Abuses on Wall Street and at such agencies as Freddie Mac and Fannie Mae were to blame for the economic problems facing the nation, not tax cuts which are set to expire later this year, U.S. Sen. Roger Wicker said Tuesday.
Wicker spoke to the Starkville Kiwanis Club at its meeting Tuesday.
He brought up the pending expiration on Dec. 31 of what’s been called the “Bush” tax cuts of 2001 and 2003. If they expire, taxpayers will return to the rate they had been paying prior to the cuts and estate taxes will also climb, he said.
“There’s one view (and) ... you hear it when the president is talking. He seems to suggest that these policies ... “ are what “caused the economy to go off in the ditch in 2008,” Wicker said. “I respectfully disagree with that view.”
Instead, Wicker believes the economy went down because of Wall Street abuses and those at Fannie Mae and Freddie Mac.
“I think there’s a growing bipartisan chorus ... “ to say “’this is not the time to raise taxes on anybody,’” Wicker said, be they “ ... job creators or anybody else.”
Wicker said: “We really face some grave challenges at the federal level.”
The nation’s 9.5 percent unemployment rate – “is ... such a shame and it’s such a drag on our economy. This is a jobless recovery if it’s a recovery at all and I’m not sure it is,” Wicker said.
The national debt is now $13 trillion.
During his talk, Wicker mentioned he’d been speaking with Starkville Mayor Parker Wiseman during lunch.
“He told me the greatest challenge the City of Starkville has is (it’s) budget – just the money,” Wicker said.
The difference between local, state and federal governments is the national-level entity “has a printing press and over time if Congress and the president in their wisdom wanted to spend some money and we didn’t have the money, they just ginned up the printing press,” Wicker said. “Over three years’ time, that printing press ... will have added $4 trillion to the national debt.”
On top of the spending issues, people in the Southeast face problems with the administration’s six-month drilling moratorium in the Gulf, Wicker said.
If the moratorium stays in place for the six months, Wicker said: “We could lose 8,000 direct jobs and many more spinoff jobs. Our economy in the Gulf South is very much tied to offshore drilling.”
Some new guidelines were put in place and Wicker thought officials would reopen drilling, but there’s none. “This means trouble for Mississippi and also it means trouble for the United States of America,” he said.
There are those who want the nation to get off of fossil fuels, “but for now and for a number of years we’re going to run this economy on petroleum and a lot of that petroleum comes out of the Gulf of Mexico,” Wicker said.
He also mentioned several positives.Among the first he brought up was that the “oil spill is plugged ... and I think it’s plugged for good.” Then, he mentioned that thousands of troops are coming home from Iraq.
“I believe this is because the (troop) surge worked and it’s a testimony to the determination of our troops,” their talent and the determination of former President George W. Bush and Congress “to give them the backing they needed.”
In terms of Mississippi’s economy, “we continue to regret the unemployment rate” in the state, but as of Tuesday, there’s been an upswing in corporate investment in the state, he said.
Wicker also said Mississippi State University “still continues to provide great research for the American taxpayers,” Wicker said, adding that MSU is involved with “almost every federal agency.”
The university has conducted $340 million in research for the federal government over the past 15 years, he said. In 1995 – when Wicker joined the Appropriations Committee in the House of Representatives – MSU received $36.5 million in research funds. Last year, the university performed $92.4 million in research, he said.