Senate Stimulus: Steal from the Poor to Give to the Affluent

ProPublica has done a comparison of the House and Senate stimulus packages. It shows, in striking fashion, how much the Grassley-Isakson-Coburn-Collins-Bad Nelson bill skews spending away from the poor–the most stimulative kind of spending, since these people need this money badly and would spend it right away–to the upper middle class:

Aid to Low-Income Families Total $124,186,000,000 $97,230,900,000 ▼$26,955,100,000
Health insurance aid   $2,272,000,000 ▲$2,272,000,000
Unemployment benefits $36,000,000,000 $39,490,000,000 ▲$3,490,000,000
COBRA healthcare for unemployed $30,300,000,000 $20,000,000,000 ▼$10,300,000,000
Hunger programs $21,176,000,000 $17,100,000,000 ▼$4,076,000,000
Housing $13,510,000,000 $8,600,000,000 ▼$4,910,000,000
Medicaid for unemployed $8,600,000,000   ▼$8,600,000,000
Job training and placement $5,120,000,000 $4,300,000,000 ▼$820,000,000
Disabled and elderly programs $4,200,000,000   ▼$4,200,000,000
Other $5,280,000,000 $5,468,900,000 ▲$188,900,000

 The Senate bill took out $27 billion in spending for the poor, ending with a total of $97 billion.

Tax Cuts Total $282,284,000,000 $358,162,000,000 ▲$75,878,000,000
Manufacturing   $1,603,000,000 ▲$1,603,000,000
Individuals $184,637,000,000 $302,198,000,000 $117,561,000,000
State and local governments $42,957,000,000 $14,272,000,000 ▼$28,685,000,000
Businesses $29,483,000,000 $17,546,000,000 ▼$11,937,000,000
Energy projects $19,961,000,000 $17,682,000,000 ▼$2,279,000,000
Other $5,246,000,000 $4,861,000,000 ▼$385,000,000

The Senate bill put in $117 billion in new tax cuts for individuals–more money than the entire $97 billion they give for those items ProPublica classifies as "Aid to Low-Income Families."

Those tax cuts consist primarily of two things: the AMT patch ($64 billion), which affects primarily upper middle class people in areas with high home prices, and the house flipping subsidy (up to $48 billion), the full credit of which is only available if inidviduals pay at least $7,.500 in taxes a year (there’s also $10-11 billion for auto sales incentives).

There are other reasons to oppose including these two tax cuts in the stimulus. The AMT patch, which isn’t really stimulative in the first place, would get passed and properly off-set in the budget appropriations process anyway. And the house flipping subsidy does little else than put money in realtor’s pockets. 

But the biggest reason is this: we’re taking food, housing, and medical care away from those who desperately need it, to put more money in the pockets of the upper middle class.

The Senate "Moderates’" reverse Robin Hood: Steal from the poor and give to the affluent!

29 replies
  1. Ishmael says:

    $27 billion – such a small price to pay for “bipartisanship”, I’m sure that those patriots who are going to have to get by on fewer food stamps will be grateful while they read about everything the “centrists” have done for them in the Wall Street Journal! As for Bad Nelson, what is it about asshole conservative “Democratic” senators from Nebraska who try to kneecap newly elected Democratic presidents?

  2. jdmckay says:

    Well, sure… there’s reason for outrage there if either proposal actually did something worthwhile. AFAIC, both of ‘em are entirely ignorant finger-in-the-dike unfocused boondoggles.

    Neither is going to get the job done… period. Geithner’s plans are only going to exacerbate things. Since election, there has been one disappointment after another in his cabinet/advisor choices along w/wishy-washy policy statements across the board, but enough uncertainty to leave room for a little hope.

    For me, these last couple days solidifies any confidence I had in this guy. His Town Halls are nice energy and all, and he looks good behind the mic. But that’s not so hard to BS when he’s throwing his audience temporary relief for much bigger problems the same folks don’t understand at all.

    I don’t think Obama has any vision about any of this based on what I’ve seen. Huge, huge disappointment.

    Tell me, what’s US economy going to look like after this money’s been spent? How, in any way, does all this outlay address the dearth of organic, homegrown, meaningfull economic production that repubs have decimated?

    Answer: it doesn’t.

    AFAIC, this ensures US SOL will solidify in downward trend. The utter lack of citizenry understanding of why, the nuts and bolts of things, will give all the space needed for cascading failures to solidify.

    It’s all going to further pull us apart. If you think the wingnuts ability to manipulate minds was troubling last 8 yrs, you ain’t seen nothing yet.

    Oh well…

  3. Leen says:

    64 billion for the upper middle class…House flipping 48 billion. Yowser Bet many of those folks call themselves religious folks too. (sorry am tired of people hiding their selfishness behind those little crosses around their necks)

  4. wavpeac says:

    My initial observation of Obama remains the same. I think he was extremely naive to the true problems facing America. I believe we have been victims of financial terrorism. I think that foreign entities are (like Saudi and China) are pulling the strings in our finance industry. I think that they used greed as the bait and it worked. I hope I am wrong. I am extremely disappointed in his handling of the stimulus package, and the torture issue.

