Only problem with stimulus is lack of payback plan, Rounds says

Republican Gov. Mike Rounds had little difficulty accepting money from the federal government’s $787 billion economic stimulus package, despite belonging to a party that claims to be against big government spending.

He figures future generations of South Dakotans will be stuck paying off the debt from the stimulus, just like other Americans. And if South Dakotans are going to pay the price, they might as well reap the benefits.

“So we put it into water projects, and we put it into road-improvement projects,” Rounds said, referring to the major uses of $229 million in stimulus money spent by the state so far. “That will last for decades, so our kids that are actually going to bear this burden will see some of the fruits.”

Rounds made the comments to The Daily Republic following his Thursday meeting at Mitchell’s Highland Conference Center with about 30 businesspeople.

During the meeting, Rounds said he had no complaint with the concept of a stimulus package.

“My complaint,” he said, “is that they have no plan to pay it back.”

Without such a plan, Rounds said, future generations will be saddled with a devalued dollar or higher interest rates and a lower standard of living.

The stimulus was one of many topics Rounds covered during the meeting, which lasted nearly an hour and a half. Following are summaries of his thoughts on some other topics.

Cap and trade

Rounds’ visit to Mitchell came just one day after Mitchell resident and state Public Utilities Commission Chairman Dusty Johnson testified in Washington, D.C., against so-called “cap and trade” legislation.

The legislation seeks to cap nationwide emissions of greenhouse gases at declining levels and would allow power plants, factories and other polluters to buy and sell pollution allowances. It’s thought that the cap and the cost of the allowances would drive emission levels down over time, thereby lessening the nation’s contribution to global warming.

Rounds said he, too, opposes the legislation because he thinks the costs of the allowances will be passed on to energy consumers — especially in states like South Dakota, which depends largely on “dirty” energy sources like coal and diesel.

“What nobody seems to want to talk about is that somebody’s going to have to pay the bill, and it’s a new tax,” Rounds said.

Credit-card reform

Rounds said recent congressional reforms of the credit-card industry could result in 3,000 to 5,000 job losses from credit-card operations in South Dakota.

The reforms were pitched as consumer protections against surprise credit-card charges, but Rounds said the reforms are putting some unnecessary restrictions on credit-card companies that will lead to millions of people losing their cards, as well as increased fees and fewer rewards for responsible card users.

Rounds said credit-card officials in South Dakota are researching different business models that would allow them to avoid mass layoffs, but those efforts have not yet produced any clear solutions.

Economic development

The Governor’s Office of Economic Development has an all-time high of 300 active prospects interested in expanding to South Dakota or relocating here, Rounds said.

He attributed the high number to the economic recession, which he said has made businesspeople painfully aware of some non-business-friendly laws and regulations in other states. Those businesspeople are looking more closely at South Dakota, Rounds said, because the state consistently ranks near the top of business-climate surveys.

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