Calm under Republican fire, Sec. Vilsack lists Recovery Act achievements

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, July 14 – Agriculture Secretary Tom Vilsack grabbed the lead role Wednesday in the escalating drama over who's to blame for continuing economic woes. In a House Budget Committee hearing on “The American Recovery and Reinvestment Act of 2009: An Update,” Vilsack remained calm under fire as Republican congressmen charged that the administration's costly recovery programs have only stimulated more job losses and more federal debt.

Vilsack wasn't on his own in defending administration actions. House Budget Committee Chair John Spratt (D-SC) opened the hearing by pointing out that when President Obama took office in Jan. 2009, “The economy was shrinking at an annualized rate of 5.4 percent, 779,000 jobs were lost in that one month alone, and over two million in the previous quarter. The deficit at that starting point was projected to be $1.3 trillion for fiscal year 2009.” He contrasted that picture with the picture now: “after adoption of the Recovery Act and after 18 months of other fiscal and monetary relief, the economy is in its third straight quarter of growth, and a net of nearly 900,000 jobs have been created since January 2010.”

Spratt said that to deal with deficit concerns, “We have made 'pay-as-you-go' statutory, created a bipartisan Fiscal Commission, and approved in the House a discretionary spending cap for 2011.” He added that in the committee's June hearing on the administration's recovery efforts, Fed Chairman Ben Bernanke testified that “Certainly, we have averted what I think would have been, absent these interventions, an extraordinarily severe downturn, perhaps a great depression.”

Such could-have-been-far-worse assurances didn't impress the committee's Ranking Member Paul Ryan (R-WI). Ryan told Vilsack that “By every objective measure, from jobs and economic growth to its rising price tag, the stimulus has failed. It has failed to create the jobs promised . . . It has failed to revive the economy . . . There are growing fears of a double dip recession.”

Ryan added that “The government cannot spend, tax and regulate its way into economic prosperity . . . Washington's economic overreach is paralyzing investment and growth . . . From healthcare and the financial sector to the auto industry and a costly cap-and-trade national energy tax, this administration and this Congress seem to believe that the answer to every problem is to explode the size of government and to centralize power in Washington.”

But just as Spratt's and Bernanke's didn't impress Ryan, Ryan's charges didn't seem to impress Vilsack who assured Ryan and other Republican members that “the Recovery Act is working. The investments we are making are not only creating jobs and economic stability, but also funding the technology and infrastructure that will lay the groundwork for future economic growth. . . the Recovery Act is accomplishing even more. It is restoring America in terms of economic growth and vitality and building a new sense of community across our nation. And at the most fundamental level, the Recovery Act is enabling Americans to own homes and is preserving housing for the people all across our country. This is the very core of the American Dream and supports and renews the very values that our nation was founded upon.”

Vilsack boasted that “both public and private economists say the Recovery Act is a driving force behind recent GDP growth and is responsible for millions of jobs. The Recovery Act has pulled us back from an economic crisis and put us on a path toward economic growth. . . In just over one year, USDA has announced all of the $28 billion of ARRA funds provided to the Department. As of June 30, we have obligated $17.2 billion and outlayed $14.1 billion of the funds provided to the Department.”

When Ryan called for halting additional government stimulus spending to use this money instead for deficit reduction, Vilsack thanked Ryan for his suggestion and assured him that “at USDA we do take deficit reduction seriously, which is one of the reasons why we recently completed negotiations on the crop insurance agreement.” He pointed out that of the $6 billion in negotiated savings, $4 billion will go to deficit reduction with the remaining $2 billion to be used for the Conservation Reserve Program, “so we have already taken steps at USDA.” Then he explained that it would be short-sighted to cut back on USDA Recovery Act spending which he said will generate both short-term and long-term benefits through the creation of new jobs and new industries.

Ryan also raised the issue of the recent cotton program dispute settlement with Brazil which Ryan said requires the U.S. to pay “$147 million a year to Brazilian agribusiness so we can continue paying off $3 billion a year to large U.S. agribusinesses.” Vilsack responded that this is “a situation that we inherited” which could result in legal Brazilian retaliatory measures which would cost the U.S. $850 million a year. He said the short-term answer was to limit the damage to $147 million a year while waiting for an opportunity to correct the problem in the next farm bill. Pointing to “reluctance on the part of both Democrats and Republicans to reopen the Farm Bill,” Vilsack said that “If Congress wants to reopen the 2008 Farm Bill, we will be happy to assist in that effort.”

To hear Stewart Doan's audio report on the House Budget Committee hearing, go to:

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