Today the Congressional Budget Office release another report report (PDF) as required by the American Recovery and Reinvestment Act, commonly known as the Stimulus, to score the effectiveness of the Act. The highlights of this report include the following:
The American Recovery and Reinvestment Act Stimulus' Scorecard for 3rd Quarter of 2011:
Raised real (inflation-adjusted) gross domestic product (GDP) by between 0.3 percent and 1.9 percent,
Lowered the unemployment rate by between 0.2 percentage points and 1.3 percentage points,
Increased the number of people employed by between 0.4 million and 2.4 million, and
Increased the number of full-time-equivalent jobs by 0.5 million to 3.3 million. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.)
Of course, despite the data that old-fashioned, formerly bi-partisan stimulus packages work in times of recession to soften the economic blow and speed up the recovery, we can expect more denial of the Stimulus' effectiveness from the far right.
If the Republican Party's message during the midterm elections could be distilled into one word it that it has been campaigning against it would be: spending. The Republicans have been campaigning against spending without identifying any particular spending they would actually like to reduce. Except there is one particular program that they have been campaigning against: the American Recovery and Reinvestment Act of 2009. Otherwise known as the stimulus.
In February of 2009 Congress passed the Recovery Act and President Obama signed it, with the intent to prevent the Great Recession from turning into the Great Depression 2.0. While Republicans have criticized the Recovery Act for being ineffective, the Congressional Budget Office (CBO) released a report that stated that the stimulus raised the gross domestic product (GDP) by between 1.7% and 4.5%, lowered the unemployment rate by between 0.7% and 1.8%, and increased the number of people employed by between 1.4 million and 3.3 million. Not exactly as ineffective as the Republicans claim. However, over the last year and a half the Republicans have consistently criticized the stimulus as ineffective, and the economy's achingly slow recovery coupled with persistently high unemployment has contributed to the public's overall negative view of the stimulus.
But, while the Republicans openly opposed the Recovery Act in Congress and criticized it in public, many of them worked behind the scenes to secure funds from the stimulus for their own districts. The Center for Public Integrity reported this week about a expansive letter writing campaign, where Congressional Republicans who voted against the stimulus sent letters to federal agencies requesting stimulus funds for projects in their districts. The Texas Observer reports that of the 22 Congressional Republicans from Texas, at least 16 officially requested stimulus funds from federal agencies.
This week from the think tanks, the narrative was that of an economy under stress, and attempting to recover from the greatest economic downturn since the Great Depression. The report this month from the Bureau of Labor Statistics shows that while employment remained steady at 9.5% the private sector added only 71,000 jobs. While the employment rate is holding steady, the labor market is shrinking as more and more workers drop out of the labor force because they have been unable to find employment. What we can see from the latest reports is that while the government stimulus prevented the economy from falling into a second Great Depression, and according to a report from two leading economists without the stimulus the GDP in 2010 would be about 11.5% lower, and payroll employment would be less by some 8½ million jobs. However, despite this it is clear that the economy needs more economic stimulus and jobs programs to prevent the Great Recession to turn into the Great Depression.
"The primary reason the unemployment rate did not rise in July is that the labor force officially shrank by 181,000 workers. Those that dropped out of labor force were prime-age workers, while the number of young workers and older workers increased. The teen (age 16-19) labor force increased by 70,000, the young adult (age 20-24) labor force increased by 17,000, the prime-age (age 25-54) labor force decreased by 325,000, and older workers (age 55+) increased by 46,000. If the 181,000 workers that made up the decline had instead remained in the labor force and were counted among the unemployed, the unemployment rate in July would have been 9.6%. This points to another ongoing issue in the labor market, the backlog of "missing workers," that is, workers who dropped out of (or never entered) the labor force during the downturn. In the last three months, the labor force has declined by 1.2 million workers, reversing much of the 1.7 million increase in the labor force in the first four months of the year. This clearly shows how the forward momentum from earlier this year has largely evaporated."
