Sunday, February 21, 2010

MN-02 : Kline on the Stimulus - Abject Failure

John Kline (R-MN-02) responded to a question on Tim Penny’s radio program on the effects of the stimulus calling it an “Abject Failure”.
The question did not have the follow-up that was required … namely why did it fail and who is at fault.
The answer is John Kline.

Why John Kline … well first, he voted For the failed economic stimulus and now is watching other districts begin to recover.

Yep, if the discussion is about an “Abject Failure” of an economic stimulus, then it should be no surprise that the Recovery Rebates and Economic Stimulus for the American People Act of 2008 was a BIG Failure. This was not a surprise as the Congressional Budget Office and the Joint Committee on Taxation (JCT) estimated that H.R. 5140 would increase budget deficits by $152 billion in 2008 and by a net amount of $124 billion over the 2008-2018 period. You remember that stimulus complete with a $300 to $1200 rebate check … there was little complaining then … but fiscal conservatives warned of its flaws. Also not getting a lot of attention was the provisions that raised the loan limit (from $362,790 to $729,750) for the Federal Housing Administration’s (FHA’s) single-family program --- which no doubt eventually contributed to another piece of legislation that Kline supported. Yep, Kline voted For the Emergency Economic Stabilization Act of 2008 which is better known as TARP.
The objective of Bush’s stimulus was a few pennies to regular people in hopes that they would spend coupled with Tax Breaks for business. However, there was no incentive for the business to take immediate action. Business may elect to wait until customer activity picks up before deciding to increase employment or investment in equipment/facilities … hence it failed and a new stimulus was initiated by President Obama.

Now, that Obama is president, Kline has now voted against the American Recovery and Reinvestment Act of 2009. The Wall Street Journal accessed Obama’s stimulus as just starting out: Most of the stimulus spending so far has gone to state and local governments to plug holes in their schools, Medicaid and unemployment-benefits budgets. Spending on infrastructure projects is expected to pick up in 2010. About $180 billion of the funds allocated to various projects has been paid out. Tax cuts worth about $93 billion have also taken effect. An additional $320 billion in spending hasn't yet been handed out. A further $195 billion in tax cuts are due to flow through tax returns.

The Obama stimulus is working … as the NYT opined “There is virtually no dispute among economists that the stimulus prevented a bad recession from becoming much worse. Among other things, it has preserved or created 1.6 million to 1.8 million jobs, according to various private sector analyses, and it is expected, ultimately, to add a total of roughly 2.5 million jobs.

It’s way too early to call Obama’s stimulus an “Abject Failure” unless you reside in Minnesota’s Second District where John Kline is not getting any funding. Contrast the Second District with Tim Walz’s First District.
For example, the Recovery Act includes funding to help grow the emerging health IT industry which is expected to support tens of thousands of jobs ranging from nurses and pharmacy techs to IT technicians and trainers and South Central Technical College was awarded $4,506,101 . South Central President Keith Stover said "These new programs are designed to provide Southern Minnesota with the education necessary to achieve high-wage positions within the health care sector." Rep. Tim Walz said in a statement praising the funding "Not only will this funding create immediate jobs for program instructors, it will ensure that students and workers will have access to the training that will help them get high-paying jobs in new sectors of our economy."
That’s not the first time, South Central Technical College got grant money. WIRED (Workforce Innovation in Regional Economic Development) through the U.S. Department of Labor awarded $70,000 to fund the Shared Work Pilot Program.

And also this week, the U.S. Department of Agriculture as part of the American Recovery and Reinvestment Act announced that Southwest Minnesota Broadband Group (SWMBG), composed of the communities of Jackson, Lakefield, Windom, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake and Okabena, has been awarded $12.7 million in grant and loan funds to expand broadband Internet access in the region. The grant and loan combination along with private investment will provide high-speed Internet, voice and cable television to the participating communities.
These programs are available, but is Kline exercising any political effort to “stimulate” the Second District ? Voters in the Second District must look at the First District and wonder “why not us?”

Actually, he seems to be more concerned that Governor Pawlenty has planned to use federal monies to resolve the Minnesota budget problem. Kline said he may vote against the spending even if the governor needs it to balance the state budget. ‘‘There’s a big difference between opposing something and, once it becomes law, getting our share,’’ said Tom Hanson, Pawlenty’s main budget adviser.

Mr. Hanson, welcome to John Kline’s world … opposing Obama takes precedence over what Minnesotans need.
One observation that is becoming clearer every day is that John Kline's time in Congress has been an “Abject Failure” for the Second District.

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