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Obama faces opposition from Senate Democrats
President-elect Barack Obama unveiled his massive economic stimulus plan yesterday, and most of the resistance to the package seems to be coming from inside the Democratic party. In a closed-door meeting with Obama aides David Axelrod and Lawrence Summers, democratic leaders expressed reservations about proposed tax cuts for businesses and individuals.
Quite frankly, because of the economy, if someone gives you a tax break you’re probably saving that money. You are going to salt that away, you are not going to spend it,” said Senate Agriculture Chairman Tom Harkin.
- Iowa Senator Tom Harkin
Harkin spoke to reporters after the meeting, and he said he thought the plan relied too much on the “trickle down” theory, reports the National Journal.
Party priorities
Democratic leaders are saying more emphasis needs to be placed on other parts of the plans, specifically investing in energy and infrastructure. Obama’s proposal includes plans to create jobs in developing alternative energy and repairing the nation’s roads and bridges.
Harkin said many people at the meeting expressed the sentiment that the most important step toward fixing the economy is creating jobs. Budget Chairman Kent Conrad said energy is “way underrepresented” in the plan.
Stimulus check vs. tax break
The plan would give individual Americans $500 over a period of months through decreased tax withholding. For some, this could make the difference in whether they need a payday loan. Tax cuts would also be given to businesses who hire new workers. After the Bush administration sent out stimulus checks last year, it had no noticeable effect on the economy. So many Democrats believe a tax break would be ineffective as well.
However, Majority Whip Richard Durbin disagreed. He believes that Americans save the money from their stimulus checks “because it’s the only thing coming.” He argues that if a small but steady stream of extra cash were predictable, people would consider making purchases they otherwise would not.
More voices chime in
Economists are calling on Congress to act quickly to pass the American Recovery and Reinvestment Plan, but they are split on support for the tax cuts. Some support the breaks and believe they will stimulate the economy, but others are skeptical that it will encourage more spending.
The U.S. Chamber of Commerce responded positively to the plan. Chamber President and CEO Tom Donohue expressed a rare sentiment when he called the package a relatively “cheap investment.” The price tag for the plan is estimated at $800 billion.
Editing process
Summers, Obama’s economic council director, was noncommittal about what changes would be made to the plan. Leaders involved in passing the huge initiative expect to see a lot of back-and-forth before an agreement is reached.
Republicans yesterday expressed general agreement with the plan. Some are encouraging that the proposed grant to supplement state revenue should instead be loans.
Check back with your payday loan source for more updates on the progress of Obama’s proposed stimulus plan.
I think we need the stimulus plan, and it needs to be very large, but Congress needs to make sure that it continues providing benefits in the long term, not just a shot in the arm for the short term.
The infrastructure spending will help keep the economy growing in the long term, but it would also be helpful if Congress could find a way to encourage businesses to invest in infrastructure as well. Possibly they could do this by making sure there are fewer unnecessary regulations that dissuade businesses from making those investments. There seem to be many businesses that have money to invest, but not as many that are actively investing in any forward-thinking enterprise. Hopefully Congress can find ways to get that money flowing.
The tax cuts on businesses would certainly be helpful, especially on small businesses or businesses in sectors where there is potential for significant job creation. We need the businesses like that to be able to resume their traditional role as the engine of our economy. The government can certainly assist the process getting started, but businesses will actually provide the growth.
I think the aid to the state governments is also needed, because the programs that the state governments support are needed for sustained growth. For instance, the state governments support schools and public workforce training programs. It is important to make sure both of those programs survive to make sure we are able to provide workers for whichever sectors of the economy are providing the jobs.
I recently saw that the Friends of the U.S. Chamber of Commerce is working with Congress to make sure that they take these things into account when they are designing the stimulus package. They have a petition that I encourage everyone to sign to make sure Congress knows that we want the economy fixed – but we want it fixed for the long-term – http://www.friendsoftheuschamber.com/takeaction/index.cfm?ID=76
Too little too late.
America is at a serious crossroads. In light of the fact that our economy is in the toilet, it’s time for our elected leaders to consider some new ideas to pull us out of the recession. The best way to make sure they do this is to make our voices heard. I encourage everyone to check out Friends of the US Chamber online and sign the petition – strength in numbers!
Creating long term employment is the best way to stimulate the economy. People earn money…people spend money!
Five hundred dollars will not go far, or make much of a difference in spending habits, maybe just pay off a loan.
Giving people a stimulus check will cost the government billions, yet will make very little difference in most peoples lives. To me it does not seem like money well spent. After that small ammount of money is gone, then what?
I could use a stimulus check and I PROMISE TO SPEND ALL of it!!!!!!!!!!!!!!new roof, drive way, kitchen repair, etc.