At the Heritage Foundation, Senator John McCain, R.-Az., discussed the state of the economy and his alternative stimulus plan.
Sen. McCain said “I am a fiscal conservative.” He then said “the total cost of the stimulus bill is 1.1 trillion dollars, the Troubled Assets Relief Program (TARP) was 700 billion dollars and they’re giving an additional 750 billion dollars and the omnibus bill cost 740 billion dollars.” McCain continued, “The Congressional Budget Office projected by 2019 we will have spent over 82 percent of the gross domestic product and that the stimulus will hurt the economy in the long run.” He said that “President Obama is creating more debt than any other president and is sending the nation into bankruptcy creating generational theft.” McCain also said “the unemployment rate is 8.1 percent and the money in the stimulus bill is being spent on pork barrel projects.”
McCain then described the stimulus that he supported and said “Republicans understand the current economic crisis and supported a stimulus that included a cut on individual and corporate tax rates and that allowed for smart spending.” He said “the Republican’s alternative stimulus would cost less than half of the compromise measure.” The compromise measure was a compromise reached by a bipartisan group of Senate lawmakers on economic stimulus legislation proposed by President Barack Obama to stop the U.S. economic decline. The economic stimulus package was at one point 900 billion dollars and after the compromise measure was brought down to 789 billion dollars.
Sen. McCain said his plan followed three principles:
• focusing resources on problems;
• marrying resources with the principles;
• and respect.
McCain said “the stimulus bill contains billions that won’t take place for three years and 10 billion on pork and earmarks.” He said that “we should use money in accord with resources and principles of responsibility.” He continued, “We need to discipline failure in order to promote recovery and the solutions should be durable to make economy grow.”
The former presidential candidate said that “the TARP was created to allow treasury to spend billions on toxic assets.” Toxic assets is a non-technical term used to describe certain financial assets when their value has fallen significantly and when there is no longer a functioning market, so that they cannot reasonably be sold. TARP is a program of the United States government to purchase assets and equity from financial institutions in order to strengthen its financial sector; it is the largest component of the government’s measures in 2008 to address the subprime mortgage crisis. McCain said, “In January I supported a resolution to stop TARP funding.” He said “the misuse of the first 350 billion [dollars] was enough reason not to give anymore.” McCain said that “there is a lack of transparency and I will not support another dime of TARP until I see a detailed account of how previous funds were spent.” He continued, “We need restored confidence and job growth to achieve economic growth.”
McCain said “I oppose the GM bailouts.” He then questioned who is too big to fail. McCain said, “the best solution to make the big three viable and strong is a pre-packaged chapter 11 bankruptcy.” He believes bankruptcy doesn’t mean the companies will fail but will emerge stronger. He said that “businesses all over America fail everyday, go into bankruptcy and emerge stronger and restructured.” He said that “the current bailouts continue to infuse tax-payer dollars.”
McCain also discussed the AIG bonuses and said “we need to control abuse without interfering.” AIG has received 170 billion dollars in U.S. government bailouts over the past six months and gave out bonuses totaling 165 million dollars. President Obama has directed treasury secretary Timothy Geithner to pursue every legal avenue to block the bonuses. McCain believes if we let AIG go under they would have to restructure. He said that “there is chapter 11 bankruptcy so corporations big and small can reinvent themselves, not fail and never come back.” He also said “of the last presidential administration that “Republicans let spending get out of control and the President didn’t exercise his veto power.”