Feb

18

It’s Still the Economy (Stupid)

Filed Under 2008 Election, Economics, Press Release, Taxes | Leave a Comment

Contact: Brad Jansen

703-470-5042

vern@mckinleyforcongress.com

Ashburn, VA—Voters in last week’s Potomac Primaries in Virginia and Maryland responded that the economy was the top issue of concern to them in the midst of weakening economic growth and a potential recession. The House and Senate passed and President Bush signed into law last week a plan of action or “stimulus package” to address these concerns. What passed was a two-year $168 billion economic stimulus package that is meant to give the economy a boost. At the core of the economic package are one-time tax rebate checks to be handed out over the coming months.

When assessing the sensibility of the stimulus package the first question is whether the economy is actually in a recession. Although the economy is slowing, the National Bureau of Economic Research (NBER) is the arbiter of that issue and they have not weighed in one way or another yet. Historically, the NBER weighs in well after a recession starts, as they did not proclaim that the 2001 recession had in fact begun until eight months after it started. So last week’s stimulus package was approved even though it is uncertain whether we are in the midst of a recession. Further, a $168 billion stimulus package in an economy of $14 trillion is insignificant if it is intended to counteract a recession.

Another question to ask is where the money is coming from for this stimulus package. It is a misnomer that the government is injecting money into the economy, as a better way to describe it is moving money around. As the economy has been running at a deficit in the years since the last recession started in 2001, the money is being moved across generations.

“I think that politicians in Washington want to be seen as ‘doing something’ about the troubled economy,” notes Vern McKinley, who is challenging Congressman Wolf for the Republican nomination in the 10th Congressional District of Virginia. Congressman Wolf of Virginia voted for the stimulus package as did most members of the House.

“There are a few good provisions in the package, but the idea that giving out rebates in this manner will give a significant boost to the economy is silly. Any stimulus of this size would not stop a recession if one is already ‘baked in the cake.’ In order to pay for the rebates the government is going to have to borrow in the market. Borrowing from future generations to pay for consumption today is not a good idea. I think we have done enough of that the past few years,” notes Vern McKinley. “We need to focus on longer term issues, like getting the corporate tax rate down or extending the earlier round of tax cuts, which will improve long-term growth prospects,” McKinley concluded.

Feb

18

Long-Time Incumbents Gilchrest, Wynn Trounced in Primaries

Filed Under 2008 Election, Economics, Frank Wolf, Press Release, Republicans | Leave a Comment

Contact: Brad Jansen

703-470-5042

vern@mckinleyforcongress.com

ASHBURN, VA—Last week’s Potomac Primaries on February 12th in Washington, DC, Virginia and Maryland revealed some big surprises. Much of the focus for the evening was on the McCain-Huckabee-Paul and Obama-Clinton contests at the presidential level. But Maryland also held its congressional primaries. Virginia will hold its congressional primaries in June. In Maryland, long-time incumbents Wayne Gilchrest and Albert Wynn, who had both served since the early 1990s, were resoundingly defeated in their primary contests.

Politico.com put the significance of the losses in clear perspective when it noted that these were the first primary losses in nearly two decades suffered by sitting incumbents in Maryland. The fact that two such incumbents were defeated on the same evening, neither of whom was involved in a scandal, made the losses even more significant. Even more surprising, Gilchrest and Wynn could only manage to attract one third of the votes cast in their respective primaries.

Based on these results, 2008 may be a difficult year for incumbents. “We highlighted the early signs of rank-and-file discontent in the Republican Party last summer. In particular we highlighted Andy Harris’ challenge to Wayne Gilchrest,” observes Vern McKinley, who is challenging incumbent Congressman Wolf for the 2008 Republican nomination in the 10th District of Virginia.

The Andy Harris challenge in Maryland was backed by the Club for Growth, a pro growth organization that believes in the limited government economic principles of President Reagan. The Club spent $600,000 highlighting Congressman Gilchrest’s stand on key economic issues, such as pork barrel spending and anti-growth policies. The Club for Growth’s own Congressional Scorecard, which gives ratings from 0 (lowest) to 100 (highest), rated Congressman Gilchrest at 40, while Congressman Wolf was given an even lower score of 36. Another scorecard published by the Club for Growth, its Repork Card, focuses on how much wasteful pork barrel spending members support. Congressman Gilchrest was given a rating of 0%, meaning he voted for pork projects 100% of the time, while Congressman Wolf was given a rating of 4% meaning he voted for pork projects 96% of the time.

“Recent polls show that economic issues are going to be most important for voters in upcoming elections. On key economic issues, Congressmen Gilchrest and Wolf are nearly indistinguishable. Both are long-term incumbents who have drifted away from the Republican principles of limited government. We give Republican voters in the 10th District the option of a limited government candidate,” concluded McKinley.