Key Point: Rick Perry is putting a very narrow and extreme partisan Republican primary agenda ahead of the best interests of 4.8 million Texas schoolchildren.
The facts of this story:
Texas was eligible for up to $700 million in federal education dollars, if we submitted a "Race to the Top" application
The Texas Education Agency spent between 700-800 hours preparing the application
Perry has refused to send the application, as officials have said the $700 million would be "too little money" -- despite the fact that over 200 local school districts have had to raise taxes in order to pay for the structural deficit created by Perry and Dewhurst in 2006
Refusing to send the application nullifies Texas' ability to compete for other grants
Today, Rick Perry will announce that he will not approve the Texas Education Agency's request to seek up to $700 million in federal education dollars. The Statesman's Kate Alexander originally reported last night:
Many states have been going to great lengths to improve their chance at winning some of the grant money. Not Texas.
Both Perry and Education Commissioner Robert Scott have harshly criticized the program’s rules, and Scott suggested that one provision was a harbinger of a federal takeover of public schools.
Scott, reached Tuesday evening, rebuffed a question about the grant application and quickly ended the call. A Perry spokeswoman did not respond to an e-mail request for comment on the decision Tuesday.
The governor’s justification for not competing is that too little money is on the table to implement significant reform in a state with 4.7 million students, the officials said.
$700 million is too little money? Due to the failed leadership of Rick Perry, David Dewhurst, and Texas Republicans in the Legislature, Texas is facing a $14 billion hole next session. Our sales tax receipts are down by over $1 billion, too -- and the DMN tells us why::
A 2006 tax package isn't providing enough money to fund the state's contribution to local school property tax cuts, creating a "structural deficit" that has officials nervous.
Before Perry announced his rejection of the funds, State Representative Garnet Coleman -- who serves as the vice chair of the Select Committee on Federal Legislation, and serves on the Select Committee on Federal Economic Stabilization Funding -- urged the Governor to accept the funds yesterday in a letter he wrote before Perry annoucned his decision (download a PDF of the letter here):
"While I disagree with some of the policy stances, they are but two of the many ways to receive points in the scoring matrix. I believe you may take issue with some of the policy provisions that can receive points. However, it is important to note that they are not all needed to receive possible grant funds. Submitting the application for Race to the Top Funds will allow our state to compete with other states for grants. Race to the Top is not like unemployment insurance stimulus funds, which you turned down because of possible "strings attached". This is a competitive program where states that do better will receive larger allocations.
The competition part is key -- there are no "strings attached" to this application process, as Coleman said. Last week the Houston Chronicle reported that the Texas Education Agency spent between 700 and 800 hours preparing an application that took Perry less than a day to reject..
Representative Coleman released the following statement, upon learning of Perry's decision to reject sending the application for political purposes:
"It's shocking that Governor Perry doesn't even want to let Texas compete with other states for Race to the Top funds. His argument against applying boils down to the fact that he doesn't like the teacher that will grade his test. This is an application that even awards points for his own pet policies - teacher incentive pay and charter school expansion. He used $10 million in federal funds to create his own teacher incentive pay program in 2005, but he's willing to go back on his own principles in an effort to score political points.
Maybe Governor Perry should take his own advice and not bother competing for reelection. At least then Texas schoolchildren would have a fighting chance at a decent education."
Today, State Representative Jim Dunnam, who is Chair of the House Select Committee on Federal Economic Stabilization Funding, penned a Statesman in the op-ed knocking Dewhurst and Perry for their blatant hypocrisy. From his op-ed, titled, "Texas a fiscal wonderland? Now that's pure fantasy"
The problem with much of the current Republican Party leadership is not that they disagree with Democrats. The real problem is that they disagree with reality.
By shamelessly pretending that in is out and up is down, they have spun themselves into Wonderland.
Whether you like the stimulus or not, this misinformation is getting out of hand.
