A Grim Accounting

Floor Speech

Mr. McCLINTOCK. Mr. Speaker, this week, the House passed H.R. 3548, which extends unemployment benefits in States with high unemployment rates, and it continues and expands the popular tax credit to encourage home buyers into the market.

Mr. Speaker, I know these are very popular programs, but I believe that they are taking us in exactly the wrong direction. By increasing taxes to finance these programs, the government is placing increasing burdens on the economy which I believe are actually making the recession worse.

I am concerned that, by raising taxes, we end up making more people unemployed, and I believe that, by paying people to buy homes, we are creating yet another housing bubble that will continue to drain the resources of our Nation until it bursts. Let me walk through both of those concerns.

Under this bill, unemployed workers in States like my home State of California can draw up to 99 weeks of unemployment benefits--almost 2 full years. Now, I realize the quiet panic that haunts every waking and sleeping moment of unemployed families as they wonder from one day to the next how they're going to get by. I've known that feeling myself.

Yet there is a reason that California suffers one of the highest unemployment rates in the Nation. It has one of the highest tax and regulatory burdens in the Nation. Business and investment and the jobs that they create flee such hostile environments and seek out less expensive and less burdensome places. One needs only to watch the domestic migration within our own Nation from high-tax, high-regulated States to low-tax, low-regulated States to see this happening right now before our very eyes.

According to the Congressional Budget Office, this bill imposes a net tax increase of $2.5 billion on our economy at a time when we can least afford it. It contributes to a self-defeating paradox: higher unemployment in order to help the unemployed. Yet we all know that the only antidote to unemployment is a genuine job.

It's true. Family breadwinners can see the additional unemployment checks in their hands, and they feel the immediate relief. That's why this bill is so popular. What they don't see are the jobs that could have ended their agony but that have now disappeared in order to pay the higher taxes to support those unemployment checks. It is a vicious, downward spiral that the supporters of this bill have already tacitly acknowledged when they admitted that they will have to return before the end of the year to extend the program yet again.

Simply stated, we cannot help the unemployed by creating more of them, yet that's exactly what programs like this are doing. We can see it in the steadily increasing unemployment figures despite record amounts of government spending and borrowing.

The second part of this bill is equally popular, and it is equally delusional. It extends and expands tax credits for home buyers to buy homes that they otherwise could not afford. Have we learned nothing from the past year of economic hardship? We all know that the catalyst for the current recession was a housing bubble that was created by government policies that encouraged lenders to make loans and borrowers to take loans to buy homes that everybody knew they couldn't afford.

What's our response now? We are going right back into that same market and are creating another bubble by, once again, encouraging home buyers to purchase homes that they otherwise couldn't afford. We're doing this just weeks after watching how the Cash for Clunkers program created the same artificial bubble in the automobile market, a bubble that came crashing down as soon as that program ended.

A society in which the government extracts billions of dollars from its economy in order to pay people to buy stuff they can't afford has a rendezvous with a grim accounting, and the longer these programs continue, the grimmer that accounting will be.

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