The outlook is grim and the solution is costly. President-elect Barack Obama didn’t have much in the way of positive news to give on the American economy in his recent speech at George Mason University. “In short, a bad situation could become dramatically worse,” he said as he outlined the numbers on unemployment, falling revenues and the mind-boggling national deficit.
However, the future president was not without hope. “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,” Obama said. That dramatic action comes with a $ 775 billion price tag.
Obama’s stimulus package would include an oversight structure known as the Economic Recovery Accountability and Transparency Board, which would track how the federal government spends the money. There would also be a website that would outline his plan and allow the public to track the money and the progress of the plan.
According to Obama’s speech, his proposal would be called the American Recovery and Reinvestment Act. Although his speech did not give great detail about his plan, some of the spending would be roughly broken down like this:
300 billion in tax cuts, both for individuals and businesses. According to Obama, 95% of middle-class, working families will receive $ 1000 tax cut.
$ 77 billion to extend unemployment benefits, including subsiding health care for those without jobs.
$ 398 billion in job-creation projects, such as rebuilding roads and bridges and expanding alternative energy programs. Obama promises to create 3 million jobs over the next few years in the areas of infrastructure, energy, health care and education. “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,” Obama said in his speech.
Not included in this project, but on Obama’s list of problems to tackle are the growing number of foreclosures, shoring up financial intuitions from future failure, and rewriting financial regulations to ensure better accountability. The number of problems facing the nation are daunting, but Obama’s speech indicated his willingness to get right to work.
The most difficult part of Obama’s economic recovery plan will be gaining bipartisan support and getting the bill passed. Until Obama has political support, his plan will go nowhere and help no one. He has also promised to eliminate pet projects and other government spending that is difficult to track, but makes the bill more appealing to some politicians. Perhaps that is why he included these words in his speech, “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.”
There is little doubt that Congress will pass some sort of stimulus plan in the near future. How much of Obama’s proposals make it into a final bill and how effective the stimulus package will be is going to be the story of 2009.