Budget bill dies in Senate

House Resolution 1 hit the U.S. Senate floor March 9 and was defeated by a 56-44 margin.

Almost every Republican, including Sen. Dan Coats, R-Ind., and Sen. Richard Lugar, R-Ind., voted in favor of the bill.

The Democratic majority in the Senate, however, shot the bill down.

Mark Zandi, chief economist for Moody’s Analytics, an analysis and modeling company, projected the bill would have cut real GDP growth by 0.5 percent in 2011 and 0.2 percent in 2012.

Because of this, 700,000 jobs would have been lost by 2012, Zandi said. 

“The fact that a relentless cheerleader for the failed ‘stimulus’ — which the Democrats who run Washington claimed would keep unemployment below 8 percent — refuses to understand that ending the spending binge will help the private sector create jobs is sad, but not surprising,” responded Speaker of the House John Boehner’s spokesman Michael Steel in an email.

Zandi replied that immediate cuts would be counterproductive to establishing a stable economy.

He did say, however, that long-term government spending restraint is vital.
As the economy continues to stabilize, 100,000 to 150,000 new jobs have begun to appear each month in the United States, Zandi said.

He went on to say that until that number reaches about 200,000, imposing additional government spending cuts, as House Republicans want, would be taking an unnecessary chance with the recovery.

Had the bill passed, Indiana would have lost 15,000, Zandi said. The spending cuts were proposed to be in health care services, public education, public transportation and law enforcement.

The bill would also have reduced homeland security investments by $1.3 million.
Zandi said this could potentially have hindered local law enforcement.

“Under the Republican spending plan, you’ve got no long-term deficit reduction, no change in corporate welfare and lopsided tax breaks for the wealthiest Americans, massive cuts in disease research, education and transportation, and huge job losses,” said Tom McMahon, executive director for Americans United for Change.

March 9, a Goldman Sachs analysis determined the proposed cuts would have damaged the economic recovery.

The analysis found the house GOP’s plan could cut the nation’s economic growth by 1.5 percent to 2 percent during the second and third quarters of 2011.

Sen. Chuck Schumer, D-New York, called the report evidence that the House GOP’s budget plan was “a recipe for a double-dip recession and a dagger through the heart of their ‘cut-and-grow’ fantasy.”

“Senator Richard Lugar owes his constituents a very good explanation for why he voted today to protect Corporate America’s bottom line over 15,000 jobs back home in Indiana,” McMahon said. “We need a responsible and balanced plan to rein in deficits.”