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.”