As Bad Economic News Continues, Senate Dems Decide It's Time For More Spending & Higher Taxes

BankruptingAmerica.org

Congress is not session today.  Both the House and the Senate will reconvene on Monday.  On Tuesday, the Senate will take up two district judge nominations for New Jersey and is scheduled to vote on cloture on an amendment from Sen. Tom Coburn (R-OK) that would repeal an ethanol tax credit.

Yesterday, 46 Democrat Senators voted down the Snowe-Coburn FREEDOM Act amendment to S. 782. The Snowe-Coburn amendment was designed to remove regulatory burdens on small businesses, but it fell short of the 60 votes needed for adoption.

Last night, the long string of gloomy economic stories continued as the AP reported, “Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago. The latest bleak snapshot of the housing market came as mortgage rates hit a new a low for the year, falling below 4.5 percent for a 30-year fixed loan. But even alluring rates have failed to deliver any lift to the depressed housing industry.”

>The poor housing news followed reports earlier this week of high jobless claims again. Bloomberg News wrote, “U.S. initial jobless claims unexpectedly rose last week, a sign that the labor market is struggling to gain traction. Jobless claims increased by 1,000 to 427,000 in the week ended June 4, Labor Department figures showed today in Washington. . . . Some employers are cutting staff as demand slows because of elevated energy prices, falling house prices and tight credit. The economy generated the fewest jobs in May in eight months and the unemployment rate rose, a report showed last week. ‘The labor market is obviously struggling,’ Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said before the report. . . . It was the ninth consecutive week that claims were above 400,000.”

So far Democrats in Washington have done nothing to improve the country’s economic situation. In fact, as Senate Republican Leader Mitch McConnell pointed out Monday, “For two and a half years, Democrats in Washington have paid lip service to the idea of job creation while pursuing an agenda that is radically opposed to it. And the results speak for themselves.”

And today, The Hill reports that some Senate Democrats still haven’t gotten the message, saying they need to focus on jobs while calling for policies that hinder job creation: “Senior Senate Democrats are growing frustrated by what they see as President Obama’s passivity on the economy, and are beginning to discuss a large infrastructure package funded by tax increases. . . . Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Commerce Committee, endorsed [Democrat HELP Committee Chairman Tom] Harkin’s argument for more infrastructure spending, and said it is gaining support in the broader caucus. ‘There’s very broad support,’ Rockefeller said. ‘There’s no other way to get at this problem.’ Rockefeller said a spending package was discussed at several meetings Wednesday and that there’s a recognition Democrats need to be tougher in negotiations with Republicans.”

In other words, Democrats are looking to spend even more taxpayer money on dubious stimulus projects while raising taxes, which is one of the worst things you could do to a struggling economy.

Interestingly, The Hill notes, “Jared Bernstein, former chief economist to Vice President Biden, said Democrats should not shy away from spending money to energize the economy. ‘There are some things you can do without spending money, but that’s obviously a very tough constraint and not one that politicians should accept,’ he said.” Recall that Bernstein is one of the original authors of the nearly $1 trillion stimulus bill Democrats passed in February 2009 when unemployment was 8.2%. Bernstein, along with former Obama White House economist Christina Romer, actually wrote that the “unemployment rate with … the recovery plan,” would not exceed eight percent. Today, unemployment is 9.1%, and the stimulus hasn’t lived up to the promises made by its backers, while millions of Americans have lost their jobs.

As Leader McConnell said, “Democrats have ignored every warning. Americans look at all this and ask themselves a simple question: when will these guys get serious?”

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