With leaders in Washington, including President-elect Barack Obama, ratcheting up their calls for another economic stimulus bill, the reaction among Kentucky's congressional delegation has been mixed — just as it has been on most economic proposals lately.
But Obama and Democratic House Speaker Nancy Pelosi could have a key ally in Kentucky's most high-profile federal official, U.S. Sen. Mitch McConnell, the Republican Senate Leader.
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"You can put me down as among those feeling that it's the right thing to do," McCon nell said two weeks ago after a campaign stop in Hopkinsville.
Specifically, McConnell said he'd back a stimulus package that extends unemployment benefits and suspends penalties for people who take money out of IRA or 401(k) accounts early.
"We ought to defer that because obviously, during this period, the value of a lot of IRAs and401(k)s are a lot lower than they're going to be in the future," he said.
McConnell, however, was cooler on the idea of accelerating federal highway and other public works projects, as suggested by Pelosi and others.
"We're going to talk about all aspects of it," he said.
Pelosi of California and Senate Democratic Leader Harry Reid of Nevada have called for Congress to reconvene on Nov. 17 to consider a plan similar to a $60.8 billion proposal the House passed in September. It included spending for highways, public transit and housing projects, as well as job training and energy bill assistance programs.
That bill stalled in the Senate and wasn't supported by President Bush, who in January successfully pushed for a $150 billion stimulus package that sent taxpayers rebate checks.
U.S. Rep. Ben Chandler, D-Versailles, voted for that stimulus bill because "it was the only thing on the table at the time." He said he would prefer trying to bolster the economy through public projects.
"I just think it's a better approach for the long-term health of the economy because we create jobs that can't be exported and the money goes to people directly in the form of jobs," he said at a campaign stop in Paris last month.
But Republican U.S. Sen. Jim Bunning said a public works project approach won't provide an immediate jump-start that the declining economy needs.
"I don't know how helpful that kind of stimulus is," Bunning said Saturday. "That's a six-month to nine-month delay."
Bunning said he didn't think Congress needed to act again but added that he would reserve judgment until he sees a proposal.
He said Obama and Democratic congressional leaders would be wise to limit an initial package to "new unemployment benefits" and some incentives for low-to-middle income Americans during a November special session.
"But he ought to wait until he takes over if he wants to do a real stimulus package that can immediately affect the economy," Bunning said of Obama.
U.S. Rep. Geoff Davis, R-Hebron, said Congress needs to rein in spending, not shell out billions of dollars more at a time like this.
"The idea that we could spend our way or tax our way to prosperity is logically flawed," he said. "We have to hold the line against spending."
He agreed with Bunning that pouring money into construction projects does little to shock the economy back to life and said it could prolong the misery by adding to the nation's debt.
"The historic lesson is that you can print money, but that extends the length of time to get out of" a recession, he said.
Instead, Davis said, he will propose up to $15,000 in tax credits to people who invest in energy saving systems, such as doors, windows, appliances, insulation or heat pumps. Energy research and conservation is the type of stimulus the country needs most because it will create permanent jobs, he said.
Davis said the government already overreached by shelling out nearly $1 trillion to help Wall Street firms and banks during turmoil in the markets stemming from the collapse of the housing market and a rash of bad mortgages.
Davis joined Bunning, Chandler and Republican U.S. Rep. Ed Whitfield of Hopkinsville to oppose the bailout bill. McConnell, Democratic Rep. John Yarmuth of Louisville and Republican Reps. Hal Rogers of Somerset and Ron Lewis of Cecilia, who is retiring at the end of the year, supported that legislation.
McConnell said it was necessary to grease the national and international credit markets that had nearly ground to a halt.