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Monday, January 28, 2008
AILING ECONOMY NEEDS SHOT IN THE ARM

In Nebraska, we are fortunate that our economic situation is better than much of the country thanks to a strong farm economy, a growing biofuels industry, and a more stable housing market but Congress and the President are working quickly and in a bi partisan way to help our faltering national economy and avoid a recession.

TIMELY - TARGETED - TEMPORARY

While the House's tax rebate bill is a great first step, I believe the Senate has an opportunity to improve the package by adding additional timely measures to stave off recession. As I did in 2003 when we passed an economic stimulus package, I am working with a bi-partisan group of senators and the Administration to address the economy with a stimulus package that is timely, targeted and temporary.

In addition to targeting tax rebates at those most likely to spend them – consumer spending is one of the engines that drive our economy – I would like to see assistance to states to head off tax hikes at the state level.

STATES MUST NOT BE OVERLOOKED

As a former governor, I understand that what the federal government does impacts state budgets and that it makes no sense to cut federal taxes if states have to raise taxes. A recent survey by the National Council of State Legislatures showed that many states are projecting revenue shortfalls or budget deficits this year raising the possibility of tax hikes or cuts in important programs.

The package passed in 2003 included a provision I fought for to provide $20 billion in fiscal relief for the states. It meant $108 million dollars for Nebraska in federal aid for temporary Medicaid assistance and block grants. This year, the National Governors Association has again asked that states not be overlooked. Many states are struggling and Congress should not turn a deaf ear when bipartisan governors ask us for help.  Especially when the tax package we are considering is estimated to cost the states an additional $4 billion in lost revenue from business taxes.

TRANSPORTATION – INFRASTRUCTURE - HOUSING

States' needs are different this time around, and I think flexibility is the key to providing useful fiscal relief to states. I would like to see targeted resources for transportation and infrastructure improvements for the states that would provide short term stimulus in jobs and state spending and long term growth from development.

We also need to look at ways to stimulate the housing market. I've proposed using state housing finance agencies to spur home purchases through a temporary increase in the cap on mortgage bonds so that state housing finance agencies can increase the number of loans they make to qualifying first-time homebuyers which makes good public policy sense.

WHAT ABOUT THE DEFICIT?

An economic stimulus package is not something done lightly. Those of us in Washington know that it will be paid for by the American people and that it will increase the deficit. We also know that if we don't do anything, then the economy drops, people are out of work, no longer paying taxes, and the deficit goes up anyway.  The deficit will be more harmed by a long-term recession than a short term stimulus package to help stave off a recession or at least make it shorter.  We do have to be very judicious with how much we put into a stimulus plan but it is important to do something because doing nothing will result in a worse situation. We are moving in a timely fashion to target temporary aid to help ensure the health of America’s overall economy.

Not everything we need to do to help our economy can be accomplished in the stimulus package the Senate will consider in the coming days, and I do not want to see Congress get bogged down in a debate that could delay passage of a stimulus bill. I intend to work with my colleagues to address the important issues facing our economy throughout this session of Congress.

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