O'Donnell Campaign Blasts Hoyer 'Food Stamps' Remarks

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O'Donnell Campaign Blasts Hoyer 'Food Stamps' Remarks

Washington, D.C. - 7/20/2012

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By Andy Marquis

House Minority Whip Steny Hoyer (D: MD-5th) has been blasted by conservatives across the country, including congressional candidate and Maryland House Minority Leader Tony O’Donnell (R: District 29C) for remarks he made about the simulative effects of food stamp and unemployment programs.
“If you talk to economists, they will tell you there are two things that are the most simulative that you can do,” Hoyer said on Tuesday during a briefing with reporters. “One’s unemployment insurance, the other’s food stamps, okay? Why is that? Because those folks who receive those resources must spend them. And they’ll spend them almost upon receipt. Most economists with whom I talk believe that those with significant discretionary income, that that’s not the case.”
Hoyer made the remarks while speaking out in support of a plan by President Barack Obama (D) to extend the tax cuts on most Americans while allowing them to expire for Americans with incomes above $250,000/year. Hoyer has been criticized for those remarks by FOX News anchor Neil Cavuto and by prominent conservative blogs such as NewsBusters and TownHall. The O’Donnell campaign seized on the opportunity and sent out a fundraising email saying that it was time to “cancel Hoyer’s food stamp economics.”
“Steny Hoyer has finally broken with reality: as reported by the Capitol News Service,” the email sent by the campaign states. “Our economy is in a shambles, unemployment has doubled, and Hoyer thinks we just need more people on Food Stamps. That’s not the American dream, and that’s certainly not leadership. We need real leadership, focused on jobs, working every day on Maryland’s problems – not for his sixteenth re-election. Hoyer wants to re-distribute wealth to buy more votes, when we need a leader that will work to save our opportunities. It’s Time – today is the day - we need your help. If you think It’s Time to cancel Hoyer’s Food Stamp economics, donate $20 today!”
Despite the criticism that’s been lodged at Hoyer, some economists do believe that unemployment benefits and food stamp programs are the most simulative programs.
“Transfers to persons (for example, unemployment insurance and nutrition assistance) would also have a significant impact on Gross Domestic Product (GDP),” CBO Director Douglas Elmendorf said in testimony before House of Representatives’ Committee on the Budget in January 2009. “Because a large amount of such spending can occur quickly, transfers would have a significant impact on GDP by early 2010. Transfers also include refundable tax credits, which have an impact similar to that of a temporary tax cut.
“A dollar's worth of a temporary tax cut would have a smaller effect on GDP than a dollar's worth of direct purchases or transfers, because a significant share of the tax cut would probably be saved. The nonbusiness tax cuts in H.R. 1 would reduce revenues much more in calendar year 2010 than in calendar year 2009 because much of the reduction in taxes would be realized by households when they filed their returns in 2010.”
“To provide the largest bang for the buck, a well-designed stimulus plan should include a temporary increase in government spending,” Moody Economy’s chief economist Mark Zandi said in 2008.  “Spending increases benefit the economy as soon as the money is disbursed, and the economic benefit is less likely to be diluted by increased imports.  The most efficacious spending includes extending unemployment insurance benefits, expanding the food stamp program, and increasing aid to hard-pressed state and local governments.  Increasing infrastructure spending would also greatly boost the economy, particularly in the current downturn, as the economy's problems are expected to last for an extended period.”
The Center of Economic and Policy Research and the Economic Policy Institute have echoed the same sentiments in the past, claiming that unemployment is simulative because it is money that is spent by the person receiving it.
The two programs have been debated many times during the recession. Democrats, like Hoyer, believe the programs should not be cut at this time. Republicans have pointed to the overall desire to cut the federal deficit when saying the programs should be cut.

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