Posted October 29, 2008 at 11:01 am, in From the News
By Jared Bernstein
Director of the Living Standards Program, Economic Policy Institute
Most Congressional hearings are not that scintillating. The ones you see on TV, with Roger Clemens testifying about steroids, Ben Bernanke, or some general back from the field, are the exceptions (and let’s face it: they’re pretty predictable too, with important people working hard to not say anything important). Mostly, it’s a group of policy wonks or industry reps talking to members of Congress about some minutiae in a bill that may or may not go anywhere. At their worst, these hearings are scripted events where actors trot out their lines in order to move (or block) some legislation valuable (or hurtful) to their constituents.
At their best, however, a hearing can be a great example of good government in action, and as someone whose been testifying for years, let me tell you about one from last week that struck me as uniquely positive. My point is not simply to report on an unusually useful couple of hours in the halls of government. At the risk of over-extrapolating, I thought I saw a glimpse of what our political future might look like if we make the right choice on Nov. 4. And it provided a glimmer of hope.
The hearing was before the House Committee on Education and Labor, chaired by Rep. George Miller (D-CA). The topic was how to best craft a recovery package to accomplish two things: help those hurt by the troubled economy, and stimulate that economy back to life. The majority party gets to choose most of the witnesses, so this panel featured only one Republican witness and, uncharacteristically, not one Republican member of the committee showed up.
This sounds like glib snark, but I can tell you based on personal experience, that’s one reason why this hearing worked well. Like I said, I’ve done these for years, and ever since Reagan, Republican witnesses in economic hearings almost always have one, and only one, theme: supply-side tax cuts (okay, lately they’ve added “drill, baby, drill,” but that’s a newcomer, and it’s just about as compelling as their tax plan; oh yes, and “deregulation” shows up a lot too, though this is a bit of a non-starter right now, to put it mildly).
If you don’t believe me, read the testimony at the above link by the R witness, William Beach from the conservative Heritage Foundation: high-end tax cuts (extend the Bush cuts, cut the capital gains rate, lower the corporate tax), find more oil, avoid “burdensome regulations.”
That’s almost all they bring to the table, regardless of the evidence, the topic, or outside circumstances. Case in point, this hearing was about a stimulus package that needs to move quickly off the mark, and Beach was pushing tax changes (extending the Bush cuts) that come into play at the end of 2010. It’s the same supply-side agenda the Heritage folks push in good times and bad. Their only tool is a hammer, so it all looks like nails to them. Same with the oil thing. Does Beach not recognize that the price of gas is down well over a dollar nation-wide, yet we’re still mired in recession?
As I wrote last week in this space, ideology that’s impervious to facts is the last thing we need right now, and the fact that such thinking was vastly under-represented was one reason why this hearing worked.
The hearing began with testimony by Dana Stevens, a woman from New Jersey who’s been unemployed since July. Since then she’s applied for 143 jobs and gotten only seven interviews. She’s an extremely impressive, articulate person, and she’s even willing to take a pay cut, within reason given her financial needs.
But there’s just no work out there. Hiring freezes are pervasive. Back in January of last year there were 1.5 job seekers per available job. Now that ratio has doubled–it’s 3 to 1. Add in the six million people who are working fewer hours than they desire, and one in nine persons is un- or underemployed.
Economist Ron Blackwell and I presented facts like these, along with our views re the magnitude and composition of a recovery package. In order to offset a recession that is likely to drive unemployment to at least 8% by the end of next year (it’s about 6% now), I think we need to spend roughly $50 billion to help strapped states, $50 billion on infrastructure (more on that below), and $50 billion on extending both unemployment insurance and food stamps. Beyond that, it might be useful to boost household incomes with direct payments, but that was the exclusive thrust of the last round of stimulus, and we should deemphasize such payments this round. Checks can help for awhile, no question, but people need jobs, and that’s why many of us are bullish on infrastructure investment right now.
Here’s where Professor Robert Pollin’s testimony comes in. Do yourself a favor, and give this one a read (same link as above). It’s a detailed road map of a vital public investment agenda, with an emphasis on green technologies. There are the usual candidates–schools, water management, roads, bridges–as well as building retrofits, smart grid electrical systems, and renewable energy. Moreover, Pollin shows that in terms of jobs, these investments get you a bigger bang for the buck than tax cuts, military spending, or “drill, baby, drill” (see his figure 1).
In a similar vein, Chris Hansen made a solid case for including the expansion of high speed broadband networks in an infrastructure agenda, providing access to areas that are still off this grid, a serious economic and social disadvantage in today’s world.
(A related point in my testimony is that infrastructure investment has often been dismissed in the context of stimulus as having too long a lead time. Not so. There are tons of productive projects in all of these areas ready to go, if not already underway but starved for resources.)
But beyond the good information exchange, what stood out in this hearing was the discussion between the members of Congress and the panelists. These exchanges can too often reduce to partisans getting “experts” to confirm their biases: “Mr. X, you noted in your testimony that 2+2=5. Could you elaborate?”
In this case, members were genuinely seeking our insights into how to structure a recovery package, and providing their own amplification as to what parts made most sense to them. Reps. George Miller and Lynn Woolsey, clearly motivated by the deteriorating economy and rising unemployment, wanted to hear about ways we might extend unemployment insurance benefits to meet the needs of people like Ms. Stevens, including upping the “replacement rate”–the share of salary replaced by UI benefits (it rarely breaks 50%; I think now’s a good time to go up to 70%, at least temporarily).
John Sarbanes (D-MD) picked up on a great Pollin point about “crowding in”–how sometimes government investment creates untapped markets that later draws in private investment. The internet is, of course, a classic example, and green technologies create the same possibilities, with even greater potential benefits.
Other members, like Dave Loebsack (D-IA) stressed how the recession is cutting into their state’s revenues, and wanted to learn more about the actions states were taking. Unlike the Feds, states have to balance their budgets, and they’re actively cutting services (and jobs), as well as raising fees and taxes, actions that will only serve to deepen the recession. Thus, unlike the earlier stimulus package, this one must include state fiscal relief.
Like I said, I don’t want to get all starry-eyed here, but I couldn’t help but wonder if the dynamics of this hearing–creative, open-minded thinking about solving problems in a progressive, even green, way–might be a tiny harbinger of a new era, where government actually works to solve problems, not create them. Is this, I asked myself, the way things might operate in an Obama era?
I know, this election is by no means over, and despite the favorable polls, I’m not one iota complacent about the outcome. It’s just that this hearing revealed what may be a light at the end of the tunnel. Unless that’s the headlights of the Straight-talk Express headed right for us.