WASHINGTON – With
negotiations over an economic stimulus package bogged down in partisan
bickering, The Concord Coalition said today that it is time for negotiators to
step back from their efforts to produce a compromise package and revisit the
issue, if necessary, when Congress reconvenes in January.
WASHINGTON – With
negotiations over an economic stimulus package bogged down in partisan
bickering, The Concord Coalition said today that it is time for negotiators to
step back from their efforts to produce a compromise package and revisit the
issue, if necessary, when Congress reconvenes in January.
"This is one package that does not need to be wrapped up for Christmas. A
great deal of fiscal and monetary stimulus is already in the pipeline.
Additional steps may or may not prove necessary, but there is no reason to
impose an artificial deadline for action. In fact, imposing such a deadline
greatly increases the likelihood that a compromise will be driven by the
understandable political desire to ‘do something’ rather than by the prospects
of actually stimulating the economy,” said Robert Bixby, Executive Director of
The Concord Coalition.
"It is long past the time when
any measures can be taken to boost demand during the holiday shopping season.
The logic of wrapping up a package before Christmas is now gone. What remains
is a traditional disagreement over tax and spending policy. Meanwhile, it is by
no means clear that the economy needs a stimulus bill, or whether the actions
under consideration would do much good. Indeed, some measures may do long-term
harm. Under such circumstances, it would be best to avoid taking any additional
measures in the name of economic stimulus until we have a better idea of the
impact September 11 has had on the economy. With a little patience, the
stimulus already in the pipeline and the natural recuperative powers of the
American economy may prove sufficient,” Bixby said.
“Moreover, long-term fiscal
discipline is still needed to prepare for the looming challenges of Social Security
and Medicare. It should not be squandered on dubious, and perhaps unnecessary,
fiscal stimulus plans,” said Bixby.
Bixby recommended that Congress and the Bush
Administration follow the advice of Paul Volcker, former Chairman of the
Federal Reserve Board and a member of The Concord Coalition Board of Directors,
who wrote in a
commentary published on December 12, 2001 in the Wall Street
Journal, “Surely, the time has come for the Congress to stop, look and
listen. Let’s see how the economy evolves over the holiday season. Let’s
evaluate the budget outlook next year in the light of progress on the military
front and military needs. Let’s re-evaluate the emergency needs of New York and
elsewhere before we compromise medium-term tax revenues, or spend money in ways
that will not stimulate the economy, and would instead crowd out other pressing
public priorities. In sum, let’s take the time necessary to respond
appropriately. A bad stimulus bill, conceived in haste with a melange of
inconsistent ingredients, is surely worse than no bill at all.”
