When President Barack Obama took the oath of office about a year ago, he inherited the biggest economic mess since the 1930's: millions of Americans losing their homes to foreclosure and their jobs to a steadily deteriorating economy, huge budget deficits fueled by tax cuts for the wealthy and two wars his predecessor simply put on the national credit card, mushrooming national debt and some of the biggest barons on Wall Street in financial collapse.
A year later, we take stock. The President's State of the Union speech provided a good overview. A new document just released by the U.S. Senate's Democratic Policy Committee, which I chair, takes a similar look at the challenges we faced in 2009 and the work the President and Democrats in Congress accomplished to keep the economy from completely collapsing.
The Bush recession was wide and deep, as difficult as we've seen since Herbert Hoover's Great Depression. It took much of the past year to enact the economic rescue program and put it in place. We are now beginning to see some significant results.
I invite you to read the document in its entirety. Nobody claims the economy is totally back on its feet, but it is hard to deny, even as difficulties continue, that policies enacted over the past year pulled the U.S. economy back from the brink of disaster and helped to stabilize it. There is lots more detail in the just-released DPC document
, but here is a sampling of some of the legislation Congress enacted over the past year that have worked, and that we must now build on to hasten and strengthen economic recovery.
- The American Reinvestment and Recovery Act: stabilized the economy and saved millions of jobs that otherwise would have been lost. It also provided tax relief for the middle class, and strengthened the safety net for Americans suffering the most.
- The Helping Families save Their Homes Act: strengthened the housing market and helped many families avoid losing their home to foreclosure.
- The Credit Card Accountability and Responsibility and Disclosure Act of 2009: gave consumers new protections from abusive credit card practices.
- Cash for Clunkers: strengthened the auto industry, increased the U.S. auto fleet's fuel efficiency.
- Small Business Innovation Research (SBIR) and Small Business Technology Transfer programs (STTR): increased resources for small businesses and entrepreneurs to grow and expand their businesses.
- Tax cuts for middle Americans -- The Making Work Pay tax credit provided a tax cut for 95% of working families; Expansion of the Child Tax Credit and the Earned Income Tax Credit, and expansion of the First Time Homebuyer Tax credit as well new tax relief for small businesses also meant more disposable income for working families, which helped families make ends meet and helped stimulate the economy.
It's been a tough year, but the investments we made in the economy pulled it back from the brink of disaster. We're not out of the woods yet by a long shot, but there are signs the Bush Recession may now be ending. The final quarter of 2009 showed real economic growth, at the fastest pace in six years. Many economists are forecasting even more growth in the first quarter of 2010.
President Obama likes to say that the federal government and our economy are like an ocean liner, not a motor boat. It takes quite a while to turn them around. The DPC policy paper documents how we've been doing turning it around and the progress we're making.
Our next challenge: build on those fundamental improvements to create more jobs and sustained economic growth in 2010.