MSNBC's Mika Brzezinski echoed her disputed claim that funding for "welfare programs" included in the recovery bill, such as "food stamps and helping low income people pay for college," would not stimulate the economy. In fact, economists have said that programs that provide aid to state governments and individuals would, in the words of Congressional Budget Office director Douglas W. Elmendorf, "have a significant impact on GDP."
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During the February 2 edition of MSNBC's Morning Joe, co-host Mika Brzezinski echoed her disputed claim that funding for "welfare programs" included in the economic stimulus bill would not stimulate the economy. Brzezinski said that Republicans have a "fair point here to maybe remove some of the social spending here" because "it doesn't add up to the definition of stimulus." She later added: "[D]oes this plan add up to the definition of stimulus? I don't think it does. And I don't question the value of food stamps and helping low income people pay for college. It just shouldn't be in this bill." When Time magazine's senior political analyst Mark Halperin replied, "Well, of course that will help stimulate the economy," Brzezinski insisted: "No, it won't, not right now." However, economists, including Congressional Budget Office (CBO) director Douglas W. Elmendorf and Mark Zandi, chief economist and co-founder of Moody's Economy.com, disagree with Brzezinski's claim that "social spending" in the form of food stamps does not have a stimulative impact on the economy, stating that such spending would, in Elmendorf's words, "have a significant impact on GDP."
In July 27 written testimony before the House Budget Committee, Elmendorf stated that "[t]ransfers to persons (for example, unemployment insurance and nutrition assistance) would ... have a significant impact on GDP." He added, "Because a large amount of such spending can occur quickly, transfers would have a significant impact on GDP by early 2010. Transfers also include refundable tax credits, which have an impact similar to that of a temporary tax cut." Similarly, in his July 24, 2008, written testimony before the House Committee on Small Business, Zandi stated that "extending food stamps are [sic] the most effective ways to prime the economy's pump." Zandi further explained, "People who receive these benefits are very hard-pressed and will spend any financial aid they receive within a few weeks. These programs are also already operating, and a benefit increase can be quickly delivered to recipients."
Zandi included with his testimony a table stating that a "Temporary Increase in Food Stamps" had the highest "Fiscal Economic Bank for the Buck" of any other potential stimulus provision he analyzed, providing a $1.73 increase in real GDP for every dollar spent:
The Center on Budget and Policy Priorities (CBPP) also stated in a January 21 analysis of the Senate's economic recovery package that "[f]ood stamps are one of the most effective forms of economic stimulus because low-income individuals generally spend their available resources on meeting their daily needs, such as shelter, food, and transportation."
From the February 2 edition of MSNBC's Morning Joe:
MELISSA REHBERGER (MSNBC anchor): Mika, for their part, Republicans are saying they want a lot less spending and a lot more tax cuts before they can get behind this thing.
BRZEZINSKI: Yeah, no, certainly has a process to go through still. Melissa, thanks very much.
And to add to what Senator [Kay Bailey] Hutchison [R-TX] was saying, Mark Halperin, you know, I think there's a fair point here to maybe remove some of the social spending here. It -- I don't take away from the value of it, but it doesn't -- it doesn't add up to the definition of stimulus, many of the things that are in there.
HALPERIN: Well, some of the things are not pure stimulus, but the Democrats have decided to pass a Democratic bill. They're talking about looking for Republican support, but, again, as I said before, there are a lot of Democrats, a lot of liberals who don't care if there are Republicans who support this. They want their bill, and it's Senator -- President Obama who has made it a goal of his to have a bipartisan bill.
BRZEZINSKI: Yeah, well -- but if you're going to come up --
HALPERIN: He's going to have to change it dramatically --
BRZEZINSKI: -- with a Democratic bill --
SCARBOROUGH: But -- but --
HALPERIN: He's going to have to change it dramatically to get that.
BRZEZINSKI: Joe, go ahead.
SCARBOROUGH: Mika. Mika, you know, the thing is, Democrats can pass things that Republicans may not necessarily like that will still stimulate the economy. Spend -- I mean, my God, if Democrats said, you know what we're going do? We're going to spend half of the $1 trillion on creating a smart grid system that's going to transform the environment and energy if we're going to create a new economy with alternative fuel sources, and this is how we can be spend this money wisely -- that's fine.
But they are creating -- they are spending -- this is 1972 George McGovern-style spending. Spend it like a liberal in the 21st century would spend it. We've got such an extraordinary opportunity to transform our economy, to transform our environment, to transform energy in the 21st century, and they are spending it on welfare programs. It is staggering to me, Pat.
PAT BUCHANAN (MSNBC political analyst): No, Joe, he -- backing you up is Robert Samuelson of The Washington Post, the columnist. His piece is "Too Little Bang for The Buck." He's talking about the grid, and he's talking about, look, this thing is not going to work. Don't do it. Change it. On the other side, you've got E.J. Dionne, who's saying, tell the Republicans to go fly a kite. We're going to ram it through, and he quotes Rahm --
BUCHANAN: -- "We never want a serious crisis to go to waste." That's Democratic politics. The old politics, you know: "Hot dog, we've got a crisis. Let's ram through everything we wanted" --
SCARBOROUGH: And -- and, you know, Mika -- and -- and --
BUCHANAN: -- "we couldn't get through last year."
SCARBOROUGH: -- just to show you the -- I think the only other bill that I've been as disgusted by over the past decade has been the 9-11 bill. After September 11th, Republicans and Democrats alike -- but it was a Republican Congress, so it was a Republican bill -- they crammed through more garbage hiding behind the death, 3,000 deaths on September 11th, hiding behind American --
SCARBOROUGH: -- fears. And so, they used it to create this massive pork barrel project. It was disgusting. It was shameful, and now the Democrats are doing it. And it just leaves Americans thinking, "Where are the leaders in this country?" I hope --
BRZEZINSKI: Well, that is --
SCARBOROUGH: -- there are more Claire McCaskills --
SCARBOROUGH: -- that are picking up the phone, saying to Barack Obama, "Hey, Barack, if you -- Mr. President, if we pass what Nancy Pelosi wants us to pass, I won't be back as a senator from Missouri." We need Democrats in the middle to save this bill and save this country.
BRZEZINSKI: That's the question that's being raised about this bill: Does it parallel to the exact way that the public mindset was used after 9-11. I'm actually going to go to a quote by Martin Feldstein, who's a conservative economist that I picked up yesterday. He says this: "When you're filling a hole this big," Mark Halperin, "and adding to America's debt on such a large scale, you need to make sure every dollar is aimed for the economic boost that you need."
Is that the case in this plan? Even close, does this plan add up to the definition of stimulus? I don't think it does. And I don't question the value of food stamps and helping low-income people pay for college. It just shouldn't be in this bill.
HALPERIN: Well, of course that will help stimulate the economy. But there's no doubt --
BRZEZINSKI: No, it won't, not right now.
HALPERIN: Of course it will. People will spend the money.
BRZEZINSKI: No. No, no.
HALPERIN: I still think the --
BRZEZINSKI: You know what?
HALPERIN: -- substance matters, but the politics matters more. If President Obama wants bipartisan solutions --
HALPERIN: -- again, his stated goal, not mine, his stated goal -- then he needs to look to the Senate process not to try to lure a few Republicans over but to make it a truly bipartisan bill. The Republicans, on the other hand -- and we'll get to this when you talk about Frank Rich's op-ed piece from yesterday -- they have to bring real ideas to the table. Joe, this morning, has thrown out more real ideas about alternative ways to craft this bill than a lot of -- than most Republicans in the Congress have done.