‘This simpler, targeted plan gets at the root of the problem, which is housing’

Washington, DC, Tuesday, February 3, 2009, from the Office of Senator Mitch McConnell

U.S. Senate Republican Leader Mitch McConnell made the following remarks on the Senate floor Tuesday regarding a bipartisan path forward to fix the housing problem and put more money in the pocket of the taxpayer:

Evidently the President met with Congressional Democrats last night. And it’s my hope that he took the opportunity to impress upon them the urgency of passing an economic stimulus bill that works. I think it’s safe to say that the version House Democrats approved last week would not.

Most of the infrastructure projects it includes wouldn’t impact the economy for at least a year. Permanent spending would expand by more than $200 billion. And, as just about everybody knows by now, the House bill was loaded with wasteful spending.

Unfortunately, the version Senate Democrats put together isn’t a whole lot better. President Obama said 75% of the bill’s discretionary projects should be paid for within two years. Yet more than half of this spending in the Senate version wouldn’t be spent for another two years.

President Obama said 40% of the bill should be tax relief. Yet less than a third of the spending in the Senate version would go to tax relief. And, like the House bill, the spending portion in the Senate version is simply way too big. If you include the interest payments, the total cost of the Senate Democrat bill is nearly $1.3 trillion. So I can’t imagine President Obama is terribly pleased with the proposals Democrats in the House or the Senate have put forward. And I’m hoping he convinced them last night that it’s time to put together a bill that gives an immediate jolt to the economy and creates jobs now.

President Obama has acknowledged that Senate Republicans have a number of good ideas that he’d like to incorporate into the final bill. So has the Senior Senator from New York. Republicans will be pursuing those ideas this week — and how they’d help President Obama achieve his goals for the stimulus bill.

Republicans think we can send the President a simpler, more targeted stimulus bill that gets right at the root of our current economic troubles, and which doesn’t waste money that we don’t have on projects that don’t create jobs now.

Most people recognize that housing is at the root of the current economic downturn. So we should fix this problem before we do anything else. Republicans believe that one way to do that is to provide government-backed, 30-year fixed mortgages at approximately 4% to any credit-worthy borrower, reducing monthly mortgage payments and increasing demand for homes. According to this proposal, the average family would see its monthly mortgage payment drop by over $400 a month, which comes out to over $5,000 a year. Over the life of a 30-year loan, that’s a savings of over $150,000.

Next, in order to get money into the economy quickly, Republicans propose that we cut income tax rates for working Americans right away. The federal government imposes a 10% tax on married couples for income up to $16,700. By cutting that rate in half, we’d put about $500 into the pocket of every working family and give an immediate jolt to the economy. Income between $16,700 and $67,900 is taxed at 15%. Republicans would cut that rate to 10%, putting another $1,100 into the pockets of working couples. And single filers would get similar rate reductions. In other words, everyone who works and pays income tax would see an immediate increase in pay. This simpler, targeted plan gets at the root of the problem, which is housing. And it puts money in people’s pockets immediately.

President Obama asked Congress to put together a bill without wasteful spending that creates jobs now. Republicans have better ideas for doing both. We look forward to having the chance to explain those ideas this week to the American people and to be able to vote on them.

Comment

I do not think Republicans are simply being obstructionist in opposing the Democratic proposal. The Democratic super spending proposal is simply a bad bill. The Republican proposal is a more effective and immediate approach to stimulating the economy.

I think we need a stimulus bill but not the one that is proposed by Democratic leaders. Republicans cannot get everything they want of course, but if Obama wants bi-partisan support for a stimulus bill and a better bill, he needs to ask Democrats to meet Republicans half way. Unless the proposed stimulas bill is greatly revamped, Republicans should stay united and hang tough. If Democrats do not want to compromise, then let them ram though a partisan Democratic bill without Republican support.

Top Stories