Pork & Pet Projects

During his first press conference as president this week, Barack Obama seemed irked that most congressional Republicans remained opposed to the so-called stimulus legislation.
Obama attributed it to philosophical differences, saying: "Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis."

Not really. It's possible to want the government to take quick steps to turn around what has become an unusually sharp and severe recession -- while believing that the current proposal is not the best way to do it.

As you might expect, a bill that was supposed to come in at a comparatively svelte $300 billion has ballooned to an impressive girth, thanks to Democrats stuffing it with pet projects of dubious virtue. Now this porker has swollen to 800 pages.

Shipyards get $100 million in handouts; $400 million is diverted to "farm ownership loans." Another $200 million goes to computer centers at community colleges, and $650 million for "additional coupons and related activities" for the digital-to-analog converter box program. NASA and the National Science Foundation receive $2.3 billion.

Federal police live high on the hog. There's $100 million for the FBI and other agencies to build a "nationwide integrated wireless network," $90 million for Mexico border policing, and $100 million for the part of the Justice Department that describes itself as fostering "operational synergies within the detention and incarceration community." (Wouldn't a conference call be cheaper?)

There is no logic to this. There is no sense to this. There is no reason why trendy projects like wind power are favored -- and promising ones like biotechnology and nanotechnology ignored -- except the usual Washington excuse of influence-pedding and closed-door politicking.

There's also no reason to believe that the lawyers-turned-politicians who make up the U.S. Congress will be especially adept at deciding which industries are most deserving of "stimulus" funds.

Tax cuts are more promising, in part because they bypass the industrial policymakers of the nation's capital. A month ago, the New York Times reported that the Democratic proposal "will devote about 40 percent of the cost to tax cuts."

But now the tax cuts have shrunk to only 22 percent of the House-approved bill, according to a handy chart created by the Washington Post. So much for that good idea.

One section of the "stimulus" bill that has received surprisingly little scrutiny might seem to be the most innocuous: electronic medical records. But a closer look shows that it invites a host of privacy problems.

This section of the bill, about 140 pages, would radically reshape the nation's medical system by having the federal government establish computerized medical records that would follow each American from birth to death. A new health care bureaucracy will be handed the "goal of utilization of an electronic health record for each person in the United States by 2014."

The databases will, "at a minimum," include information on every American's race and ethnicity. They will be used for "biosurveillance and public health" and "medical and clinical research" and become a "nationwide system for the electronic use and exchange of health information." Doctors that don't comply will see reimbursements whittled away. Although a single paragraph promises that data-sharing will "be voluntary," there's no obvious way to opt out.

"Without those protections, Americans' electronic health records could be shared --without their consent -- with over 600,000 covered entities," said Sue Blevins, president of the Institute for Health Freedom, a nonprofit group that advocates health care privacy.

It's true that for some projects, $1 of tax money spent by the government can yield more than $1 of economic growth. The interstate highways are a good example of this multiplier effect.

So it doesn't make sense to oppose all government spending; it makes sense to oppose wasteful government spending. In this case, the "stimulus" may lower unemployment briefly, but even the Democrat-controlled Congressional Budget Office concludes that it will yield "a slight decrease in gross domestic product" afterwards.

So what should be done? Congress could lower the corporate income tax to convince international businesses to keep profits (and jobs) in the United States; announce an end to bailouts for companies and their executives that took too much risk; and fix the regulatory and legal infrastructure that gave us the housing bubble in the first place. Or how about an immediate and permanent reduction in the payroll tax, perhaps with a gradual increase in gasoline taxes?

At the very least, Congress should hold individual votes on major components of a stimulus proposal, rather than tying them together in a $800 billion bundle that can't be amended.

Here's one more suggestion: As I pointed out in an earlier column, the IRS collects $1.37 trillion in individual income taxes a year. By the time this "stimulus" bill is larded up in a , it could weigh in at close to that number.

Which would you rather have: The opportunity to pay no federal income taxes for almost a year, or this bouillabaisse of congressional pet projects approved without a single hearing?