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White House Wants Billions for the Economy -- But Don't Call It a Stimulus

1 year ago
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With a majority of Americans critical of the president's handling of the economy, most of the public disapproving of the direction in which the country is headed, and looming midterm elections that threaten to be a bloodbath for Democrats, the White House is under extreme pressure to do more to get the ailing national economy back on its feet.

So this week, the Obama administration unveils three measures aimed at jump-starting job creation and helping businesses -- or at least blunting criticism that the president has not done enough and that his course of action has been the wrong one. Although the proposals cost an estimated $50 billion, $100 billion and $200 billion respectively, the White House isn't calling the proposed legislation a "stimulus." On Tuesday, White House Press Secretary Robert Gibbs tamped down any comparisons with the $787 billion Recovery Act package, saying he did not "think this is anywhere near the level" of the 2009 stimulus.

Given the strong GOP resistance to any new government spending -- especially in a tight congressional calendar before the elections -- whether the legislation stands a chance remains very much in the air. Even seemingly noncontroversial spending measures such as the extension of unemployment benefits has faced stiff and prolonged resistance in Congress.

In fact, the greatest gain for the White House and the Democrats may be one of pure optics, namely that the president is trying to bolster the economy but Republicans are standing in the way. Whether the gambit is successful will in large part rest with the GOP response.

The first measure -- announced by President Obama on Monday at a labor event in Milwaukee -- calls for $50 billion in government spending to improve the nation's infrastructure, including repairing 150,000 miles of roads, maintaining 4,000 miles of railways and 150 miles of runways, as well as advancing what the president called "a next-generation air-traffic control system to reduce travel time and delays."

To pay for the projects, Obama proposes an "infrastructure bank" funded by both private investment and tax dollars. According to the New York Times, Obama championed the concept when he was still a senator and it has lately gained wider support inside policy making circles. The president said the bill would "not only create jobs immediately" but would also "make our economy hum over the long haul," though he declined to give specific numbers on the estimated jobs created or cite the full cost of the program.

A second program, which the president is set to announce in Cleveland on Wednesday as part of a broader economic plan, calls for $100 billion in research and development tax credits for businesses. The measure would increase and permanently extend these tax credits which have, for the last 30 years, been renewed only on a temporary basis -- leading to frustration on the part of many business owners.

A third measure would give businesses tax write offs for the full value of new equipment purchases through 2011, with a goal of increasing demand for goods and creating jobs. The White House estimated that such a move would cost $200 billion in revenues over the next two years, but that the ultimate net loss would be $30 billion over 10 years.

Given the stormy outlook in Washington these days, it's unclear what the future holds for the administration's not-quite-a-stimulus stimulus. "We're in a political season, we get that," Gibbs said. "This is not simply something that the president's proposing to get us somehow through the next several weeks of how we get our economy from how it is to where we want it to be. The president is focused on the problems that the American people have, the economic situation that we all find ourselves in. It may or may not overlap well with a political calendar."

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38 Comments

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john

We need more stimulas after tarp,auto bailout,cash for klunkers home loans appliances electric cars solar wind power. It would then mean non of his trillion dollar spending worked at all.. If more is good why not another trillion.Or are the democrats only about elections and not really interested in the middle class and the security of the american worker?

September 08 2010 at 1:04 PM Report abuse +12 rate up rate down Reply
sfamilyent

I'm OK with infrastructure actions, but these actions are not addressing the real problem - and that is that we have allowed our manufacturing and production sector to decline as other countries have adopted export based economic growth policies targeting US consumers to fund their growth, while restricting access to their markets and subsidizing their domestic production. Our businesses have located facilities in these countries to boost profits, while our production capacity, jobs, and standard of living are left to decline. Balance the trade playing field and encourage domestic production of goods and services for domestic consumption.

September 08 2010 at 11:48 AM Report abuse rate up rate down Reply
aebuicsox

Republicans Vs Socialists: What is the difference? A socialist has the utopian notion of equality, spread the wealth and yes, a leaning towards social programs. A Republican does believe in spreading the wealth as long as the margerine begins getting spread above $200,000.00. A Republican does believe in social programs as long as they can allow American industry to spread the wealth in China or Viet Nam at wages that are pennies on the dollar vs American workers. While we continue to read polls about the current President and we decide Republican vs Democrat please think back to 2008 when George Bush and John McCain said that American econominc fundamentals are sound, and then moments later the American banking industry collapsed leaving Bush looking white as a ghost and the freight obvious. Again, when leaning Republican ask yourself this, how many times do you need to be clubbed on the head before you come to your senses?

