"American Recovery and Reinvestment Plan" What it Really Means 0 comments

As reported by The Huffington Post and The Progress Report: 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."

American Recovery and Reinvestment Plan 0 comments

The Washington Post reports: President Obama pressed aggressively for his massive economic recovery plan yesterday, laying out the most detailed benchmarks to date of a stimulus package that would cost at least $820 billion and warning that the nation's economy could become dramatically worse without major federal investment.

With Congress preparing to take up the stimulus bill this week, Obama described what he would do with a recovery package aimed at saving or creating as many as 4 million jobs. The White House outlined proposals designed to appeal to Republicans who have resisted the scale of federal spending, as well as to average taxpayers, many hit hard by the recession, who have not felt the benefit of earlier government bailouts.

In his first weekly presidential radio and video address, Obama said his American Recovery and Reinvestment Plan is critical to jump-starting the economy, which lost 2.6 million jobs last year. The plan, he said, would protect workers from losing health-care coverage; modernize public schools, roads and sewer systems; lower energy costs and taxes; and make college more affordable.

This week, the new administration will step up its lobbying efforts to ensure that Obama's signature legislation passes Congress by mid-February. The president, who met with his chief economic advisers yesterday, plans to visit Capitol Hill on Tuesday to court Republican leaders, and top administration officials will fan out on today's political talk shows to press their case.

"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four," Obama said yesterday. "And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future.

"In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."

Some congressional Republicans remain opposed to his plan, saying it includes too many spending programs that may not provide immediate economic relief and arguing that the roughly $225 billion in tax breaks in the Democrats' package is not enough. Obama wants to cut taxes by $1,000 for 95 percent of workers and their families.

"Unfortunately, the trillion-dollar spending plan authored by congressional Democrats is chock full of government programs and projects, most of which won't provide immediate relief to our ailing economy," House Republican Leader John A. Boehner (Ohio) said yesterday in his party's response address.

Boehner spokeswoman Antonia Ferrier described the White House proposal as "just another unfocused, runaway bill loaded with slow and wasteful Washington spending on every conceivable goal."

Boehner criticized some spending proposals in the House Democratic plan, including $6 billion for colleges and universities, many of which have large endowments, and $50 million for the National Endowment for the Arts. "All told, the plan would spend a whopping $275,000 in taxpayer dollars for every new job it aims to create, saddling each and every household with $6,700 in additional debt," he said.

The White House released a four-page report yesterday outlining spending priorities and accountability measures for the recovery package. Obama wants to double renewable energy capacity within three years, creating enough additional capacity to power 6 million homes, and he plans to leverage $100 billion to finance private-sector clean-energy initiatives.

His plan also calls for an expansion of the child tax credit, which would provide a new tax cut to the families of more than 6 million children and increase the existing credit for the families of more than 10 million children. More HERE

President-elect Barack Obama on His American Recovery and Reinvestment Plan 0 comments

Remarks of President-Elect Barack Obama
As Prepared for Delivery
Thursday, Jan. 8, 2009

Throughout America's history, there have been some years that simply rolled into the next without much notice or fanfare. Then there are the years that come along once in a generation—the kind that mark a clean break from a troubled past, and set a new course for our nation.

This is one of those years.

We start 2009 in the midst of a crisis unlike any we have seen in our lifetime—a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.

I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.

In short, a bad situation could become dramatically worse.

This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won't get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, D.C. For years, too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn't afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.

Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence. We can restore opportunity and prosperity. We should never forget that our workers are still more productive than any on Earth. Our universities are still the envy of the world. We are still home to the most brilliant minds, the most creative entrepreneurs, and the most advanced technology and innovation that history has ever known. And we are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again.

That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.

It's a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it—and this change must begin in Washington. It is time to trade old habits for a new spirit of responsibility. It is time to finally change the ways of Washington so that we can set a new and better course for America.

There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy. It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy—where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.

That is why we need to act boldly and act now to reverse these cycles. That's why we need to put money in the pockets of the American people, create new jobs, and invest in our future. That's why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.

That work begins with this plan—a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It's a plan that recognizes both the paradox and the promise of this moment—the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That's why we'll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That's why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.

To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75 percent of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can't be outsourced—jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.

To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America's medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won't save billions of dollars and thousands of jobs—it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.

To give our children the chance to live out their dreams in a world that's never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We'll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.

To build an economy that can lead this future, we will begin to rebuild America. Yes, we'll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we'll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.

Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95 percent of working families will receive a $1,000 tax cut—the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can't find new ones, we'll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we'll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.

I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven't yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That's why the American Recovery and Reinvestment Plan won't just throw money at our problems—we'll invest in what works. The true test of the policies we'll pursue won't be whether they're Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.

Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children's future than it is right now.

We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don't have confidence that we're getting our fiscal house in order. That's why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.

That also means an economic recovery plan that is free from earmarks and pet projects. I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations. This must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests.

Now, this recovery plan alone will not solve all the problems that led us into this crisis. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.

No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.

It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

That is not the country I know, and it is not a future I will accept as President of the United States. A world that depends on the strength of our economy is now watching and waiting for America to lead once more. And that is what we will do.

It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better. But that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.

That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded. That's why I'm asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed in the next few weeks. That's why I'm calling on all Americans—Democrats and Republicans—to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn't "What's good for me?" but "What's good for the country my children will inherit?"

