Obama's Stimulus Package

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Today, President-elect Obama is moving forward with what he has billed as his top priority: an economic stimulus package called the "American Recovery and Reinvestment Plan." He is scheduled to meet with House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV), and possibly the Republican leaders in both chambers. In his weekend radio address, Obama said that his goal is to put together a plan that "not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term." The package will focus on providing assistance to low- and middle-income Americans, strengthening the nation's infrastructure, and investing in states that are struggling with falling revenues, with the goal of creating or preserving at least 3 million jobs over the next two years. Underscoring the urgency of addressing the nation's faltering economy, Pelosi has said that her goal is to pass a bill that is ready to be signed by Obama once he takes office on Jan. 20. However, House Majority Leader Steny Hoyer (D-MD) has cast doubt on such an expedited timeline, and many conservatives are already indicating that they plan to block this progress. Obama spokesman Robert Gibbs conceded that the stimulus package is "unlikely" to be ready by the inauguration.

Middle-Class Assistance:

Over the weekend, Obama officials announced that they would like Congress to direct 40 percent of the stimulus bill toward tax breaks aimed at businesses and middle-class workers. Most workers would receive a $500 payroll credit, and some businesses would "receive incentives to create jobs and make equipment purchases more affordable." While these cuts may be able to give the economy a kick-start right away, they are also meant to assuage skeptical conservatives. Congressional Democratic leaders are also considering unemployment benefits and health coverage to assist jobless workers, as economists predict that the U.S. unemployment rate could reach 10 percent by the end of 2009. Obama's goal of creating 3 million jobs will be spurred by the creation of "green" jobs that would not only begin addressing the country's energy needs by shifting to clean energy but also contribute to private sector job creation. A Center for American Progress report by Dr. Robert Pollin and University of Massachusetts Political Economy Research Institute economists estimates that by investing $100 billion over two years, the United States could create 2 million jobs, "with a significant proportion in the struggling construction and manufacturing sectors."

Infrastructure Development

Another important part of Obama's job creation plan is infrastructure investment. When a water main broke in suburban Maryland last month -- trapping a dozen commuters in their cars as four feet of freezing cold water surged around them -- the public received a startling reminder of the current state of the country's crumbling infrastructure. The American Society of Civil Engineers estimates that $1.6 trillion is needed over the next five years to repair and restore the nation's infrastructure." As NPR has pointed out, "Every $1 billion the federal government commits to roads, bridges and other infrastructure helps to support some 35,000 jobs." This program should repair existing roads and bridges, not pay to build new highways that would foster sprawl and increase oil consumption. "The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn't needed," wrote New York Times columnist Paul Krugman in October. "Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let's get those projects rolling." Indeed, a November Washington Post-ABC News poll found that almost 70 percent of those surveyed said "they support new federal spending of as much as $700 billion on construction projects and other programs to try to stimulate the economy," even if it means increasing the size of the deficit.

Direct Aid to States:

As CAP has noted, a stimulus package also needs to "help states cope with falling revenues that otherwise force them to lay off workers, cut spending on critical safety-net programs, and shortchange areas of long-term importance such as education, infrastructure investment, and health care." Several governors have already appealed to the federal government for assistance. "I firmly believe that if it took only two weeks for the federal government to find $700 billion to bail out Wall Street and bank executives," New York Gov. David Paterson (D) told Congress, "then we ought to be able to find a fraction of that amount to help preserve essential services at the state level." Health care, in particular, is one of the top costs plaguing the states. Currently, at least 27 states are facing budget gaps and some have already slashed safety-net programs. Medicaid consumes an average 17 percent of state budgets. Media reports indicate that Obama and congressional leaders are pushing for direct aid to states, which may "come in the form of payments that could help meet the growing costs of Medicaid spending."

Conservative Obstruction:

Despite the urgency after eight years of the Bush administration's do-nothing attitude, Senate Minority Leader Mitch McConnell (R-KY) has said that he and his fellow conservatives are in no rush to provide this important economic relief and plan to put the brakes to attempts to quickly pass a package. "I believe the taxpayers deserve to know a lot more about where it will be spent before we consider passing it," he said in a statement last week. According to the Washington Post, McConnell has also "called for a weeklong cooling off period between when the bill is drafted and when it is voted on, allowing time to dissect it for signs of 'fraud and waste.'" Conservatives have the power to filibuster the legislation if they oppose it. (McConnell, however, had no problem quickly passing President Bush's Wall Street bailout, even though that package had almost no oversight safeguards. In fact, he "led the battle" to pass the bill.) The real risk, according to many economists, is in doing too little. Krugman, for example, has said that he would like to see a "bigger" stimulus package -- as high as a trillion dollars. New York University Economics Professor Nouriel Roubini has explained that failure to enact a fiscal stimulus could actually result in wider deficits, which would send the country into a "very severe recession."

