President-elect Barack Obama said Friday that even with a range of economic measures to move the United States out of a recession, the economy would likely get worse before it improves.
"Recovery is not going to happen overnight," he told workers at a factory in Ohio. "Even with the measures that we're taking, things could get worse before they get better. I want everybody to be realistic about this."
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Photo By: Steve Jurvetson
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On Thursday Democrats in the House of Representatives unveiled an $825 billion economic stimulus bill that largely adheres to the measures the president-elect has requested.
Also on Thursday, the Senate voted to give Obama authority to spend the $350 billion remaining in a $700 billion financial industry bailout fund created in October. That fund is known as TARP, the Troubled Asset Relief Program.
The $825 billion stimulus plan calls for both federal spending and tax cuts to revive the moribund economy, with strong emphasis on energy, education, health care and jobs-producing highway construction.
The legislation calls for federal spending of roughly $550 billion and tax cuts of $275 billion over the next two years—totals all but certain to rise as it makes its way through Congress.
"Immediate job creation and continuing job creation" are the twin goals, Speaker Nancy Pelosi, D-Calif., said at a news conference. Joblessness has risen sharply in recent months, and Obama has warned it could reach double digits unless action is taken to invigorate the economy.
At $825 billion, the legislation would be one of the largest bills ever to move through Congress, and by traditional standards, lawmakers were moving with unusual speed. Pelosi and Sen. Harry Reid, D-Nev., the Senate Majority Leader, have pledged to have it ready for Obama's signature by mid-February.
The measure calls for $87 billion to help the states meet the rising cost of providing health care for the poor in the recession, and another $39 billion to subsidize coverage by out-of-work wage-earners who cannot afford the cost of their employer-covered health care.
More than $100 billion is ticketed for education, including money for school districts to shield them from the effects of state cutbacks in services.
Democrats also provided tens of billions in spending and tax breaks designed to lessen the nation's dependence on oil as a principal source of energy.
"At first glance, it appears that my Democratic colleagues think they can borrow and spend their way back to prosperity with a half trillion dollars of new spending and less tax relief than President-elect Obama has been talking about," said House Republican Leader John Boehner of Ohio.
President-elect Barack Obama said Friday that even with a range of economic measures to move the United States out of a recession, the economy would likely get worse before it improves.
"Recovery is not going to happen overnight," he told workers at a factory in Ohio. "Even with the measures that we're taking, things could get worse before they get better. I want everybody to be realistic about this."
|
Photo By: Steve Jurvetson
|
On Thursday Democrats in the House of Representatives unveiled an $825 billion economic stimulus bill that largely adheres to the measures the president-elect has requested.
Also on Thursday, the Senate voted to give Obama authority to spend the $350 billion remaining in a $700 billion financial industry bailout fund created in October. That fund is known as TARP, the Troubled Asset Relief Program.
The $825 billion stimulus plan calls for both federal spending and tax cuts to revive the moribund economy, with strong emphasis on energy, education, health care and jobs-producing highway construction.
The legislation calls for federal spending of roughly $550 billion and tax cuts of $275 billion over the next two years—totals all but certain to rise as it makes its way through Congress.
"Immediate job creation and continuing job creation" are the twin goals, Speaker Nancy Pelosi, D-Calif., said at a news conference. Joblessness has risen sharply in recent months, and Obama has warned it could reach double digits unless action is taken to invigorate the economy.
At $825 billion, the legislation would be one of the largest bills ever to move through Congress, and by traditional standards, lawmakers were moving with unusual speed. Pelosi and Sen. Harry Reid, D-Nev., the Senate Majority Leader, have pledged to have it ready for Obama's signature by mid-February.
The measure calls for $87 billion to help the states meet the rising cost of providing health care for the poor in the recession, and another $39 billion to subsidize coverage by out-of-work wage-earners who cannot afford the cost of their employer-covered health care.
More than $100 billion is ticketed for education, including money for school districts to shield them from the effects of state cutbacks in services.
Democrats also provided tens of billions in spending and tax breaks designed to lessen the nation's dependence on oil as a principal source of energy.
"At first glance, it appears that my Democratic colleagues think they can borrow and spend their way back to prosperity with a half trillion dollars of new spending and less tax relief than President-elect Obama has been talking about," said House Republican Leader John Boehner of Ohio.
Obama's top aides have worked closely in recent days with Democrats in Congress to shape legislation that generally adheres to the president-elect's wishes.
At the same time, lawmakers departed dramatically in one area, jettisoning the incoming administration's call to give a $3,000 tax credit for each new job created by private companies.
Another key priority of the new administration was preserved, though. The summary calls for a tax credit of $500 per worker and $1,000 per working couple.
The measure does not include money to help middle- to upper-income taxpayers ensnared in the alternative minimum tax, which was originally designed to prevent the extremely wealthy from avoiding payment of taxes but now threatens more than 20 million tax filers.
Several officials said the Senate was likely to include that provision in its version of the bill, a step that could push the overall total close to $900 billion.
The legislation is one of two key elements in Obama's emerging plan to revitalize the economy. He also has lobbied lawmakers not to stand in the way of the use of another $350 billion in financial bailout money.
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The Senate was expected to vote on the issue later in the day, and the outcome was so uncertain that a tie vote seemed possible. If so, the money would be released.With unemployment rising, and applications for various forms of federal aid keeping pace, the legislation calls for increased spending on food stamps, unemployment insurance and job training. It also proposes an increase in Pell Grants for college students of $500.
House leaders called for $30 billion for highway construction and $10 billion for mass transit and rail.
The summary claimed "unprecedented accountability" and said the bill would include no earmarks, the pet projects that lawmakers are fond of.
In addition, Democrats said all announcements of contract and grant competition would be posted on a Web Site to be created by the new administration.
Funds for energy-related programs were sprinkled throughout the legislation, reflecting a priority not only of Obama, but also House Speaker Nancy Pelosi, D-Calif., and numerous lawmakers in both houses of Congress.
Included is $32 billion to upgrade the nation's electrical distribution system, more than $20 billion in tax cuts to promote the development of alternatives to oil fuels, and billions more to make public housing, federal buildings and modest-income homes more energy efficient.
House committees are working on a schedule that calls for votes next week on parts of the bill, which would then be advanced to the floor for a vote during the last week of January.
Across the Capitol, a companion measure is expected to move along roughly the same timeline in the Senate, and congressional leaders have expressed confidence they would be able to agree on a final version by the time of a scheduled vacation coinciding with Presidents' Day.
Other items in the measure include funds for state and local law enforcement funds, extending broadband service to rural and other underserved areas, and money to computerize health records, a key priority of the incoming president.
Businesses would be able to reduce their taxes through a provision that expands their ability to write off current losses again past profits, and by accelerating the depreciation of new plants and equipment.
First-time homeowners also would get a break. The bill eliminates the requirement for them to repay a new $7,500 tax credit created in a housing measure that passed last summer.
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The Senate was expected to vote on the issue later in the day, and the outcome was so uncertain that a tie vote seemed possible. If so, the money would be released.
Across the Capitol, a companion measure is expected to move along roughly the same timeline in the Senate, and congressional leaders have expressed confidence they would be able to agree on a final version by the time of a scheduled vacation coinciding with Presidents' Day.
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