published Thursday, January 22nd, 2009

Area Republicans criticize stimulus as too expensive, while Democrats say aid is needed

by Brian Lazenby

by Herman Wang
Audio clip

Phil Bredesen

WASHINGTON — As the U.S. House takes up a $825 billion stimulus plan, locals say they’re itching for the $500 to $1,000 tax cut promised by President Barack Obama.

“My power bill was double this month,” said Remica Tillery, 26, of Alton Park. “Who couldn’t used $500? I’d use it for those bills.”

Rick Lewis, 50, of Chickamauga, Ga., agreed.

“Heck, I’d take it,” he said. “I’d pay some of these bills and just try to stay ahead.”

The stimulus plan, drafted by Democratic leaders, includes more spending and fewer tax cuts than a package proposed by Mr. Obama, but Republicans still are criticizing the measure as runaway spending and a gross expansion of government programs.

“Just because Republicans spent too much money and lost our way on holding the growth of government down doesn’t mean that the agenda the Democratic leadership is carrying out is the right approach,” said Rep. Zach Wamp, R-Tenn.

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Republicans are in favor of portions of the bill, including the $275 billion in tax cuts, along with business incentives, he said. But the package also includes elements Rep. Wamp called “social spending” and “transfer payments,” such as increases in unemployment benefits.

Democratic leaders said the package is needed to give the lagging economy a shot in the arm. In addition to the tax cuts, the bill includes about $92 billion in spending for roads, bridges, mass transit projects and other infrastructure; $141 billion for education grants and state aid; $58 billion for renewable energy incentives and conservation programs; and $153 billion for health care programs.

It also would give individual taxpayers a $500 cut, at a total cost of $140 billion. That’s not chump change to the average person who is struggling with debt, said Dan Stevens, education specialist for Consumer Credit Counseling, a division of Chattanooga’s Partnership for Families, Children and Adults.

“People did use the money (from the previous stimulus) to get current on their credit cards or other bills,” Mr. Stevens said.

Rep. Lincoln Davis, D-Tenn., while a member of the fiscally conservative Blue Dog Coalition, said the stimulus bill will address the country’s growing infrastructure deficit.

“As I travel throughout the district and Tennessee, I see many communities struggling without even the most basic of needs like clean and safe drinking water,” said Rep. Davis, who, like Rep. Wamp, is a member of the Appropriations Committee.

The House tentatively is scheduled to vote on the package by the end of the month, with the Senate to follow shortly after.

While many regular folks in the Chattanooga area say the money is welcomed, not everyone is taking the more-the-merrier outlook.

“If he wants to just give us $1,000, that’s great,” said Shelley McGraw, 31, of East Brainerd, who stands to get $1,000 because she’s married. “But if it means that next year we have to pay it back with higher taxes, I’m not so sure I want it.”

Republican senators from Tennessee and Georgia have given the House Democratic package low reviews so far.

Sen. Saxby Chambliss, R-Ga., said the last round of rebate checks included in last year’s stimulus package did not provide the hoped-for boost to the economy.

Sen. Bob Corker, R-Tenn., on the Senate floor Wednesday, said the package is a Band-Aid on the country’s economic woes and ignores the root of the problem: the credit crisis.

“There may be some need for capital investment and infrastructure, but if we do not deal with the real issue, that much of our banking system is insolvent, ... everything we do to deal with our economy will be for naught,” he said.

Meanwhile, governors from Tennessee and Georgia said they have drafted their budgets without including any potential federal aid from the stimulus package.

Tennessee Gov. Phil Bredesen said the state has identified about $800 million in infrastructure projects ready to go if and when the federal funds are provided.

The situation in Georgia is similar.

“We all recognize that until something’s passed and we know for certain what we’re getting that you can’t make plans based on that,” said Bert Brantley, spokesman for Georgia Gov. Sonny Perdue.

Chattanooga-area bankers and business leaders were mixed on whether the stimulus would achieve its desired effect.

Wes Smith, chairman and chief executive of Northwest Georgia Bank, said the package will not do much for the economy in the short term.

“We need a quick boost now, maybe even a hard shove, and though spending to develop infrastructure is a great idea to get the economy moving again, it will be too slow, too late,” he said.

But Steve Anderson, corporate secretary and director of investor relations for Astec, a road building equipment manufacturer, said the infrastructure improvements would create new jobs.

“According to American Road and Transportation Builders Association, for every $1 billion spent on road construction, it creates 34,000 jobs,” he said.

Keith Sanford, executive vice president at First Tennessee Bank, which received more than $866 million during the first round of low-interest government loans to financial institutions, said the loans plus the infrastructure improvements should be enough to boost the economy.

“I don’t think the (bank loans) by itself will stimulate the economy back to where it was,” he said. “But this combined with other things, I think it can.”

On the proposed health care funding, Dr. Vince Viscomi, local pulmonologist and president of the Chattanooga and Hamilton County Medical Society, said federal help would be very welcome.

Health information technology, such as electronic medical records, can help avert medical errors and eliminate duplication of treatments for patients, he said. But setting up an electronic system and transferring old, hard-copy records into the new system is extremely expensive and time-consuming, he said.

Staff writers Adam Crisp and Emily Bregel contributed to this story.

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