Comments

[OldLadyCitizen]

Those of you who think this bill should go through need to actually look at the bill. It wasn’t just republicans who voted against it, there were also 11 democrats. There are also over 300 economists that have placed full page ads in New York Times, Washington Post, and in other national publications to say that this bill is not the answer. This has nothing to do with what your political beliefs are. It has to do with what is in this bill and the future of our country. Do further research yourself and ask if the proposed spending makes sense that it will get people spending right now and create jobs? Will it stimulate people to buy houses? Is this going to get you spending more? Is it going to make businesses feel better about the future of the economy so that they will hire more people?

[ErrolSmythe]

Too much talk .
People are getting broke.
Banks got the money.
Not the poor folk
Where is the money?
Who got the cash ?
Things are no more funny
Who got the stash ?
Politicians need to see the plan
And lend out a helping hand
Wallstreet crashed long ago
Mainstreet needs cash flow
Mr. President
The stimulus plan
Ain't no plan
There's too much pork
And too much talk
Action is needed now
Taxes ain't no cash cow
People are broke
Help them Mr. President.
Let the Democrats
And Republicans
Come together
And think together
And draft a workable plan
To jump start
The economy.

[amiri1]

Today Senators were palcing into the Senate's version of Obama's stimulus a tax break for people who purchase cars-- after the GOP and Dems have been critical of Obama's well crafted stimulus package - they decide to add PORK? Makes a lot of sense? NO IT DOESN'T

HR1 is a fine piece of legislatur­e...actual­ly it is too comprehensive and well thought out unlike legislature the good ole boys have written as members of congress. Nothing they have sponsored is so precise, polished and written for the betterment of the workign class American people. Yes, they are so jealous and know it is great; therefore, small minds are trying to put their mark on it in hopes of claiming they were instrumental in its passage. Infantile Politics 101 is delaying Obama's plan.

[Erdgeist]

So far I have seen the Republican plan to be the following:

1) Tax breaks for the wealthy.

2) More offshoring and outsourcing.

3) Don't buy American.

4) Maintain a huge trade deficit.

[claylandg]

I guess giving money to ACORN will help the ecomony??? Sounds like a pay back to me

[Peter007]

There is no evidence that this economy needs a kick start or any stimulus. Those are meaningless words that politicians are feeding the public in an attempt to get their pork barrel bills through congress.
No one knows what stimulus means in economic terms. . People think of a patient in the hospital without a heart beat. You can't use that analogy. Maybe the patient has a cancer. Will kick starting the patient cure the cancer?
Economists don't have any evidence that a stimulus package ever worked to cure economic ills. Our economic ills were caused by an over extension of credit and too much spending.
Now the cure is for this problem is more over extending of credit and more spending on the government side of the equation.
It will do just as well as FDR's new deal plan worked. ( Not ).
Pay attention students. Read your history.

[ErrolSmythe]

i) Audit the banks and follow the money to trace how public funds from the original stimulus package have been spent.

ii) Revise and Review and Resolve how the proposed $800 + billions package may be spent and insist that all relevant details are made public.

iii) Invest in green energy projects.

iv) Offer tied soft loans to developing countries with underdeveloped natural resources with the proviso that up to 25% of the funds are used to source technical and logistical support from appropriate USA companies.

v) Offer tied soft loans to developing countries to develope their infrastructure such as roads, dams, buildings ,telecommunications ,electricity grid system etc with the proviso that up to 25% of the funds are used to source technical and logistical support from appropriate USA companies.

vi) Offer tax breaks to individuals and private and public companies for three months or more.

vii) Revise and Review and Resolve that Government involvement in market forces should have the basic minimum interference restricted to monitoring tax payments and health and safety provisions.

[PhilipTaylor]

This is a HISTORIC TRUNING POINT, a CRISIS POINT, and Obama must take advantage of it!

It is an opportunity for Obama and Americans to take back power from the Elite who control our Banking System and make a NEW America for all the people!

Big Wall Street Banks are Dinosaurs and must be simplified, regulated, automated, and downsized!

1. Put the FED under the control of the US government who sets its policies
2. Let them compete with Government Owned Basil II compliant Bank integrated with the FED
3. Declare all existing Credit Default Swaps NULL and VOID and regulate all new CDSs
4. Set up temporary market to trade Derivatives and find their market values
5. Force Off-Balance-Sheet items onto Balance Sheets and Banks with negative balances, liquidate
6. Create a windfall tax in a program comparable to the Reconstruction Finance Corporation of 1932.
7. Automate Government Bank to serve consumers and small business directly via Internet
8. Set up a new Home Owners' Loan Corporation to stop foreclosures and stabilize housing prices.
9. Set up a review system that all NEW products must move through insuring proper regulations and a method of trading.
10. Regulate all markets and Hedge Funds and enforce regulations.
11. Issue currency directly backed by the full faith and credit of the United States Treasury.

