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Leader McConnell Says Package Won't Work

Leader McConnell Says Package Won't Work

Sen. Mitch McConnell - February 6, 2009

Floor of the U.S. Senate

"The question of whether or not the economy needs help is really not in debate. I don't think there's a single member of the Senate that believes that no action is the appropriate course for us to take.

"But one of the good things about reading history is you learn a good deal. And, we know for sure that the big spending programs of the New Deal did not work.

"In 1940, unemployment was still 15%. And, it's widely agreed among economists, that what got us out of the doldrums that we were in during the Depression was the beginning of World War II.

"We have another example.

"What is called in Japan the Lost Decade of the 1990's, where stimulus packages similar to the one we're considering tonight were tried again, and again, and again. And, at the end of the 1990's, Japan, looked very much like it did at the beginning of the 1990's, except that it had a much larger debt.

"Now, we've not seen the compromise proposal, which has been discussed here tonight. And, I know there's been a good faith effort on the part of those involved to pare down the size of the underlying Senate measure.

"But as near as we can tell, even after those efforts, it is roughly the same size as the House bill.

"According to the figures I've been given, the House bill is about $820 billion. The Senate bill, under the compromise, we believe, would be about $827 billion. Bear in mind the interest costs on either of those proposals would be $348 billion. So we're really talking about a $1.1 trillion pending measure.

"A $1.1 trillion spending measure. We're looking at a $1 trillion deficit for this fiscal year.

"We believe that the Secretary of the Treasury and the President will suggest to us as early as next week that we need to do -- what has commonly become referred to as a TARP round - some kind of additional assistance for the financial system as early as next week. We're talking about an extraordinarily large amount of money and a crushing debt for our grandchildren.

"Now, if most Republicans were convinced that this would work, there might be a greater willingness to support it. But all the historical evidence suggests that it's highly unlikely to work. And so, you have to balance the likelihood of success versus the crushing debt that we're levying on the backs of our children, our grandchildren, and, yes, their children.

"And the need to finance all of this debt which many suspect would lead to ever higher and higher interest rates which could create a new round of problems for our economy.

"So let me just sum it up by saying no action is not what any of my Republican colleagues are advocating. But most of us are deeply skeptical that this will work. And that level of skepticism leads us to believe that this course of action should not be chosen.

"We had an opportunity to do this in a truly bipartisan basis and the President said originally he had hoped to get 80 votes. It appears that, the way this has developed, there will be some bipartisan support, but not a lot. And it's not likely, in the judgment of most of us, to produce the result that we all desire.

"So, I will not be in a position to recommend support for this product as it has developed in spite, again, of the best efforts of those who worked on the compromise. I commend them for their willingness to try to work this out. It seems to me that it falls far short of the kind of measure that we should be passing.

Mitch McConnell is a U.S. Senator from Kentucky and Senate Minority Leader.

Sen. Mitch McConnell

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