CAGW Slams Obama’s Plan for More Stimulus Spending

(Washington, D.C.) – The nation’s premier taxpayer watchdog group, Citizens Against Government Waste (CAGW), today slammed President Obama’s proposal to provide an additional $50 billion in federal aid for state and local governments.  The Obama administration claims that the money would be used to avoid layoffs of teachers, police, and firefighters, as well as stimulate local economies. 

“Unfortunately, taxpayers have seen this type of misguided and ineffective spending before and found out the hard way that it doesn’t stimulate the economy,” said CAGW President Tom Schatz.  “The year-and-a-half old $862 billion stimulus bill has been an abysmal failure, so it makes no sense whatsoever to repeat the pattern.  The President promised back then that 90 percent of the jobs created would be in the private sector and that unemployment would drop to 8 percent.  Yet, the only positive job creation has been in the public sector, and private-sector unemployment has hovered at 9.7 percent.  Taxpayers’ wallets have been pilfered to fund a litany of excessively wasteful stimulus spending projects, such as $3.4 million for a turtle crossing in Florida, $1.15 million to replace an old guardrail around an empty lake in Oklahoma, and $21,000 to resurface tennis courts in Livingston, Montana.  The President has touted the stimulus as part of the effort to get the country out of the Great Recession, but all it has done is create the Great Debt.”

According to a report prepared by the National Governors Association and the National Association of State Budget Officers, 46 states face cumulative budget deficits of $127.4 billion for the upcoming fiscal year, which begins on July 1.  State budget shortfalls will not be solved with short-term infusions of borrowed money.  In fact, throwing more borrowed money at the states’ fiscal troubles only delays the inevitable day of reckoning when they will have to address their bloated and extravagant budgets.  Furthermore, President Obama’s announcement to write more checks and IOUs could not be more ill timed since news reports also indicate that the costs of fixing Fannie Mae and Freddie Mac could reach as much as $1 trillion, surpassing the taxpayer bailouts of AIG, GM, and Citigroup Inc. combined. 

“President Obama talks incessantly about wasteful government spending and reining in the budget deficit, yet his policies will end up spending more taxpayer money than any previous President,” continued Schatz.  “Past stimulus bills have been a large down payment on a long-term legacy of fiscal woe.  The deficit was a record $1.4 trillion in fiscal year 2009, and in projected to reach $1.5 trillion in fiscal year 2010, while the national debt is forecasted to reach 140 percent of GDP in two decades.  Rather than addressing the nation’s urgent fiscal needs, Congress has no intention of passing a budget and no plan to reduce the deficit.  Last week, more than 100 economists signed a letter to the President urging him to take ‘immediate action … to rein in federal spending, prevent job-killing tax hikes through the expiration of current tax rates, and reverse the harmful effects of the health care law on small businesses, the engine of job creation in our economy.’  More stimulus spending would have the opposite effect by enlarging the deficit and further damaging the economy.  The President’s proposal should be soundly rejected,” concluded Schatz.  

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government. 

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