Tyler Morning Telegraph - Business Leaders, Cornyn Discuss Stimulus Package

Press Release

Tyler Morning Telegraph - Business Leaders, Cornyn Discuss Stimulus Package

By: Brian Pearson

The recently approved $787 billion federal stimulus package was tarred, feathered and run out of town on a rail Wednesday at an economic roundtable discussion between East Texas business leaders and U.S. Sen. John Cornyn.

Cornyn, R-Texas, said the 1,071-page legislation -- handed to him about 11 p.m. the night before the vote -- won't cure the nation's long-term economic woes, much less help a relatively economically sound state such as Texas. He added that the package lacked the kind of transparency that President Obama said he would bring to his administration.

Local bankers at the event at the Rose Garden Center in Tyler worried that their healthy community-based institutions would get dragged down. Small-business owners wondered what the stimulus package would do for them. Builders expressed concern that frozen credit markets would thaw their business.

"You can't watch the television or read the newspaper and not be scared to death," Cornyn, who voted against the stimulus package, said of publicity over the economic crisis.

He added that the stimulus package "represents a pretty mass redistribution of wealth."

"I felt like it was a huge gamble," he said. "We shouldn't be spending money we don't have on things."

He also called the package "old-fashioned pork-barrel spending."

The federal government's priority should be fixing the housing crisis, he said. Cornyn has advocated allowing 3 million Texas homeowners to refinance their mortgages at between 4 percent and 4.5 percent, saving them an average of $300 per month. He also has expressed support for a $15,000 tax credit for homebuyers.

Gregg County Judge Bill Stoudt called the legislation "a travesty."

"If there is a second round, I hope the public is involved," he said.

Cory Miller of the Gilmer-based C. Miller Drilling, expressed concern about how the economy will affect East Texas manufacturing and the oil industry in the long run.

"Right now we're continuing to enjoy a pretty good business statewide," Miller said. "The East Texas economy is obviously affected. I'm greatly concerned what Congress has done, what the president has done."

Don Thedford of Don's TV & Appliance in Tyler said small businesses such as his could fall victim to the housing crunch, with people less inclined to spend money on his products.

"We truly do have a little bubble going on although we're experiencing that trickle down," Thedford said of the area's relative immunity to the economic woes felt nationally.

Cornyn responded by noting the importance of flowing credit, for businesses large and small. He pointed to the auto industry bailout as a federal misplaced priority.

"As I travel the state, people are asking, 'Where's my bailout?'" Cornyn said.

In response, Thedford, referring to the federal government, said, "We need to look at the wasteful spending and what they're spending on."

Also representing small business, Tyler Morning Telegraph Publisher Nelson Clyde IV, accompanied by his 14-year-old daughter, Rachel, posed the question of why government can't tighten its belt the same way businesses are doing during the recession.

"It's rare to see the kind of cuts in government as you see in the private sector," Clyde said.

Sam Dawson, Southside Bank president, noted that unlike other banks around the nation, East Texas financial institutions are healthy and lending money.

However, consumer confidence is shaken, as underscored by loan demand for his bank dropping between 10 percent and 15 percent last year, Dawson said.

"What we're seeing is our customers frightened," he said.

Dawson said an extended economic downtown eventually will be reflected locally.

"I think we're probably going to get a little bit of a stomach ache," he said.

Tyler-area builder Steve Thornton noted that the local economy has remained healthy because it is a portrait of slow, steady progress.

"We're not an espresso machine that's here today and gone tomorrow," Thornton said.

In a question-and-answer session following the roundtable discussion, Cornyn said the stimulus package will have short-term benefits, but in the long term it will reduce the gross domestic product because of crowding out private investment in the economy.

"I really don't see this bill accomplishing what it was intended to," he said.

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