    The torture issue gives me nightmares. It’s really hard to feel proud of a country that would not follow it’s own laws in regard to such an important issue. Shame.

    • Leen says:

      Just listened to Turley again. “no question war crimes” This man’s words about the crimes that took place the last 8 years should be spread far and wide. Went straight to the guts of the matter

  5. klynn says:

    Hey, EW this is a great comparative look at the bills. This needs to be the theme to mobilize around. Today.

    I do think Obama has moved forward with the Homeland Security National Infrastructure Reinvestment Bank as a means to address the spending needed in infrastructure…Unfortunately, I am not sure how that will help the “shovel ready” projects which would create a great number of jobs in less than three months.

  6. WilliamOckham says:

    I’m very interested to see what comes out of the conference committee because then we’ll know what’s really going on. Way back in the olden days (BCE, Before the Cheney Era), there was a budgeting tactic so common it had a name, “knife the baby”. A new administration would come in and tell all the departments (via OMB) that they would have to reduce their budgets. Each department would make a dramatic show of eliminating or drastically reducing funding for the programs that had the most political support in Congress. The bureaucrats knew that their allies in Congress would restore funding for those initiatives and they would end up getting pretty much everything they wanted.

    I’m really wondering if the ‘moderates’ are pulling the same scam. They pulled out the stuff that has the most support in the House. Maybe they’re hoping that the conference committee reports back a bill that looks pretty much exactly like the House bill. Then, they can turn around and say, “Well, we tried, but that mean old Nancy Pelosi made us vote for this terrible bill.”

    • klynn says:

      I think some of that is going to happen.

      I am still perplexed by the sheer rudeness on behalf of Congress by totally ignoring the National Governors Association. Something is going on but I am not sure what.

      As I have been stating in my Oxdown diaries, one “other” show of bipartisanship (”true bipartisanship” at that, because this has support from progressives on the far left and conservatives on the far right as well as moderates-both) will be Obama’s National Infrastructure Bank. And he’ll probably let Dodd have the publicity along with Repub co-sponsors from the 110th (Although Hagel will not be there). My prediction has been that Obama will sign everything on February 13th, a year from when he introduced the Infrastructure Bank as a part of his Homeland Security policy.

      It’s just a prediction…

  7. Synoia says:

    Thanks for the presentation. A suggestion for the columns. Headings?

    And which is the line item for the “house flipping subsidy”?

    • perris says:

      that would be the end of any fourth estate

      the tubes now take the reigns, paper and broadcast media are now owned by corporate concerns, once net nuetrality is lost the fourth estate will be no more

  8. Blub says:

    this is despicable, but unfortunately this is the historical role of the Senate. Doesn’t mean its right, or that we shouldn’t push to change it, but this is pretty much what the Senate’s been doing since 1780 – helping patricians instead of the everyman, who is supposedly represented by the House ;-P I guess it was kind of designed to do that, constitutionally speaking.

  9. Hugh says:

    Thanks for putting out those numbers. It really looks like that we are going to flounder into a depression. When that happens, a lot of these same politicians are going to come out with their standard “No one could have predicted.” As I keep writing, a bad stimulus coupled with a failure to nationalize banks is a sure recipe for depression. The stimulus and Geithner’s pumping more money into the financial system may keep us out of depression for as long as 18 months but both are so poorly structured that it all could collapse in less than a year.

  10. Funnydiva2002 says:

    OK, pet peeve on the Stimulus discussion (in MSM mainly).
    In times like these, WHO CARES if helping the least fortunate isn’t considered “stimulative enough” (whatever the f*ck that means). It’s like The Economy (TM) is somehow the only thing that matters and needs/is worthy of helping. How sick is that when literally millions of American People are already suffering, with millions more of us mere weeks or months away from joining them? Why is it so hard for good Dems to start framing the debate this way: “Look, we’re in the worst recession since the 30’s, and it’s likely to get worse before it gets better. Helping the most vulnerable citizens is the right thing to do. Period. Why is this even an issue?”

    Sorry for the rant. But not even Rachel Maddow is asking the question.

    IOW, if the government can’t/won’t help individual citizens in the worst economy since the depression, WTF do we even need you clowns for anyway? Oh, and PS, paying you and your top-of-the-line health coverage isn’t “stimulative” either…so why don’t you go on a “paycheck and premium” holiday yourselves, hmmmmmmm?! Look on the bright side–you won’t have to pay any income tax!

    Still ranting.

  11. i4u2bi says:

    I hope they put in another one/half trillion for business tax cuts…they can then add this to the other three trillion tax cuts that business already got from Bush and that will give them a little change to tide them over or maybe some derivatives here and there. Maybe Madoff can get them into something?

  12. ShotoJamf says:

    Excellent presentation. Doing a side-by-side is a good method to make things really obvious. On my wishlist would be a fourth column that details what would be recommended by some rational economists (like Krugman, for example). Circulating that among the idiots on Capitol Hill might have some effect.


