By Walter Alarkon - 07/06/09 12:56 PM EDT
Cantor told reporters Monday that Obama made a mistake by pushing through a $787 billion stimulus bill in February that had too much government spending. With the economy still scuffling and unemployment approaching 10 percent, Cantor said that Republicans could back new stimulus legislation that focuses on help for small businesses.
Cantor said that a new stimulus bill could include an income tax cut for small businesses and their employees.
Cantor and Republicans have railed against the initial stimulus and other measures passed by the Democratic Congress and White House because they have increased federal spending and added to the deficit, expected to reach a record $1.8 trillion this year.
But Cantor left the door open to more stimulus legislation even if it led to more red ink.
Cantor said that the efficiencies that save money and help the economy could be found in current programs. He said that lawmakers and the White House should redirect some of the money yet to be spent in the first stimulus away from government programs and toward businesses and taxpayers.
"Let's all be very reasoned and thoughtful; we ought to match any attempt ... with some fiscal restraint in Washington," he said.
During debate over the first stimulus package, Democrats and Republicans tussled over how much money to include for government spending and how much to include for tax cuts. Democrats favored more spending on government programs, citing economists who argued they would directly increase consumption and thus spur the economy. Republicans said that tax cuts were better because they would go straight to small businesses and taxpayers. Cantor and other Republicans backed an alternative that cost less and included more income and corporate tax reductions.
The $787 billion bill passed in February steered approximately 60 percent of its funds to government programs and less than 40 percent toward tax cuts.
The Obama administration in recent days hasn't ruled out another stimulus package to help the economy. Vice President Biden said on ABC Sunday that the administration "misread just how bad the economy was." But he added it was premature to say whether more stimulus was needed.
Cantor used Biden's remarks to slam the first stimulus bill and tout the GOP's approach.
"It is my belief that they didn't misread the economy," Cantor said. "What they did is they misread the stimulus bill and got the prescription wrong."