Obama Proposes New Economic Recovery Measures

By Ravi Bhatia – Talk Radio News Service

President Barack Obama discussed his administration’s plans to continue accelerating economic recovery Tuesday at the Brookings Institute in Washington, D.C. Obama suggested that growth will occur through tax cuts and incentives for small businesses, continued investment in American infrastructure, and job creations through clean energy investments.

The measures, at least in part, would be funded by money saved from the Troubled Asset Relief Program, a program which allowed the U.S. government to purchase assets and equity from troubled financial institutions in order to trigger economic growth after the financial collapse. Administration officials say TARP cost about $200 billion less than expected.

“We are going to wind down [TARP],” Obama said. “There has never been a less loved or more necessary program. It was flawed… but today has served its original purpose and at a much lower cost.”

["This] gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street,” Obama added.

However, senior administration officials noted that the administration has not determined the minimum costs of the proposed programs, and at a press conference this morning, House Minority Leader John Boehner (R-Ohio) said Obama’s announcement indicates a “Stimulus 2,” being paid for with TARP money that Boehner says, “was to go to the deficit.” Boehner said the idea of spending money that was intended to be in excess, is “repulsive.”

Obama said that the programs would eliminate a tax on capital gains from new investments in small business stock for one year and expand on the 75 percent exclusion in the Recovery Act. The small business measures would also create a tax cut for small businesses to encourage new hiring next year, and would continue giving companies enhanced expensing provisions through 2010, allowing them to instantly expense up to $250,000 of qualified investments.

Besides investments in bridges, roads and infrastructure, the new economic programs could provide new incentives for consumers who invest in energy efficient retrofits for their homes.

Following the President's speech, top Economic Adviser Christina Romer and Labor Secretary Hilda Solis told reporters during a conference call briefing that the measures align with the administration's continuing plans to end the recession.

“This really is an evolution,” Romer said. “We had done important actions early in the administration to heal the economy...the Financial Stability Plan, the Recovery Act (ARRA), our housing program.”

Romer added that as indicated in Obama’s speech, today’s announcement of tapping into TARP funds isn’t “a sum total of everything that we are considering.” The economic advisor said congressionally extending ARRA provisions is also being considered.

As far as unemployment benefits that are expected to end this month, Solis promised that there will be a discussion on the Hill about extending unemployment insurance and extending certain ARRA provisions that would be applicable.

Boehner Claims Recovery Act Played No Role In Lowering Unemployment

House Minority Leader John Boehner (R-Ohio) refused Friday to attribute November’s small drop in unemployment to the American Recovery and Reinvestment Act.

“We’re encouraged that the rate dropped slightly, but I don’t think it has anything to do with the stimulus bill at all,” said Boehner during a morning press conference.

According to the Department of Labor's Burea of Labor Statistics, November’s unemployment rate was 10 percent, a slight decrease from October’s 10.2 percent.

Boehner pointed to the 27,000 construction jobs lost in November as evidence for the Recovery act’s failure to bolster employment.

“I looked at numbers yesterday on construction employment and you can see where the stimulus bill has passed, but the line has continued to run downward uninterrupted ever since,” said the Minority Leader.

Added Boehner, “You can argue that the line could have gotten worse had it not been for the stimulus on construction jobs, but other than the money that was in there for infrastructure, the other ... $740 billion in this bill had nothing to do with putting people back to work.”

$80.9 billion in Recovery act funds has been reserved for improving the U.S. infrastructure.

“They may have saved some government jobs,” Boehner quipped. “I will admit that.”

White House Press Briefing With Robert Gibbs

By Meagan Wiseley, University of New Mexico-Talk Radio News Service

-Recovery Act

Robert Gibbs introduced Jared Bernstein and Melody Barnes to discuss the report released this morning on education-based jobs saved by the American Recovery and Reinvestment Act.

Bernstein, the Chief Economist and Economic Policy Advisor to Vice President Joe Biden, said that preliminary recipient data that is coming in to the Recovery Accountability and Transparency Board shows 250,000 education jobs saved or created. These jobs are a subset of the 1 million jobs saved or created thus far through the act, which leaves the Economic Council on track to accomplish the stated goal of saving or creating 3.5 million jobs by later next year.

Bernstein added that the data reflects direct jobs, or jobs that are directly created and funded through spending in the Recovery Act. The Council of Economic Advisers has estimated that the Act has saved about 1 million jobs so far, and this estimate includes direct and indirect jobs.

Bernstein said this is clearly the most transparent and accountable treatment of a government program that has ever been seen before.

Barnes, the Director of the Domestic Policy Council, said the Recovery Act has made schools able to avert massive layoffs and also created jobs for educators in the pre-kindergarten, K-12 and higher education fields.

Barnes pointed out that preventing layoffs averted class size expansion, which has been a concern in the educational context.

Additionally, Barnes said reforms have been put in place to increase standards and assessments, teacher effectiveness and student progress tracking. An extended school day and school year for struggling schools has also been implemented.

When asked how the revenues to keep the new jobs in place when the federal dollars from the Recovery Act money are gone, Barnes said the administrations was very cognizant of such a scenario when developing the Recovery Act and that it was created in the context of the economy improving. Thus, states would be able to support these jobs and increases once the economy strengthens.

