Is The Recovery Act Really Helping?

By Celia Canon- Talk Radio News Service

Secretary of the Treasury Timothy Geithner

Treasury Secretary Timothy Geithner testified on the financial situation and on the American Recovery and Reinvestment Act today.

Geithner said that “There are important indications that our financial system is starting to heal.”

Signs that we are on the right path include ”New securities issuance has started to revive, Spreads for AAA credit card receivables asset-backed securities (ABS) have fallen about 330 basis points from there peak. There has been more issuance of consumer ABS in the past two months than in the preceding five moths combines,” said Geithner.
loans of similar types, duration and interest rates.”

Starting with the subprime mortgage crisis in 2007, “Unexpected losses experienced by major banks on mortgage-back securities set off a vicious cycle” as Geithner describes.

As a result, the government implemented the American Recovery and Reinvestment Act (ARRA) in February 17, 2009.

The act provides transparency and accountability so that taxpayers know where every dollar is going. Additionally, the ARRA “is giving 95% of working Americans a tax cut, creating or saving 3.5 million jobs, providing nearly 4 million students with a new higher education tax and helping 1.4 million Americans purchase their first home by providing $6.5 in tax credits,” said Geithner.

In terms of lending, which was significantly cut as banks lost their capital, Geithner said “The recovery program included any substantive increasing guarantees and a reduction in fees for small businesses lending programs, and we’ve seen lending under those programs increase 25% since the Recovery Act was passed.”

Sen. Christopher Dodd (D-Conn.), Chairman of the Senate Banking Committee, mitigated these arguments by saying, “I think the picture remains mixed after losing some 5.1 million jobs since the recession began.”

Geithner concurred, and added “In many parts of the country, many people don’t feel it’s getting better yet, they don’t really feel that the availability of credit is improving.”

“Treasury is continuing to look into additional metrics that gauge the markets more broadly, as well as additional economic metrics, to determine the effectiveness of the current strategy and whether additional or different steps are needed,” Geithner said.

The U.S. on the rail to success

by Christina Lovato, University of New Mexico-Talk Radio News Service

“In the years I’ve been with the FRA [Federal Railroad Administration], I never thought I’d see the day when a strong and decisive commitment would be made on behalf of Amtrak,” said Jo Strang, the Acting Federal Railroad Administrator at a press conference where Vice President Joe Biden and members of Congress announced that Amtrak would be receiving $1.3 billion in grant funding from the American Recovery and Reinvestment Act of 2009 to expand rail capacity.

Vice President Joe Biden who has been a passenger on Amtrak for over 7,000 round trips said that Amtrak has been neglected in funding. “Amtrak relies on some subsidies. Every, every, every, every passenger rail system in the world relies on subsidies. We subsidize our highways and airports more than we subsidize Amtrak....Amtrak has been left out much too long in my humble opinion,” he stated. Biden also expressed that the $1.3 billion will nearly double Amtrak’s investment program over the next two years. “It is work that will take care of critical, long neglected needs. It will put people to work immediately and it’s an investment of dollars that will not only create jobs now but yield benefits for our economy for years to come. It will begin to build a platform for the economy in the 21st century.”

Amtrak depends on American tax funds and employs more than 19,000 Americans. 500,000 Americans use Amtrak a week, which amounts to 80,000 passengers a day. In the fiscal year of 2008 Amtrak set a record by transporting 28.7 million people, the most in Amtrak’s history.

Senator John Kerry (D-Mass.) who attended the conference said “We lose about 4.2 billion hours a year to congestion on our roads....We lose close to 3 billion gallons of gasoline, just people sitting there going nowhere in congestion.” Kerry said that this money will help not only Amtrak but it will help better the environment as well. “It’s going to make America more productive. It’s going to make us more environmentally friendly, it’s going to increase the productivity, it’s going to create jobs, and it’s going to create a sustainable economy,” he concluded.

Some of the funding will go towards the replacement of the movable bridge over the Niantic River on the northeast corridor in Connecticut, for repairing damaged passenger cars, repairs to Amtrak facilities nationwide, and construction of a new station for the auto train in Sanford, Florida.

Hoyer criticizes Republicans at pen and pad session

House Majority Leader Steny H. Hoyer (D-Md.) stated that he testified today for full voting rights status for the District of Columbia and said they are going to ask the Supreme Court to fast track it or get it signed by President Obama or ask if it needs to be a consitutional amendment.

Leader Hoyer also had comments about the American Recovery and Reinvestment Act of 2009. He said that some have criticized the bill as not enough but twice as much as discretionary spending last year. Asked if it was large enough, Leader Hoyer said "Not sure, you can hear many different opinions."

There will be no earmarks on this bill and when asked about bipartisanship, Leader Hoyer said "Being bi-partisan does not mean lying on the floor and doing whatever they want. The Republicans have taken a political stance against the bill."

Hoyer noted that despite the fact that President Obama was meeting with the Republicans they have told their members to vote against it. He also stated that the Republicans have run up our debt to a weak economy.

He concluded the pad and pen noting that with the bill would come good things. It would bring an increase in science & technology research, pell grants and school modernization. They want to make IDA money more transparent to the American public and offer COBRA subsidies.