Caplis & Silverman, Mike Coffman, 2/10/2009

Station: 630 K-HOW
Show: Caplis & Silverman Show
Guest: Mike Coffman
Date: 2/10/2009
Topics: Stimulus, Infrastructure, School Construction Funding.
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CAPLIS: Congressman Mike Coffman, welcome back to 630 KHOW. How are you doing sir?

COFFMAN:I am doing great.

CAPLIS: Good, Good, good. What about this so-called stimulus package? So few of us, and I even had a chance to read it all cover to cover and I think I have a real good feel for the pieces, but you do this for a living. Bottom line, what is this going to do to our economy long term and what do you think the big problems with it are? If there are parts of it you like we would love to hear that too.

COFFMAN: There are some elements that are good. They are just not strong enough. There is some tax relief in it and there is a little bit of money for roads and bridges. Not that much in fact. There is less money in the Senate version than there was in the House version. I think they cut that back some. It’s more money in the Senate version versus the House version. My central concern is that in order to have a successful program it has to be targeted. In other words, everything has to be job producing. And the President said last night, hey there are some things that are not simulative. Well Mr. President, we need to get those things out. And the other thing, it needs to be temporary. In my view, it should just be just for the first two years, this year and next year, without any recurring obligation. And it doesn’t. There is a lot of entitlement spending that’s got a recurring obligation that’s going to kill us as this economy improves and we come out of the recession and we have private borrowing competing with a public sector federal deficit and the borrowing responsibilities of the federal government. And that’s high interest rates and high inflation. So I am just very concerned. And timely, I think it needs to be quick. It needs to arrest the slide of this recession and it needs to do it now and not down the road.

SILVERMAN: Hey Congressman, good to hear from you again. When you talk about infrastructure, lets talk about Colorado. There are a lot of projects that aren’t shovel ready this minute. Are you saying that it is not good stimulus to put on the drawing board some necessary bridge repairs and maybe some transportation that takes 12 months to get going?

COFFMAN: If it is not shovel ready, no. But shovel ready, that could be this summer or it could be as late as the fall. But it’s this year. And it is shovel ready. And once started, it could go into next year, but I would say not beyond that. I think the problem is this, that we are borrowing every single dime to fund this. This is not that we have the money sitting in Washington, these tax revenues to spend. So I think that we are plunging this nation deeper and deeper into debt as it has never happened in the history of this country.

SILVERMAN: Well, I agree. So what are you suggesting? That we not do it? That we not have the stimulus package? Because Barack Obama said last night, hey, I didn’t come up with this $800 billion figure on my own. This is what the Republicans and the Democrats are talking about. The size of the stimulus package that is necessary given the dire condition that we are in. I like to live within my means. I am not big on borrowing for anything other than to buy a house. Are you saying we shouldn’t barrow money?

COFFMAN:I do think that the situation is so severe that it warrants it. And obviously, from my point of view, that the greatest stimulus to the economy is by allowing individuals, small businesses owners, and corporations to keep their money in their pockets. And let the individual spend it versus the government spend it. So they can spend it their way.

SILVERMAN: But they are keeping it in their pockets. That’s the problem. Everybody is afraid to spend money. And you district, you’ve got car dealers…

COFFMAN: But to use their money to pay down their credit cards, to use the money to pay their mortgage, those are not bad things for this economy. I think that is what sends the right signals to get this economy moving. But let me tell you about one of the things that I have been having discussions back in the district. Today I talked to the National Executive Director for the Community Bankers Association. Yesterday I talked to the Colorado Executive Director for the Colorado Independent Bankers Association. I talked to the Executive Director of the Colorado Bankers Association. What we have contradictory regulatory policies that on one hand you have the TARP thats bureaucratic, difficult for these banks to navigate. Saying here is money out there for you to lend. And then we’ve got regulatory policies that are coming down on them very hard. And they aren’t coming down on the big banks that are greatly raising their reserve requirements, causing them to re-capitalize and pull back. We need to sort through these. Some of it may not be dumping more and more money into it. So of it maybe straitening out the bureaucratic morass that affects the grassroots of our financial system. To get these credit markets moving.

SILVERMAN: Lets talk about some specifics. For example, 1: Barack Obama says we have crumbling schools and they should be fixed. And new science labs because America has fallen behind in science. That is going to put people to work constructing new school buildings and hopefully help us down the road with a better-educated society. Do you disagree with that?

COFFMAN: You know, in a way I do. Because not all school districts, it’s not a one-size-fits-all for this country. I think the example that came up was a Milwaukee school system that has declining enrolment and has a shift towards charter schools and actually has a Choice Act where children can go to private schools with a scholarship. And Denver Public Schools has declining enrollment. They don’t need to build more schools. So you’ve got a lot of urban school districts that that’s not their issue. And yet they are given money for a single purpose. That doesn’t make sense.

SILVERMAN: That’s a good point. What about replacing the federal fleet with hybrid cars? Barack Obama says that’s good on a number of levels. It would put American carmakers to work building the right kind of cars. And you have employment plus the payoff with the better fuel efficiency and less money going oversees to regimes that don’t like us too much.

COFFMAN:I still think that the better value now, and what we need to look at, is not agenda driven, but what is going to have the highest simulative effect in terms of saving and creating jobs. And again, I think it is tax relief and spending, I would settle on some infrastructure development that directly puts the private sector to work on those projects. This is just the full employment act for a lot of government bureaucrats and I think it’s the wrong direction. And I worry about the way that this legislation is structured, first of all, there is a lot of spending in the third and forth year. And there is a lot of spending beyond that in terms of recurring obligations that is going to choke our ability for this economy to recover.

CAPLIS: Congressman, I think that is such a key point. Because we had the benefit of having Sen. Udall on yesterday, and I asked him, Senator, what percentage of this comes online in the first 18 months? And he said 30-35 percent doesn’t come on in the first 16 months. That means that $2-300 billion, depending on where this ends up, $2-300 billion wont even begin to come on until 16 months out. CBO says this recession will end on its own some time in late 2009. So how can they look anybody in the eye and say that this is emergency stimulus necessary for a emergency stimulus package when $2-300 billion doesn’t even come online until that.

COFFMAN: It is just extraordinary. I think that what this is a pin up demand of programs, a wish list of programs that has been pinned up over the years. And now the floodgates have opened. And it reminds me of when they have these reality TV shows, I haven’t seen one in a long time, but they do this. I remember when somebody is allowed to go into the grocery store or some retail outlet for 30 minutes and pick anything off the shelf they want and they can have that for free. And that is what it is kind of like for politics in Washington right now. It’s just a spending frenzy that is so dangerous to this economy. Right now, it used to mean something to say $100 billion was a very significant number. And now its like, well, if we are going to spend $100 billion, why don’t we just spend $200 billion? Why not a trillion? Why not more than a trillion? And when all is said and done, it is not just this stimulus package. The exposure is incredible. With the TARP and all the other programs that have been done to the bottom line of this country.

SILVERMAN: That’s right. Well said. We appreciate your time.