Congress Compromises on Stimulus Package

The House and the Senate reached a compromise this afternoon on the much anticipated American Recovery and Reinvestment Plan. Lawmakers found a middle ground to settle the differences in the Senate's version of the bill with a $838 billion price tag passed just yesterday, and the House version calling for $819 billion that was passed on January 28.

Senate Majority Leader Harry Reid said, "The difference between the bills were really quite similar and I'm pleased to announce we were able to bridge those differences."

Reid also commended the only three Republicans to support the bill. "I'm really at a lack of words how to express my admiration, respect - for the love of our country, the patriotism and the courage of three brave Senators - Specter from Pennsylvania, Snow and Collins from Maine. I don't think I need to say more than that."

"The middle ground we've reached create more jobs than the original Senate bill and spends less than the original House bill. This bill creates 3.5 million jobs. More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95% of American workers," Reid said. "We all agreed we cannot short-change our future which is why we're giving states the critical help they need to strengthen education and invest in our communities."

Congress has been under much pressure over the past few weeks to have a package ready for President Obama to sign by President's day, which is Monday, February 16. The compromised bill totals $789 billion for the stimulus package, with approximately $252 billion in tax cuts and $507 billion towards spending.

The White House reported that even before money from the American Recovery and Reinvestment Act is available to start stimulating the economy, the President’s signature on the act may itself be able to start saving jobs.

Though it could be a matter of weeks or months before funds from the act actually reach businesses and local governments, the Chairman and CEO of Caterpillar said today that if ARRA passes, his company would be able to rehire some of the 20,000 employees it has laid off in the last few weeks.

President Obama announced the news today in front of a Virginia road construction project that had to stop short because funds ran out -- but is precisely the kind of project the recovery act could get going again.

"Where we are standing, that could mean hundreds of construction jobs," he said. "And the benefits of jobs we create directly will multiply across the economy."

Obama said, "As President, I expect to be judged -- and should be judged -- by the results of this program. That's why I refused to allow even a single dollar in this legislation to be spent on earmarks. And that's why we're going to put information about every dollar that's spent, including the money spent on projects like this one, on a new website called recovery.gov -- so that the American people can see where their money is going."

President Obama has stressed the urgency in passing this bill as quickly as possible to prevent the financial crisis from spiraling into a "catastrophe" that could take the nation years to recover from.

The Recovery and Reinvestment Plan is one leg of the "three-legged stool" that Obama has said we need to prop up the economy. Another leg is the Financial Stability Plan Treasury Secretary Timothy Geithner announced yesterday that is geared towards stabilizing the banking industry to get credit flowing again.

The Financial Stability Plan will come with a cost of up to $2 trillion. Geithner noted that the massive amount of money represented investments and loans that were to be paid back, in an obvious attempt to console taxpayers.

The Congressional Budget Office reported in January an expected federal deficit of $1.2 trillion for 2009, and that was without these financial rescue packages. Add the deficit, the Recovery and Reinvestment Plan at almost $800 billion, and the Financial Stability Plan at $2 trillion - and we're looking at a national debt of nearly $4 trillion. Well, at least until those investment dividends and loan payments start rolling in.

$4 trillion is a lot of money. Most of us can't even fathom how to spend that kind of money. To put it in perspective, here's an eye-opening example as explained by math professor and author John Allen Paulos, "A million seconds is about 11½ days. A billion seconds is about 32 years, and a trillion seconds is 32,000 years."

The world's economic problems started because of too much debt - beginning with the sub-prime mortgage disaster in which millions of homeowners took on more debt than they could handle. And now our nation's leaders plan to fix those problems by incurring more debt. Let's hope they know what they're doing.



Sources:
The White House
yahoo.com
cnn.com
cbs.news