This evening, I spoke with Rep. Eric Cantor, the House Minority Whip, about what Republicans really want out of the stimulus package, and about elements of the Republican counter-proposal, which they'll unveil tomorrow. My questions are edited for clarity; his answers are verbatim.
Obama's met with you three times now, but House Democrats don't seem to be listening, or haven't done much to include you guys. What did Obama say when members informed him that they'd had no input?
We didn't have a conversation that was focused on process. Certainly, he listened and he acknowledged the difficulty of working a bill through Congress. We just told him that we appreciate his gesture and take him at his word that he wants to get this bill right and he does welcome our ideas. He said: "continue to bring them." His exact words were: he had no pride of authorship in this bill. We're hoping very much that as this bill works its way through the process, the House will deliver on its bill tomorrow, and the Senate will do likewise, probably next week or so, and hopefully, at some point, he'll be able to begin to influence what it is that comes out. Because right now, the bill, as it stands, simply misses the mark.
If you could wave your magic wand and make two changes to the bill that would make it much more palatable to Republicans. What would they be?
I think first of all you have to focus spending on actual stimulus. You've got CBO saying that only 25 percent goes out in the first year. You've got to have some type of ability to provide that jobs will be created or maintained because of the government spending. Listen, this is all borrowed money. That is an added burden you have to overcome in order to justify the government spending the money, not the private sector. Number 2, you'd have some meaningful tax relief for small business. There's a lot of discussion about the NOL provisions - net operating losses - which are good. That will help save jobs. There's a lot of discussion and support for accelerated depreciation. That's great because that will help spur big business to purchase assets. But that provision itself really kicks in when you purchase [something] over $850,000. What about the real small business person? There is only 41 million dollars allocated toward the relief for small business and small business expensing. That's where we start to look. For every one dollar you allocate for small business tax relief, you're spending four dollars to replace the grass here in Washington.
Is that why your proposal includes a 20% tax deduction for small businesses but not for business in general?
That's correct. As we know, small business, entrepreneurs and the self employed create 70% of the jobs in this country. When people are laid off, as is going on in the country, often times they'll go and start their own business. If that happens, and we know that will be happening, you want to expedite that, you want to help the people to go out and make the decision to put their capital on the line and begin to create jobs. That's where we need help.
Another plank in your proposal is to get rid of the tax on unemployment benefits. But in terms of a direct stimulus, increasing welfare benefits, increase food stamps, would be as much of a multiplier, if not more, than the Republican proposal? If the goal is to get a bill with as much stimulus as possible, how come Republicans aren't talking about increasing other government transfers?
Right now, the reality is you have growing unemployment in the country and what we've got to do is create an environment where you can sustain a certain level of activity. You're right. Unemployment benefit extension, lifting taxes on unemployment benefits is a safety net move. But there is some stimulative effect, although it's not great. It is recognition of reality.
Public opinion is in favor of the stimulus, even as they don't know all the details; in urging members to oppose it, are you essentially betting that it won't work?
Listen. I think there is a significant desire on part of our conference , our members, to contribute to this process, and to make sure that we've got a stimulus bill that gets it right. The public may like the idea of stimulus because is sounds as if that will deliver an economic recovery, but when you begin to look at what the public is really about, they don't want the government going into more debt to borrow the money to spend as a way of our getting out of this recovery. There is a real doubt and a lack of confidence that Washington delivers and that where I think the majority of Republicans are right now. This stimulus package somehow just doesn't get it right. If you look at the tremendous amount of spending in the bill, the bulk of it goes to programs that may be laudable; there's $136 billion for new programs that they believe we need to have. Very little of that is stimulative. At the end of the day, Republicans believe that we have a better plan and that we can do better. And that's why we want to urge this president to impose upon speaker Pelosi. To open her door. Meet with us. We can do better This Congress can do better.
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