Recovery+Package

If the House version of the federal stimulus package becomes law, Ohio will save 300 youth services jobs, 130 more in addiction counseling and at least 20 positions for aides who provide a respite to relatives of Alzheimer's patients. It would mean keeping as many as 8,000 children in state-supported child care and saving 500 corrections jobs in a state where prisons are well over capacity. If the Senate version triumphs, all of those jobs and subsidies -- plus many more -- will disappear, said Gov. Ted Strickland (D), who has joined with other governors to press members of Congress to back the more generous House approach. The two chambers began to resolve their differences yesterday on how much money to send to states and other sticking points, after the Senate passed an $838 billion stimulus package. Senate and House leaders played down discrepancies between the two versions, saying that both would provide a boost to the economy and that an agreement on a final bill could come as soon as the end of the week. But for states, the differences are potentially enormous. The House included $79 billion in direct aid to states, $40 billion more than the Senate, and governors are counting on that money to help balance budgets that are billions in the red.
 * __Obama’s Stimulus (“Recovery”) Package __**Tim Thiel 1-29-08
 * UPDATE 2/10/09 Bryan Fabert**

**-HOW MUCH $$$$ : **As of 1-29-08 stimulus plan said to total $819 Billion Dollars House of Representatives passed bill 244 to 188. (not a single republican vote) **WHY IS IT NEEDED? **The Congressional Budget Office defines the goal of any such package this way: "Fiscal stimulus aims to boost economic activity during periods of economic weakness by increasing short-term aggregate demand." The theory is that if more goods and services are being bought, whether cement for a new highway or groceries paid for with a tax rebate, there is less chance that falling demand will lead companies to lay off workers, resulting in greater falls in demand and a deeper downturn. - The Recovery plan is an expansive combination of spending and tax cuts that aim to put millions of unemployed Americans back to work and halt what is widely believed to be the nation’s worst recession since the Great Depression. **What is in the bill? ** The House bill as passed consisted roughly of **two-thirds spending and one-third tax cuts**. Its cost decreased by $6 billion as Democrats voluntarily dropped from the package several provisions that Republicans had singled out for derision, including money to restore the Jefferson Memorial and for family planning programs. -An income tax cut for most Americans earning __less than $200,000__ a year. Under the plan, individuals would receive up to __$500__ and families up to __$1,000__ through a cut in payroll taxes on the first $8,100 in income. The money would be delivered through paychecks as a __reduction in [|__Social Security__] withholdings__, and is intended to bolster consumer spending by giving a small lift to household pocketbooks. -$275 billion in tax relief, $90 billion for infrastructure, $79 billion for school funding, -$6.2 billion for home weatherization (Obama says: We're going to weatherize homes, that immediately puts people back to work and we're going to train people who are out of work, including young people, to do the weatherization. As a consequence of weatherization, our energy bills go down and we reduce our dependence on foreign oil. What would be a more effective stimulus package than that?") -$50 million for port modernization and water and wastewater infrastructure needs in Guam ??????? -100 million for children to learn green construction [|$198 million] for U.S. military benefits for Filipinos who fought for the U.S. during WWII [|$75 million] for "smoking cessation activities" [|$87 million] for the "design of a new polar icebreaker" [|$335 million] for HIV/STD screening [|$600 million] to buy hybrid vehicles for federal employees  <span style="font-size: 9pt; line-height: 200%; font-family: 'Georgia','serif';">-A total of __$37 billion was proposed for high-tech items__, like expanding broadband access and converting medical records to electronic form. Mr. Obama made the case that the package would help students go to college, protect workers from losing health care, lower energy bills and modernize schools, roads and utilities. <span style="font-size: 9pt; line-height: 200%; font-family: 'Georgia','serif';">-The plan would shower the nation’s school districts, child care centers and university campuses with $150 billion in new federal spending, a vast two-year investment that would more than double the Department of Education’s current budget. Along with <span style="font-size: 9pt; line-height: 200%; font-family: 'Georgia','serif'; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Times New Roman';"> House want to “buy American” and House Democrats want to __require that all iron and steel used in stimulus-funded infrastructure projects should be made in the United States__. America’s steel producers are happy, especially since they saw their share of the world steel market fall from 7.9% to 7.2% in 2008. But American exporters fear retaliation against their goods, both in places like China, at whom the steel provisions are aimed, and in rich countries, which are already slipping domestic-purchasing requirements into their own stimulus packages. **__ IMPACTS: __** collapse of global trade, violation of long standing distribution/purchasing contracts of private countries. (Eg. Bill requires all spending on uniforms of Dept. of Homeland Sec. purchase all their uniforms from American manufactures, What about the town in Spain or Mexico that relies on that contract to keep their town running, shuts down global market.  **__ Impractical: __** Gov plan says that $20 billion that is being allocated for computerising medical records exclusively towards American tech firms. Such a requirement, they say, is justified in an economic-stimulus package. But critics point out that it is hardly possible to meet it (IT being such a global business), even if it were a good idea.   **__ No Solvency: __** An initial CBO analysis found that a mere $26 billion out of $274 billion in infrastructure spending, just 7 percent, would be delivered into the economy by next fall. An update determined that just 64 percent of the stimulus would reach the economy by 2011.  <span style="font-size: 9pt; color: #333333; font-family: 'Georgia','serif';">(Source: New York Times, Economist <span style="font-size: 9pt; line-height: 200%; font-family: 'Georgia','serif'; mso-fareast-font-family: 'Times New Roman'; mso-bidi-font-family: 'Times New Roman';">
 * __<span style="font-family: 'Georgia','serif';">Why is it BAD?? – __**<span style="font-size: 9pt; font-family: 'Georgia','serif';">This recovery packages adds to the debt created by the troubled asset relief program (TARP) that was in November of 2008($700 billion), making a new $2.2 trillion goverment debt in less than one year.
 * __<span style="font-size: 9pt; font-family: 'Georgia','serif';">Important quote: __**<span style="font-size: 9pt; font-family: 'Georgia','serif';"> “This is a crisis of excessive debt, which reached 355 percent of American gross domestic product,” he said. “It cannot be solved with more debt.” said [|__Niall Ferguson__], a [|__Harvard__] historian who has studied borrowing and its impact on national power
 * __<span style="font-size: 9pt; font-family: 'Georgia','serif';">Learn from History: __** IN 1929 Willis Hawley and Reed Smoot, two protectionist Republicans in Congress, sponsored a bill to raise tariffs to the highest levels America had ever seen. And in the midst of economic distress, the protectionists won. The result was a round of reciprocal tariff hikes elsewhere, and a disastrous collapse in international trade.
 * __ Look at history:  __**<span style="font-size: 9pt; color: #333333; font-family: 'Georgia','serif';">Massive stimulus didn't work in the Great Depression. As this Heritage Foundation study notes: "After the stock market collapse in 1929, the Hoover Administration increased federal spending by 47 percent over the following three years. As a result, federal spending increased from 3.4 percent of GDP in 1930 to 6.9 percent in 1932 and reached 9.8 percent by 1940. That same year-- 10 years into the Great Depression--America's unemployment rate stood at 14.6 percent." Same goes for Japan and its Great Stagnation of the 1990s.