  13. maryo2 says:

    Tax cuts for Energy Projects ▼$2,279,000,000

    Energy projects are a matter of national security. If the US is willing to invest in dying and killing for oil, then we should be more than willing to invest in energy independence.

  14. sunshine says:

    Let’s review part of Michael Moore’s Oct 2008 suggestion about the bailout.

    2. THE RICH MUST PAY FOR THEIR OWN BAILOUT. They may have to live in 5 houses instead of 7. They may have to drive 9 cars instead of 13. The chef for their mini-terriers may have to be reassigned. But there is no way in hell, after forcing family incomes to go down more than $2,000 dollars during the Bush years, that working people and the middle class are going to fork over one dime to underwrite the next yacht purchase.…..2008-10-01

    If they truly need the $700 billion they say they need, well, here is an easy way they can raise it:

    a) Every couple who makes over a million dollars a year and every single taxpayer who makes over $500,000 a year will pay a 10% surcharge tax for five years. (It’s the Senator Sanders plan. He’s like Colonel Sanders, only he’s out to fry the right chickens.) That means the rich will still be paying less income tax than when Carter was president. This will raise a total of $300 billion.

    b) Like nearly every other democracy, charge a 0.25% tax on every stock transaction. This will raise more than $200 billion in a year.

    c) Because every stockholder is a patriotic American, stockholders will forgo receiving a dividend check for one quarter and instead this money will go the treasury to help pay for the bailout.

    d) 25% of major U.S. corporations currently pay NO federal income tax. Federal corporate tax revenues currently amount to 1.7% of the GDP compared to 5% in the 1950s. If we raise the corporate income tax back to the level of the 1950s, that gives us an extra $500 billion.

    All of this combined should be enough to end the calamity. The rich will get to keep their mansions and their servants, and our United States government (”COUNTRY FIRST!”) will have a little leftover to repair some roads, bridges and schools.

  15. JohnLloydScharf says:

    The poor do not pay taxes, so help me understand how this money is taken from them.

    The wealth of this nation comes from its means of production. If that means of production decreases, there are fewer jobs and less wealth created. The government and the poor of this nation are consumers of that production – not producers.

    Unlike some, I do believe that maintaining the infrastructor by the govenment is a plus in such areas as creating and maintaining roads, bridges, dams, et cetera.

    There comes a point at which the cost of government is more than we can afford. When the government responds to recession with more spending or less taxes, it results in printing more money. If more money is printed, it becomes worth less. We call that inflation.

    For those that are employed, they can somewhat keep up with the inflation in the cost of living. For those on a fixed income, that is not so. They see their buying power decrease daily.

    Some of the fixed income issues are resolved by entitlement programs, but that results in more printing of money. The end result is the spiriling inflation rather than a leveling off.

    This is particularly so when entitlements become such a high percentage of government spending. The increase in entitlements can account for every one of the yearly deficits since 2001, when Speaker of the House Dennis Hastart took office. The safety net became a hammock.

    The cost of government has steadily climbed since 2001 as well. That can be calculated in a relative way by dividing the U.S. budget by the U.S. Gross Domestic Produce. That was less than 18.5% before 2001 and was beyond 21% with the 2007 budget.

    During the campaign, President Obama said he would keep it down to the levels of President Reagan, which was, by his statement, 18.5%.

    The best figure that President Obama claims of the Stimulus Plan is that it will create four million jobs. Regardless of how the final bill he signs is tuned to, it is going to be over $800 billion. If the Stimulus Plan is about jobs, then each of those jobs is going to be created at a cost of $200,000.

    As I wrote at first, I believe the infrastructure is a valuable investment for the government. This is particularly so in areas where private industry cannot create those things that are needed by the public, like roads, bridges, and dams. A little thought would add such alternatives as solar/wind generation and information technology (satellites/internet) as well. From looking at the budget, that is a very small percentage of the budget.

    Most expenditures in the Stimulus Plan that are on my “dream list” of projects that have nothing to do with either creating jobs or building up the infrastructure. Unfortunately, they are not expenditures that are likely to stimulate the economy.

    • kspena says:

      JLS-You’ve got a lot of learning to do. Your head is full of right wing talking points, but I don’t consider that ‘knowledge’.

  16. Hugh says:

    There’s just this one small problem with your analysis. It does not correspond to reality. The Fed has been printing money to the tune of several trillion in the last 5 months and what we are seeing is not the inflation you predict but ongoing deflation.

    To stave off, a depression spending is necessary to reverse demand contraction and soak up excess supply. Contracting demand going into a depression, i.e. a recession with a deflationary spiral exacerbates the problem by contracting demand further.

    Your statements about entitlements are curious. The Social Security surplus was used to decrease the size of the federal deficit over the Bush years by about $150-$200 billion a year. You might just as easily point to the defense budget and say if defense were done away with or greatly reduced we would (at least until this year) wipe out the deficits.

    Tell me do you prefer guns and hyper expensive and not very useful gizmos to the health and well being of the nation’s elderly?

    I could go on but I will stop here.

  17. AZ Matt says:

    The Poor might not pay income taxes but they do pay social security and use taxes such as sales. Many immigrants who are here unofficially pay the same.

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