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ST. LOUIS NEWS TODAY - Sunday, February 8, 2009

President Obama Takes Stimulus Package to the Streets

President Obama - Taking It to the Streets
ST. LOUIS, MO, (SLFP.com), February 8, 2009 - Credit is frozen, consumer purchasing power is in decline, in the last four months the country has lost 2 million jobs and we are expected to lose another 3 to 5 million in the next year.

In the past two weeks, the Congress has been considering the American Recovery and Reinvestment Bill of 2009. This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century with $275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.

This week, President Obama will hold two town hall meetings and a press conference to bring the American Recovery and Reinvestment Bill of 2009 directly to the people.

On January 15, Dave Obey (D-WI), Chairman of the Committee on Appropriations, released an Executive Summary of the stimulus package which contains targeted efforts in:

Clean, Efficient, American Energy
Transforming our Economy with Science and Technology
Modernizing Roads, Bridges, Transit and Waterways
Education for the 21st Century
Tax Cuts to Make Work Pay and Create Jobs
Lowering Healthcare Costs
Helping Workers Hurt by the Economy
Saving Public Sector Jobs and Protect Vital Services

The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we are warned that unemployment could explode to near twelve percent. With passage of this package, we will face a large deficit for years to come. Without it, those deficits will be devastating and we face the risk of economic chaos. Tough choices have been made in this legislation and fiscal discipline will demand more tough choices in years to come.

Since 2001, as worker productivity went up, 96% of the income growth in this country went to the wealthiest 10% of society. While they were benefitting from record high worker productivity, the remaining 90% of Americans were struggling to sustain their standard of living. They sustained it by borrowing... and borrowing... and borrowing, and when they couldn't borrow anymore, the bottom fell out. This plan will strengthen the middle class, not just Wall Street CEOs and special interests in Washington.

Our short term task is to try to prevent the loss of millions of jobs and get our economy moving. The long term task is to make the needed investments that restore the ability of average middle income families to increase their income and build a decent future for their children.

EXECUTIVE SUMMARY

Unprecedented Accountability: A historic level of transparency, oversight and accountability will help guarantee taxpayer dollars are spent wisely and Americans can see results for their investment.

In many instances funds are distributed through existing formulas to programs with proven track records and accountability measures already in place.
How funds are spent, all announcements of contract and grant competitions and awards, and formula grant allocations must be posted on a special website created by the President (www.recovery.gov). Program managers will also be listed so the public knows who to hold accountable.
Public notification of funding must include a description of the investment funded, the purpose, the total cost and why the activity should be funded with recovery dollars. Governors, mayors or others making funding decisions must personally certify that the investment has been fully vetted and is an appropriate use of taxpayer dollars. This will also be placed on the recovery website.
A Recovery Act Accountability and Transparency Board will be created to review management of recovery dollars and provide early warning of problems. The seven member board includes Inspectors General and Deputy Cabinet secretaries.
The Government Accountability Office and the Inspectors General are provided additional funding and access for special review of recovery funding.
State and local whistleblowers who report fraud and abuse are protected.
There are no earmarks in this package.

This plan targets investments to key areas that will create and preserve good jobs at the same time as it is strengthening the ability of this economy to become more efficient and produce more opportunities for employment. The entire summary is available as a pdf file: American Recovery and Reinvestment Bill of 2009

Success of Stimulus Expected to Vary by Sector and Depend on Ability of States to Direct Use of Funds
ST. LOUIS, MO, (PRNewswire), February 8, 2009 - Although final details of the Federal Government's 2009 economic stimulus package remain to be sorted out by Congress and the new Administration in Washington, the plan that is emerging offers much cause for hope, concludes a new report from Standard & Poor's Ratings Services.

In a series of articles just published on RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, S&P's chief economist and senior ratings analysts evaluate the impact of the proposed stimulus plan -- and the changed priorities the new Administration brings to Washington -- on the credit health of 11 key U.S. sectors and industries that one or the other may most affect. The articles are also part of the cover story for the February 11, 2009, issue of CreditWeek, Standard & Poor's weekly publication on credit risk.

Among the findings discussed in the report, "Affect Credit," are:

Overall, the plan will aid economic recovery. The proposed legislation stands a good chance of hitting the President Obama's target of creating 3 million jobs by 2010 -- though that may not offset all of America's job losses by then.
From a ratings perspective, Standard & Poor's believes loan modifications benefit the banking industry indirectly, but implementation of a broader government program likely won't be easy.
For housing, the plan includes a proposal to extend net-operating loss carry backs to five years from two years, which means that homebuilders could use current losses to apply for refunds for the taxes they paid in prior years, when the housing boom was still gaining steam. An immediate cash infusion could prove crucial to the survival of the more vulnerable, capital-constrained builders.
The level of infrastructure investment under consideration is substantial, and state and local governments -- which already have long-standing capital plans that list projects and their prioritization, funding sources, and construction timetables -- will likely be participants in the resource allocation process.
The Obama Administration's efforts to make higher education more affordable may bear some fruit over the short run, but the economic downturn could potentially offset any credit benefits to colleges and universities over the longer term.

"A major stimulus initiative is the wisest course at this juncture," stated David Wyss, Standard & Poor's chief economist. "What's impossible to know is how successful the plan that finally gets approved will be at creating jobs and reviving lending. It will take a year, if not longer, for the potential benefits of Obama's strategy to fully reveal themselves. And those benefits will depend in part on whether the President and Congress can rebuild public confidence in Washington's ability to make wise moves."

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