Hearing of the Senate Finance Committee - On The American Recovery And Reinvestment Act Of 2009

Hearing of the Senate Finance Committee - On The American Recovery And Reinvestment Act Of 2009

Sen. Cornyn's Opening Statement from the Senate Finance Committee Markup of The American Recovery and Reinvestment Act

Thank you Mr. Chairman. I think the most important question that any of us can ask about this bill is will it work? Will it work? Even the best of intentions we've seen don't necessarily produce good results. And I think we need to be very careful that this massive bill which will add huge numbers of money to the federal deficit, the bills passed on to our children and grandchildren. Will it work? Or will we just be a result in good intentions producing bad results. To me that's the most important question we can ask.

I'm reminded of from my previous life where I was a great fan of Justice Oliver Wendell Holmes. A quotation he once wrote, he said, "Certitude is not the test of certainty. He said we have been cocksure of many things that were not so." And what I hear is a lot of certitude but an amazing lack of real certainty about whether this bill is likely to work. And I have questions, serious questions and doubts about whether it will.

I believe that any stimulus proposal must grow the economy and help create jobs. I will reiterate what others have said on this panel that the stimulus package that we passed last year. Or I guess the first part of last year of January, did little to help the economy but in the process added about $150 billion to the deficit, again to our children and grandchildren. At a time when we are looking at trillion dollar deficits, 1.2 trillion at last count and that's before this stimulus package passes, we're looking at runaway entitlement spending, and of course soaring health care costs, we need to avoid repeating mistakes. That to me should be the simplest thing we should learn. We could put all the economists on the planet in the end and perhaps never reach a conclusion, but what we can judge from is from our experience. And our experience tells us that some of the "so called tax previsions of this bill" will barely be a repetition of earlier mistakes and will not solve the problem.

It's my hope that stimulus legislation will include broad-based tax relief. And of course I am a firm believer that the American people know how to spend their money better and more efficiently than sending their checks to Washington, having it filtered through the bureaucracy and then returning a portion of it back to them in the form of a stimulus package. Indeed I think that's part of the difference between the prospective on either side of the aisle here is will these jobs be created by more government spending? Where government picks the winners and losers? Or will it be by the private sector, by people getting to keep more of what they earn?

It goes without saying, but I will say it anyways, that our greatest natural resource is our people—our workers, our small business owners that create the vast majority of jobs. Americans remain the most innovative and productive workers in the world. And it is imperative that we provide incentives to those people who are willing to take risks and create jobs.

Therefore, I do have concerns about the mark. The new refundable tax credit, I think Senator Kyle and a number of others have spoken of this, the so-called "Making America Work" credit is in effect a repetition of the failed stimulus that we passed a year ago, given another form. This makes up more than half of the mark's total. Refundable tax credits are providing cash from the federal tax payer to people who don't pay taxes. So it's a massive redistribution of wealth as well. I would just ask in a genuine bipartisan attempt to try to do our jobs and to try to figure out what will work as opposed to what has been tried and what has not worked. We would just consider, for example, some of the writings of president Obama's new chairwoman of the council of economic advisors who's written that "…a tax cut of 1% of GDP increases real output by approximately 3% over the next three years." I just think it's not only intuitive but apparently some of the most preemptive experts in the world are of the opinion based on their studies that tax relief will actually produce more economic stimulus than government spending, particularly of the kind that we've tried before which has not worked.

So, I will offer amendments that I believe will help American manufacturers, small investors, small business men and women, and individual taxpayers.

I would like to close by thanking the professional staff on a bipartisan basis of the finance committee and the joint tax committee for the outstanding work they've done in helping us get prepared for this very important piece of legislation and I look forward to working with the committee on a successful outcome.

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