Vilsack Touts Recovery Act Before Budget Committee

By Phillip Bunnell - Talk Radio News Service

Secretary of Agriculture Thomas J. Vilsack told the House Budget Committee that the American Recovery and Reinvestment Act is helping the United States Department of Agriculture (USDA) make strides in creating jobs and modernizing American agriculture.

Chair John Spratt, Jr. (D-SC) and Ranking Member Paul Ryan (R-WI) opened with contrasting messages concerning the Recovery Act. Spratt touted it as saving America from a far worse economic downturn and saving millions of jobs. 

Ryan called the act “a failure,” blaming it for increased national debt. 

“Proponents will tell us that we should all be grateful that the pain is not more acute, and that it’s not fair to hold policy makers accountable for the failures of their policies,” he said.

Secretary Vilsack emphasized that the Recovery Act “is doing good,” and was “a must,” saying that the “stimulus is successful.”  Vilsack said that the increased funding for Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp program) produced $9.50 for every $5.00 invested by the USDA, and that the Recovery Act has allowed for expanded agricultural trade with Panama, South Korea, and Columbia.  Vilsack also said rural communities are receiving subsidies, water treatment facilities, and broadband Internet service, all of which help modernize and support the American farmer, are reaping the benefits of the extra funding.

Vilsack credited the Recovery Act for the recent growth in GDP, and countered Republican criticism of the high unemployment rate by stating that the stimulus had created “a sense of opportunity,” and that it had saved “millions of jobs.”

Stimulus Package Wasn't Meant To Act As Magic Wand Says Sec. Salazar

By Aaron Richardson - Talk Radio News Service

The stimulus package is working but it will take time for America to see positive results, said Secretary of the Interior Ken Salazar during testimony before the House Budget Committee on Friday. Salazar was joined at the hearing by Secretary of Agriculture Thomas Vilsack and Secretary of Transportation Ray Lahood.

“This was a program that was supposed to work over time, it was not supposed to essentially be a magic wand that from one day to another would take the economy out of a deep ditch, which it had gotten into,” said Salazar.

Rep. Paul Ryan (R-Wis.) said he is worried that the stimulus package may not work the way it was designed to.

“Even though the stimulus is possibly, maybe starting to kick in, right around the corner at the end of next year massive tax increases are already coming into law. We think that the fiscal policy coming out of Congress just candidly is the wrong fiscal policy,” said Ryan.

Vilsack argued that the stimulus package will eventually produce positive, tangible results that Americans will notice.

“The recovery act is working. It is transitioning America from bad times to better times and getting the work accomplished around the nation that Americans want done,” he professed.

Fed Chairman Bernanke Advises Fiscal Balance To Turn Recession Around

By Annie Berman -- Talk Radio News Service

Federal Reserve Chairman Benjamin Bernanke testified before the House Budget Committee today concerning the current economic recession and warned that the retirement of the baby boomers and an increase in medical and entitlement costs makes it more difficult for the economy to be restored.

In his opening statement, Bernanke said that “Our expectation is that we will begin to see growth in the economy, so, at the end of the technical recession later this year. Underlying that prediction is some stablization in final demand, including consumer spending.”

Though there is hope that we will begin to see our economy turn around, Bernanke stated that unemployment rates will continue to rise into next year.

The American Recovery and Reinvestment Act (ARRA) was enacted by Congress and signed into law by President Obama in February 2009. This act is intended to provide stimulus to the US economy and is worth $787 billion. It includes federal tax relief, unemployment benefits, and domestic spending on education, health care, and energy.

Bernanke said, “by the end of 2010, the stimulus package (ARRA) could boost the level of real GDP between about 1 percent and a little more than 3 percent and the level of employment between roughly 1 million and 3-1/2 million jobs.”

Recently, the credit markets have also taken a downturn, one of the worst since the Great Depression. When Bernanke was asked by the committee how long it would take for additional credit to be made available to consumers and small businesses he said that though this group rely heavily on bank loans, banks have been reluctant to extend credit because they are concerned about their own financial positions.

“We’ve heard complaints that bank examiners from the Fed and other agencies are too prone from preventing banks from making loans, in the interest of safety and soundness... Making loans to credit worthy borrowers, maintaining credit relationships, is profitable, for banks and therefore good for banks,” Bernanke said.

To avoid the another recession as large as this one, Bernanke stated that there needs to be a stronger oversight of large firms, resolution regimes to help resolve failing firms, and to strengthen the financial infrastructure.