Stimulus bill anniversary thread

It’s been a year since President Barack Obama signed the American Recovery and Reinvestment Act (better known as the stimulus bill) into law. I didn’t like the early concessions Obama made to Republicans in a fruitless effort to win their support for the stimulus. I was even more upset with later compromises made to appease Senate conservadems and Republican moderates. They reduced spending in several areas that had real stimulative value (school construction funds, extra money for the Low Income Home Energy Assistance Program, aid to state governments) in order to include tax cuts that have much less stimulus “bang for the buck.” Senator Tom Harkin was right to question why 9 percent of the stimulus bill’s cost went toward fixing the alternative minimum tax, for instance.

Still, I supported passage of the stimulus bill. In late 2008 and early 2009 the U.S. economy was losing 600,000 to 700,000 jobs per month. Something had to be done. On balance, the stimulus did much more good than bad. Economists agree it has saved or created a lot of jobs:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Two and a half million jobs isn’t enough to compensate for the 8 million jobs lost since this recession began, but it’s a start.

Not only did the stimulus create jobs, it greatly increased spending on programs that will have collateral benefits. Incentives to make homes more energy efficient will reduce greenhouse gas emissions and save consumers money that they can spend elsewhere. Money for sewer improvements will provide lasting gains in water quality (inadequate sewers and septic systems are a huge problem in Iowa). The stimulus included $8 billion for high-speed rail. It wasn’t nearly enough, of course; we could have spent ten or twenty times that amount on improving our rail networks. But that $8 billion pot drew $102 billion in grant applications from 40 states and Washington, DC. The massive demand for high-speed rail stimulus funding increases the chance that Congress will allocate more funds for rail transportation in the future.

Unfortunately, most Americans don’t believe the stimulus bill created jobs. That’s largely because unemployment remains at a historically high level of 10 percent nationwide. Also, inflation-adjusted average weekly earnings have gone down during the past year. In addition, Republicans have stayed on message about the worthlessness of the stimulus bill, even though scores of them have hailed stimulus spending in their own states and districts.

Democrats on the House Labor and Education Committee released an ad that lists various popular stimulus bill provisions, such as increasing Pell Grants and teacher pay. The ad uses the tag line, “There’s an act for that,” naming the American Recovery and Reinvestment Act at the end. I don’t think it’s effective, because the ad doesn’t include the word “stimulus.” Few people will realize that the ARRA refers to the stimulus bill.

Bleeding Heartland readers, how do you view the stimulus one year later?

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Braley wants "Buy American" provisions in jobs bill

President Barack Obama announced more details today about provisions he wants in the jobs bill Congress will take up soon:

Obama proposed new spending for highway and bridge construction, for small business tax cuts and for retrofitting millions of homes to make them more energy-efficient. He said he wanted to extend economic stimulus programs to keep unemployment insurance from expiring for millions of out-of-work Americans and to help laid-off workers keep their health insurance. He proposed an additional $250 apiece in stimulus spending for seniors and veterans and aid to state and local governments to discourage them from laying off teachers, police officers and firefighters.

Making homes more energy efficient would not only create jobs, but would produce huge collateral benefits, as A Siegel explains at the Get Energy Smart Now blog. Money that homeowners and business owners save on utility bills is money they can spend on other goods and services.

Populist Caucus Chairman Bruce Braley (IA-01) and House Trade Working Group Chairman Mike Michaud (ME-02) wrote to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer today, urging them to make sure the jobs bill contains a strong “Buy American” provision. From a press release Braley’s office issued:

“Recently, as America has suffered the worst economic recession since the Great Depression, unemployment has risen and is now around 10 percent,” the letter reads. “We believe that the shipment of American jobs overseas is a factor in this rising unemployment.  If we are going to pass a strong job creation bill then it only makes sense to include strong Buy American provisions, to further ensure that the jobs created as a result of this legislation are created within the United States.

“We have an obligation to create jobs in America. While some would argue that Buy American is nothing more than a trade protectionist label, it is clear that these provisions would equate to greater investment, and greater job-creation, within the U.S.  In addition, Buy American provisions are perfectly legal under current trade agreements and many other nations use similar mechanisms to protect their domestic manufacturers.  Therefore, we feel that it is entirely appropriate that this language be included in any upcoming job-creation measure, and we believe that this provision is essential to creating and retaining American jobs.

The stimulus bill Congress approved in February contained “Buy American” language despite a massive corporate lobbying effort.

If the upcoming jobs bill contains aid to state and local governments, as the stimulus bill did, that could help Iowa legislators close the gap in the fiscal year 2011 budget. Republicans keep complaining about Iowa Democrats using federal transfers to balance the state budget, but they ignore the reality that deep cuts in state budgets are themselves a drag on the economy. State employee layoffs have a ripple effect in the private sector. The Center on Budget and Policy Priorities has estimated that without additional federal fiscal relief, “states will have to take steps to eliminate deficits for state fiscal year 2011 that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year.”

UPDATE: Meteor Blades has a good post up at Daily Kos on the jobs bill.

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