You should really read the entire op-ed -- Chairman Dunnam does a great job detailing all of Perry's hypocrisy.
Texas Lieutenant Governor David Dewhurst wrote an op-ed in today's Austin American-Statesman where he attempts to spin a lie that Texas didn't need stimulus dollars to balance the budget.
Given recent comments about our state's budget, I feel it is time to separate fact from political fiction. The fact is, in stark contrast to the U. S. Congress, the Texas Constitution requires the Legislature to balance the state budget every two years, and that would have happened with or without any federal stimulus dollars.
In 2007, I led the effort to save $7 billion to balance the revenue shortfall we anticipated this year.
So it's simply political fiction that stimulus dollars were necessary to balance our budget.
OK then Dewhurst -- how would you have balanced the budget without using the $14 billion in federal stimulus dollars?
To balance the budget, he's either got to cut spending or raid the Rainy Day Fund -- but the Rainy Day Fund wouldn't have filled a $14 billion budget hole. So what would Dewhurst have cut?
Kicked more kids off of CHIP?
Further gutted public education spending?
Dewhurst has no answer to this at all.
Meanwhile -- while Dewhurst is out spinning lies to cover his and every other Texas Republican's political hide when Rick Perry is rallying against Washington at the same time he's accepting $14 billion to fill a budget hole that he created -- his Senate Finance Chair, Steve Ogden, is actually telling the truth.
"In order to balance the budget this biennium, which is $182 billion, we used $14 billion in federal stimulus money to balance it," said Sen. Steve Ogdenm R-Bryan. "We're not expecting a similar amount of similar money to be available in the next two years because the federal government just doesn't have it. So, assuming that's true, you go into the next session with a $14 billion hole."
According to the State Comptroller's office, Texas requested and was allocated almost $20 billion in federal stimulus funds from the American Recovery and Reinvestment ACt, and has so far been awarded about $13 billion. About $3.6 billion has been received, and nearly all of the received funds have been spent.
If David Dewhurst really wants to claim that Texas didn't need the stimulus funds, then he should produce a budget that shows what he would have cut. But he'll never do that, because this isn't about leadership or fiscal responsibility or being honest about how Texas Republicans play a shall game with Texas' taxpayer dollars.
It's about political power, and political wars -- and Dewhurst, Perry, Strauss, and every other Texas Republican is going to rally against Big Bad Washington while silently singing President Obama and the Democratic Congress' praises that they bailed Texas out of a massive $14 billion budget hole.
Don't believe Dewhurst' spin -- and don't believe it when you hear it repeated for the next year in the press, in local elections, in campaign forums, or on the campaign trail. The Republican-led legislature was only able to balance the budget because of federal stimulus dollars.
Remember -- I didn't say it. The Republican Senate Finance Chair did.
On April 15, a series of protests were held across the country against President Obama's budget measures and economic recovery policies. More specifically, these protests were regionally organized, thematic demonstrations modeled - loosely, at best - on the Boston Tea Party predating the American Revolution.
In 1773, colonials in Massachusetts were angered by the British Parliament's Tea Act. Among other things, they viewed it as an affront to their constitutional right to only be taxed by their elected representatives. They protested the Tea Act by taking three shiploads of tea that Boston's Royal Governor Thomas Hutchison refused to return to Britain and dumping them into Boston Harbor.
The various tea-themed activities during the protests of this past April were largely symbolic, a misread historical metaphor used as a shared rallying point. Most of the actual protesting was done via speech and sign and other normal demonstration fare rather than through the destruction of actual tea.
This year's Tea Party-Goers had two advantages that the colonists lacked in organizing their protests: online organizing and Fox News. How much each contributed to attendance at the day's events is a matter for debate.
Texas Dmoecratic Party Chair Boyd Richie authored a solid op-ed in yesterday's Austin American-Statesman (Sat., Aug. 1st) titled "Texans Lose Helping Hand Because of GOP Finder-pointing".