September 08 2010 at 9:01 AM Report abuse -17 rate up rate down Reply
anita

Michael, those folks you give jobs to, pay some of it back as income taxes, and sales taxes, and real estate taxes, etc.. But, the majority of the money that they are paid, will pay rent or mortgage, food, clothing, etc.., paying part of the wages of clerks, bank tellers, etc.. Some of those taxes, will go towards police, firefighters, teachers, etc.. That is how our system works. The hard part right now is getting the funds into the hands of the working class who will spend it! The rich are not worried about starting new jobs right now. They have their money stocked away, and are not concerned about the working class. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation's total income; by 2007, the top 1 percent took in 23.5 percent of total income. Please think about that. GOD BLESS AMERICA!

September 07 2010 at 10:19 PM Report abuse -21 rate up rate down Reply
Michael

What has happened to the "shovel-ready" jobs we were promised 20 months ago as a justification for the $843 billion stimulus that was supposed to have us on the road to recovery months ago? This is deja vu tax-spend-demagogue-repeat Democrat nonsense. If you claim to know what's wrong with the economy, make it work. If, as it seems, you are clueless: step aside.

September 07 2010 at 9:41 PM Report abuse +24 rate up rate down Reply
1 reply to Michael's comment
muffin83e

No one can explain where the $843 Billion went. This despite Sen. Levin and other Dem's assurances there would be a strict accounting. The only obvious thing is the "shovel ready" jobs never appeared and the money was gobbled up. Now Obama wants more stimulus for more of the same. Fool me once; shame on you. Fool me twice, no you won't.

September 08 2010 at 11:27 AM Report abuse +12 rate up rate down Reply
grrywalk

How about calling it "political payoff".

September 07 2010 at 8:47 PM Report abuse +21 rate up rate down Reply
anita

It is very simple. People get paid to build/repair roads and bridges. These people then spend that money on food, clothing, shelter, etc. This in turn, provides jobs...income...to other folks to spend money on food, clothing, shelter, etc. That is how the system should work. When you give money to the middle/working class, most of it is spent quickly. When you give money to the rich, much of it is saved, or invested often, overseas. This is why "trickle down" economics that the Republicans keep pushing fails to work. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation's total income; by 2007, the top 1 percent took in 23.5 percent of total income. Please think about that. GOD BLESS AMERICA!

September 07 2010 at 8:36 PM Report abuse -24 rate up rate down Reply
1 reply to anita's comment
Michael

"Trickle-down" economy Democrat style holds that if you hire enough $100,000 Federal bureaucrats, the $50,000 taxpaying citizens will get rich paying the taxes to support the Feds. I do not see how the math works.

September 07 2010 at 9:44 PM Report abuse +22 rate up rate down Reply
lpb691

I grew up in the Great Depression years. FDR started the Works Progress Administration (WPA) which provided jobs for hundreds of thousands in the National Parks and other federal endeavors. The facilities they built are still being used today. We also had the Civilian Conservation Corps for young men who learned trades, worked developing state parks, etc. and eventually got back on their feet. The modest wages these men made gave them the power to provide food and shelter for their families, which in turn provided more jobs. Eisenhower provided jobs for returning veterans of WWII in building the interstate highway system. Isn't it time to give Obama's proposal to build roads, rails and runways some support when history proves this kind of government program has the potential to get us back on the right track?

September 07 2010 at 7:55 PM Report abuse -22 rate up rate down Reply
Al P.

Those that don't like Obama's idea of spending to stimulate the economy just think about what President Bush thought was a good idea. Don't you remember him signing off on the TARP funds for the bank bailouts. No one said that was a bad idea, how come now that Obama is trying to dig us out of the hole Bush caused it's no good ? What are the ideas of the Party of NO ? Give more tax cuts to the wealthy. Now you want more of those ideas that really paid off didn't they ? That's what got us into this mess in the first place and now you want to vote Party of NO again ? You know what ? Go ahead and see where that gets you. People have short memories ! If only you were informed with the FACTS this country would be a better place.

September 07 2010 at 7:29 PM Report abuse -31 rate up rate down Reply
1 reply to Al P.'s comment
anita

Alfred, great post sir! GOD BLESS AMERICA!

September 07 2010 at 8:53 PM Report abuse -20 rate up rate down Reply
Rob & Kathy

Calling it a different name doesn't change what it is...

September 07 2010 at 7:08 PM Report abuse +31 rate up rate down Reply

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