More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself. And if we do—if we are able to summon that spirit again; if are able to look out for one another, and listen to one another, and do our part for our nation and for posterity, then I have no doubt that years from now, we will look back on 2009 as one of those years that marked another new and hopeful beginning for the United States of America. Thank you, God Bless You, and may God Bless America.

President-elect Barack Obama's radio address on American Recovery and Reinvestment Plan 0 comments

The following is a transcript of President-elect Barack Obama's radio address:

PRESIDENT-ELECT OBAMA:

As the holiday season comes to end, we are thankful for family and friends and all the blessings that make life worth living. But as we mark the beginning of a new year, we also know that America faces great and growing challenges - challenges that threaten our nations economy and our dreams for the future.

Nearly 2 million Americans have lost their jobs this past year - and millions more are working harder in jobs that pay less and come with fewer benefits. For too many families, this new year brings new unease and uncertainty as bills pile up, debts continue to mount and parents worry that their children wont have the same opportunities they had.

However we got here, the problems we face today are not Democratic problems or Republican problems. The dreams of putting a child through college, or staying in your home, or retiring with dignity and security know no boundaries of party or ideology.

These are Americas problems, and we must come together as Americans to meet them with the urgency this moment demands. Economists from across the political spectrum agree that if we don't act swiftly and boldly, we could see a much deeper economic downturn that could lead to double digit unemployment and the American Dream slipping further and further out of reach.

That's why we need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term. And this plan must be designed in a new way - we cant just fall into the old Washington habit of throwing money at the problem.

We must make strategic investments that will serve as a down payment on our long-term economic future. We must demand vigorous oversight and strict accountability for achieving results. And we must restore fiscal responsibility and make the tough choices so that as the economy recovers, the deficit starts to come down. That is how we will achieve the number one goal of my plan - which is to create 3 million new jobs, more than 80 percent of them in the private sector.

To put people back to work today and reduce our dependence on foreign oil tomorrow, we will double renewable energy production and renovate public buildings to make them more energy efficient.

To build a 21st century economy, we must engage contractors across the nation to create jobs rebuilding our crumbling roads, bridges, and schools.

To save not only jobs, but money and lives, we will update and computerize our health care system to cut red tape, prevent medical mistakes, and help reduce health care costs by billions of dollars each year.

To make America, and our children, a success in this new global economy, we will build 21st century classrooms, labs, and libraries.

And to put more money into the pockets of hardworking families, we will provide direct tax relief to 95 percent of American workers.

I look forward to meeting next week in Washington with leaders from both parties to discuss this plan. I am optimistic that if we come together to seek solutions that advance not the interests of any party, or the agenda of any one group, but the aspirations of all Americans, then we will meet the challenges of our time just as previous generations have met the challenges of theirs.

There is no reason we can't do this. We are a people of boundless industry and ingenuity. We are innovators and entrepreneurs and have the most dedicated and productive workers in the world. And we have always triumphed in moments of trial by drawing on that great American spirit - that perseverance, determination and unyielding commitment to opportunity on which our nation was founded.

In this new year, let us resolve to do so once more. Thank you.

Barack Obama’s stimulus plan — the biggest special spending bill in history 0 comments

Mike Allen of Politico.com reports: President-elect Barack Obama’s record-setting stimulus plan — the biggest special spending bill in history — is getting such astonishingly quick treatment from House Democrats that officials say it could go from draft to final passage in one week.

The bill has no text or details yet, but it does have a name: Obama revealed Saturday in his YouTube/radio address that it will be called the “American Recovery and Reinvestment Plan.”

When asked about the title, Frank Luntz, a Republican consultant who wrote a treatise on political linguistics called “Words That Work,” told Politico: “Obama's team are the best linguists I've ever seen. Republicans aren't in his league right now."

“Recovery says putting the country back on track, and reinvestment is the next step up from investment,” Luntz explained.

The 111th Congress begins Tuesday with the swearing-in of new members. The stimulus plan — with a price tag of up to $850 billion — is likely to be ready for a vote the following week, officials said.

No draft or outline or outline was circulating this weekend, but House Democratic officials said they hope to have one by early next week.

“We are hoping for a House vote on Week 2 (week of Jan. 12),” a House official said. “It could slip if we decide to hold regular approps hearings. But I think a vote is likely the week of Jan. 12.” More HERE

American Recovery and Reinvestment Plan 0 comments

“We need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term,” he says. “And this plan must be designed in a new way—we can’t just fall into the old Washington habit of throwing money at the problem. We must make strategic investments that will serve as a down payment on our long-term economic future. We must demand vigorous oversight and strict accountability for achieving results. And we must restore fiscal responsibility and make the tough choices so that as the economy recovers, the deficit starts to come down. That is how we will achieve the number one goal of my plan—which is to create three million new jobs, more than eighty percent of them in the private sector.”

Watch the full address or read the text below.

The blog, Open Congress is actively following this story and reports: Here are the five things he says the stimulus will do:

* double renewable energy production and renovate public buildings to make them more energy efficient;

* engage contractors across the nation to create jobs rebuilding our crumbling roads, bridges, and schools;

* update and computerize our health care system to cut red tape, prevent medical mistakes, and help reduce health care costs by billions of dollars each year;

* build 21st century classrooms, labs, and libraries;

* provide direct tax relief to 95 percent of American workers.

Also covering the topic is Where's The Outrage.