Uncertainty a problem for economy

Deficit spending, taxes and excessive regulation have combined to create a stew of uncertainty that is at the root of the country’s sluggish economy, Rep. Denny Rehberg said at a Kalispell Chamber of Commerce roundtable discussion Friday.

Montana’s only congressman said there are clear differences in Washington over how to improve the economy: “Government is the solution or government is the problem.”

The Republican asserts that the $1 trillion in spending under the American Recovery and Investment Act did not stimulate the economy as advertised, judging from anemic economic growth and persistently high unemployment.

“It should been timely, targeted, transparent and temporary” and in many ways it was not, he said. “It was sold as stimulus but it did not stimulate.”

That dose of spending played a large role in expanding the national debt to $14 trillion and in propelling annual deficit spending to more than $1 trillion, a situation that Rehberg considers entirely unsustainable.

Terry Kramer, a former chamber president, said in his meetings with business people, there is a common opinion that the biggest hindrance to investment and job creation is regulatory.

As a contractor, he cited new rules that require certifications for people who remodel older homes. 

Rehberg said heaping regulations from the Environmental Protection Agency are aimed at asserting “cap and trade” rules on energy consumers and producers even though Congress would not pass cap and trade legislation.

He said the so-called Dodd-Frank legislation was aimed at reforming large financial institutions but instead it has trickled down to scores of regulations that effect smaller banks, with a tightening effect on loans.

“It’s not one tax, it’s not one regulation, it’s a cumulative effect” that creates uncertainty for investors, employers and consumers, Rehberg said.

Rehberg said he believes federal health care legislation that was passed without Republican support will have a similar effect in addition to resulting in more federal spending.

“Obamacare is a mess,” Rehberg said bluntly. “I still think it will be found unconstitutional.”

Because of that, Rehberg would like to pass legislation that would freeze spending on implementing the law, at least until the Supreme Court rules whether it is constitutional or not.

“We’ve got ourselves in a situation where we have more needs, more desires than we can afford right now,” he said.

Rehberg said it’s easy for politicians to talk about “jobs and the economy,” but they need to be held accountable for exactly how they want to create more jobs and improve the economy.

“So when the president talks about job creation and getting government off your backs, does he do what he says?” Rehberg asked.

Flathead Valley Community College President Jane Karas questioned Rehberg about his support for the Pell grant program.

“For our students, those Pell grants are critical,” Karas said.

Rehberg said he supports the program but has concerns about how it has expanded in the last couple of years.

One-time federal stimulus funding inflated Pell grant enrollments and spending to a point where there are now 9 million people participating, half of whom will not finish school — at a cost of about $43.5 billion a year — an amount that consumes nearly half of total federal spending on education, he said.

For Pell grants, the stimulus “became the new standard,” said Rehberg, who questions whether new expectations for the program can be sustainable.

Reporter Jim Mann may be reached at 758-4407 or by email at jmann@dailyinterlake.com.