofit program for assisted housing. The Senate has merely $118 million for this purpose. This program would create many jobs while reducing energy bills for publicly assisted homes.
  • The House bill allocates $2.4 billion for research and demonstration purposes of “carbon capture-and-storage” technology. The Senate allocation of $4.6 billion can also go toward funding plant efficiency improvements for integration with carbon capture technology.
  • The House bill provides $500 million for energy efficient manufacturing demonstration projects, which capture the waste heat energy of industrial facilities. The Senate bill provides no funding for such programs.
  • The House bill specifically allocates $500 million to green jobs training, out of a total of $4 billion for job training programs. The Senate bill has $250 million for job training in “high growth and emerging industry sectors,” which includes energy efficiency and renewable energy jobs.

On Healthcare:

  • The Senate bill excludes a House provision that would make Medicaid available to low-income and other unemployed workers.
  • The Senate bill initially provided support to help move the health care system toward better health promotion with support for immunizations, screenings, and other preventive service. This was eliminated by an amendment.
  • The Senate legislation, like the House bill, initially provided investments in workforce training to get more qualified workers into these positions, but an amendment eliminated this provision and missed an opportunity to expand and protect our health workforce.
  • An amendment reducing Senate investment in health information technology effectively downgrades support for technology jobs and needed industry reform.
Advertisements

Author: mediamouse

Grand Rapids independent media // mediamouse.org