Neil's Spotlight A comprehensive approach to economic recovery
March 5, 2009
President Obama has a four-part plan to stabilize our economy and get it growing again.
The plan involves:
American Recovery and Reinvestment Act – will create 3.5 million jobs and lower taxes for 95 percent of American workers.
Financial Stabilization Plan – will get credit flowing to businesses and individuals again, and restructure the American auto industry. Last week, the Administration took an important step forward in providing banks with the capital and confidence they need to increase or maintain lending, even if the economy gets worse before it gets better. Now, we are taking another step to restore confidence -- the Consumer and Business Lending Initiative, also known as the TALF, the Term Asset-Backed Securities Loan Facility. Under this program, Secretary Geithner and Federal Reserve Chairman Ben Bernanke will use authority already granted by Congress to unlock our frozen secondary lending markets and restart the flow of credit to the American people. It’s a step that has the potential to generate $1 trillion worth of lending; igniting borrowing and spending across our economy. This program is not about rewarding banks that have acted irresponsibly; it’s about helping Americans get the loans they need.
Comprehensive Housing Plan – will help stem foreclosures, keep families in their homes, and stop the plunge in home values for all homeowners.
Wall Street/Consumer Lending Reform – Chairman Frank will be announcing a series of hearings to develop legislation that will bring common sense rules and oversight to a financial system that spun out of control.
The President’s Budget—A Blueprint for the Future
Inheriting a fiscal mess: President Obama inherited a mess – the result of mistaken policies, misplaced priorities, and an era of profound irresponsibility. For too long, Republican leadership in Washington increased spending and cut taxes for the rich during a time of war. They ignored the tough choices and failed to address the big challenges our economy faces. Former President Bush took a $5.6 trillion surplus and left trillions of dollars in deficits – making it more difficult to address the economic crisis his policies created.
Ending an era of irresonsibility: We can no longer avoid addressing the fiscal challenges we face. We will go through the budget line by line, making tough choices to bring our deficit down, spending wisely to grow our economy, and making sure that no corner of the budget escapes reform.
Honest accounting: The President’s 10-year budget blueprint restores honesty and rejects the gimmicks used by previous administrations by:
Providing a projected cost for the wars in Iraq and Afghanistan—never before part of the budget;
Assuming the full cost of fixing the Alternative Minimum Tax each year so it doesn’t hit the middle class;
Not assuming that Medicare physician payments will be deeply cut, when each year Congress blocks these planned cuts;
Recognizing the statistical likelihood of natural disasters instead of assuming there will be none over the next decade;
Providing a 10-year rather than 5-year look at our fiscal situation.
Tax cuts for 95 percent of American workers: The budget restores balance to the tax system, cutting taxes for the middle class by:
Making permanent the President’s new $800 Making Work Pay tax cut for 95% of America’s working families;
Expanding the Child Tax Credit;
Making permanent the President’s new $2,500 American Opportunity Tax Credit to help students afford college;
Not increasing taxes for families making less than a quarter million dollars a year;
Funding health care reform by allowing tax cuts for the wealthy to expire;
Helping small businesses and innovative companies grow, with a capital gains tax break and making permanent the research and experimentation tax credit.
Critical investments in the future: The President’s budget will:
CLEAN ENERGY -- Reduce our dependence on foreign oil and help us grow a clean energy economy by instituting a system to bring down greenhouse gas emissions and use the revenues to invest in renewable and alternative sources of energy like wind and solar so that the jobs of tomorrow are created in this country -- and we will provide additional funding to help businesses and families transition to a clean energy economy.
HEALTH CARE -- The President’s budget puts aside more than $630 billion over the next 10 years to reform health care, reduces Medicare overpayments to private insurers, and reduces drug prices. By tackling this issue, we can rein in the high costs that are a drag on the entire economy.
EDUCATION -- Expand the promise of education in America through investments that will ensure our students can compete in a 21st century economy. The budget doubles Early Head Start funding, expands Pell Grants, and triples the number of graduate fellowships in science.
INFRASTRUCTURE – Make an historic commitment to rebuilding America, creating a National Infrastructure Bank, making a national commitment to high-speed rail, enhancing security to over 90 major ports, investing in clean and safe drinking water, expanding broadband to spur business, education, and health in rural areas, and invest in the science with a 16% increase over 2008 funding levels.
NATIONAL SECURITY/VETERANS – Fully support our troops by increasing the size of the Army and Marine Corps, increasing pay for troops, improving mental health care for troops and veterans, and saving money by reforming DOD acquisition. Increase Veterans Affairs funding by $25 billion over the next five years.