Richie makes a lot of interesting points in the letter. Some include:
Here's the Republican primary politics price tag on just this one issue. The state will have to borrow - with interest - as much as $2B to cover the shortfall in our unemployment fund. Texas employers will pay a "Republican Primary Tax Hike" because our tax dollars went to other states.
The unemployment fund fiasco should send an ominous warning to voters about what happens when politicians stay in office so long that they put their political careers ahead of what's right for Texas.
Today, we are paying the prices for a Republican primary between two politicians who have shown neither the character nor the leadership that made Texas great.
My Take:
Realize, what Rick Perry did, as horrible as it is for Texans, was politically brilliant. This is candy for his 400,000+ Republican primary votes he'll need to secure his win over Hutchison.
Perry was down by as much as 25% before this, and up at least 10% after.
Smart move for Perry, horrible for Texans. This is the reason Perry will win the Repub Primary in March 10'. He will do anything to win.
Can you blame Gov. Perry for wanting to win and doing whatever it takes to win? A lot of folks in that position might have done the same thing. He's simply pandering to his conservative primary base.
What would you do if you were in his shoes, knowing this act would likely help you win the Governor's seat?
While Senators John Cornyn and Kay Bailey Hutchison, complain about the Obama administration and Democratic controlled Congress spending on the stimulus, the budget and potentially on health care reform their votes in favor of building seven more F-22 fighters for $1.75 billion are hypocritical in the extreme. Republicans including Secretary of Defense Robert Gates, Senators John McCain and John Kyl among others agreed that the F-22 was unnecessary and an inappropriate expenditure. Fortunately the vote to kill the F-22 was truly bi-partisan with 42 Democrats, 15 Republicans and 1 independent; unlike some other legislation lately which had only token Republican support.
Our senators claim to make their votes based on what's good for Texas and the country but how is building a cold war era fighter that can't be flown near an aircraft carrier and hasn't been used in combat over Baghdad because its super-sensitive electronics can't deal with the mass of radio signals good for the country?
I've heard some Republicans say they voted for the F-22 to save jobs; but their party generally claims, quite loudly, that government spending doesn't create jobs, so which is it? There are plenty of worthwhile projects that $1,750,000,000 could fund including bridge repairs, building schools, green energy and energy efficiency projects that would pay dividends for all of us for years to come.
Fox Business News really likes Republicans. We can tell why. Only as pompous a network as Fox would fall in love with politicians so immodest that they would take compliments that are anti-factual.
When Gov. Rick Perry went on the Fox Business Channel last week, he got these hardball questions and comments from the interviewers:
"You've said no to stimulus money, you've said no to any money for your state."
AND
"Governor, I'm glad you didn't take any stimulus money since you did balance your budget, you don't need it, save it for states that are having people that are losing their jobs and losing their homes.
Rick Perry took the compliments in stride. Of course, they were describing his governorship of Texas accurately, right? And even if it wasn't, compliments on Fox can't hurt with GOP primary voters. But it turns out those Fox people got something wrong, and Governor Perry couldn't have cared less.
It's not really Perry's job to correct erroneous questioners, and he didn't. But it is my job. So I will remind you, and them, that the Legislature would have had to dip into the Rainy Day Fund or make sizable cuts in state services were it not for $12 billion in stimulus dollars that went into the budget that lawmakers just finished. That money included $2.5 billion for Medicaid and $3.2 billion for public education.
While it is not the governor's job to correct reporters, I would hope my state's leaders can represent Texas genuinely. True, I want Texas' leaders to boast about how we have done in the economy, bringing green jobs to the state as we weather the economic storm.
But to imply that Texas did not accept or need stimulus money is just wrong. I love Texas, but we aren't that much better than the rest of the country no matter which way you look at it.
A video of Perry's ridiculous visit to Fox is below the fold. (Look, the Fox people are at a bar! No wonder they aren't reporting accurate news!)