Even the ARTS are picking up on the significance of this Turning Point:
http://www.youtube.com/watch?v=dnT21hmlT4o

[amiri1]

The Republicans will be tossed out of the House in the next election cycle. Americans are suffering and need HELP asap. House reps are out of touch, and tone deaf. When it comes to helping the mortar of America, its people, they stall. When it came to greasing the palms of their lobbyist relationship corporate friends, they handed out the $$$$ with no strings attached.

Ain't that America?

[sueinmn]

Wow, the GOP didnt give a darn if we knew where the money went or how it was used when giving it to banks! But as always anything to do with helping the people of this country they put op road blocks everywhere. The GOP pretend to be for the people but their actions speak louder than words. I guess were just not the people they are for anyways. So why do we keep electing these false pretences into office? One must ask themselves!
Maybe more tax havens for offshore accounts and millions more jobs lost to overseas will make the people open their eyes a bit wider. We begin a new era but the same old will not work. This we know. The public may need to flood the offices with callers and remind senators who they work for. 8 years of bringing this country down, all road blocks need removing now.

[gascelebrations]

Am I the only one who gets a tickle everytime I read the phrase "stimulus package"?

[ErrolSmythe]

A six month or a one year tax holiday for all Americans will put money into the right pockets and help jump start market forces to get back into play. Too much Government intervention by taking over instiutions like houses and banks is bad for the economy. "....Competition is healthy...." .

President Obama should not rush into approving Nancy Pelosi's plan. Before he approves it he should take counsel from all quarters and listen to the wise.

A tax holiday will help.It will restore confidence in good governance.

[eze1]

we need to be putting money into getting rid of illegal immigrants, tracking and making sure those receive welfare benefits and unemployment are using valid informtion and are who they say they are.
I live in Alamance County NC and alot of places here are no longer hiring americans but illegal workers cause they will work cheaper and do not cause trouble. If we throw money out there to create jobs than we need to make sure hard working americans are getting the new jobs.

[Alberthigareda]

hahahaah hard working americans my ass. i am an american and i havent meet one hard working american yet. the reason why they hire my fellow mexicans and other races is because they work and dont complain about anything. if americans could do that then there would be no problems, but we always bitch about every little thing. plus americans mostly white americans dont wanna do the jobs these immigrants do because they think they are better or something. My grandfather i now a legal citizen of this country but he payed his dues and put up with all the bullshit they threw at him. deported 9 times but always came back. thats what americans lack in workforce and everything else and that is HEART!

[itsamedithing]

HEART!! something people in AMERICA have a great deal of. From the MEDICS, FIRE, POLICE, MILITARY, AND ALL THE OTHER JOBS PEOPLE GO TO EACH DAY AND RISK LIVES TO SERVE YOU. you can not sit there and say americans do not know hard work. what it is like to risk your life for another? to sit with a dying person and help them face death? i am american and come from a long line of hard working americans that are not the best paid, everything from taking care of elderly (and tell me thats not work) to cleaning toilets. for you to be an american and down talk another shows what kind of american standard you live to. i do not know if you have ever been to nc , but i can tell you the reason so many americans can not get jobs there is because there are so many immigrants that will work for less and live together to put their money together. officers, ems and other get paid more to speak spanish. if i go to mexico or anywhere else they do not care to know english just to help me out. if you think another place is so grand and the people are such hard workers go there. Until then I will take the American work ethic and thank GOD i live in a place where people are willing to die to live in and not escape from.

[tompoe]

What makes the Party of Corporate Welfare think folks like me don't put McConnell's quote, ""I believe the taxpayers deserve to know a lot more about where it will be spent before we consider passing it," he said in a statement last week. According to the Washington Post, McConnell has also "called for a weeklong cooling off period between when the bill is drafted and when it is voted on, allowing time to dissect it for signs of 'fraud and waste.'" on our walls, as a reminder when the next election is held? The world is all but in the next Great Depression as a direct result of the Party of Corporate Welfare's free market ideology, and they expect anyone to listen to them?

[busternbaby]

How can a tax cut help the older people who are on SS because they don't have to file when they are retired..We need Obama to send out checks to help people pay their bills and try to catch up..I thought before he was elected he said he was giving checks to help now he isn't..What is up with that???

[sueinmn]

He never promised personal checks. He promised stimulus in ways off jobs, unemployment extensions, many people believed he meant checks again but people did not follow this close enough.