-Afghanistan

On the possibility of a runoff election in Afghanistan, Gibbs said that, in his assessment, General McChrystal knew the election would be taken into account. Gibbs said a sizable American force in Afghanistan must be met with a credible partner, and that, without a credible partner, no one involved can make a difference. Gibbs said he is supportive of Deputy Chairman of NATO, Lt. Gen. Karl Eikenberry’s plan to work with Afghan President Hamid Karzai on this matter.

Gibbs refused to comment on hypothetical situations regarding a future election, but did say the administration is encouraging processes by the Afghan people to choose a candidate that is legitimate.

-Health Care Reform

On Heath Care reform, Gibbs said the administration is working to ensure choice and competition in the insurance market. He said the President has been clear on his preference for a public option to be in the final bill.

-Sudan

On Sudan, Gibbs said a comprehensive policy is needed to deal with the humanitarian crisis in Darfur. Gibbs said there is pressure being put on the Sudanese government, and if steps are taken to address components of this issue by the government, there will be incentives.

-Iran

On Iran, Gibbs said that Iran has an opportunity and a responsibility to demonstrate to the world their purpose for a nuclear program. He said the U.S. obligation is to get a sizable amount of low enriched uranium out of Iran in order to make the world more secure.

-Economy


On the financial sector, and Godlman Sachs/JP Morgan executive bonuses, Gibbs said the administration does not want to be in the business of executive compensation. He said last September that the American people went through great lengths to make sure the financial system didn’t collapse. He said the banks are equally as responsible to ensure that it doesn’t happen again.

Boehner Will Back $250 To Seniors If It Comes From Stimulus Funds

Travis Martinez, University of New Mexico/Talk Radio News Service
House Minority Leader John Boehner (R-Ohio) said Thursday that he would support the recent announcement by the White House to provide senior citizens with a check for $250 if the move was payed for with Recovery Act funds.

“The stimulus bill is not working,” said Boehner during a press briefing. “If we’re going provide this benefit to our seniors, why don’t we take it from stimulus funds that clearly aren’t getting the job done?”

The White House suggested the $250 early Wednesday to counter the lack of a cost of living increase in funds received by Social Security recipients.

Boehner was joined Thursday by Senate Minoirty Leader Mitch McConnell (R-Ky.), who disparaged the direction the health care debate has taken.

McConnell called upon his Democratic colleagues to slow down the health care reform process, pointing to the length of time it took the Senate to tackle other crucial issues.

“Some would argue that [health care reform] is a bigger issue than No Child Left Behind. We spent seven weeks on that,” McConnell said. “Some would argue that this is a bigger issue than Energy, we spent eight weeks on that.”

Treasury Official: Recovery Act Stalled Job Loss

By Justin Duckham-Talk Radio News Service

A high-ranking Treasury Department official says that the stimulus plan is not responsible for the August rise in unemployment and may in fact have mitigated it. Friday in a briefing with reporters, Alan Krueger, Assistant Treasury Secretary for Economic Policy and Chief Economist, said that there are signs that the economy is improving, but that employers are not hiring because of a lack of confidence. In August, the number of unemployed persons increased by 466,000 to 14.9 million and the unemployment rate rose by 0.3 percent to 9.7 percent. Nonfarm payroll employment rose to 9.7 percent, or 216,000 Americans without jobs.

“Without the steps (the Obama administration has) already taken, the pain would be much worse,” Krueger said, alluding to the American Recovery and Reinvestment Act, a two-year program which will provide $787 billion to jump-start local and state economies. “The typical pattern is that we see the job market recover more slowly. From employers’ perspectives, they want to be more confident that they are going to see an increase in demand before they hire.”

According to the U.S. Bureau of Labor Statistics: “Among the major worker groups, the unemployment rates for adult men (10.1 percent), whites (8.9 percent), and Hispanics (13.0 percent) rose in August. The jobless rates for adult women (7.6 percent), teenagers (25.5 percent), and blacks (15.1 percent) were little changed over the
month. The unemployment rate for Asians was 7.5 percent.”

Since December, 2007, employment has fallen by 6.9 million. In August, construction employment declined by 65,000, in line with the trend since May. Monthly losses had averaged 117,000 over the six months ending in April. Employment in the construction industry has contracted by 1.4 million since the onset of the recession. Starting in early 2009, the larger share of monthly job losses shifted from the residential to the nonresidential and heavy construction components. In mining, employment declined by 9,000 over the month.

In August, manufacturing employment continued to trend downward, with a decline of 63,000. The pace of job loss has slowed throughout manufacturing in recent months. Motor vehicles and parts lost 15,000 jobs in August, partly offsetting a 31,000 employment increase in July.

Employment in the retail trade industry was little changed in August. Employment also was little changed in professional and business services over the month. From May through August, monthly employment declines in the sector averaged 46,000, compared with 138,000 per month from November through April. Job loss in its temporary help
services component has slowed markedly over the last 4 months.

Employment in health care continued to rise in August (28,000), with gains in ambulatory care and in nursing and residential care. Employment in hospitals was little changed in August; job growth in the industry slowed in early 2009 and employment has been flat since May. Health care has added 544,000 jobs since the start of the recession.

September employment figures will be released on Friday, October 2.