Current US Economic Policy
President Lays Out Economic Recovery Agenda
Emphasis on energy, education and health care
By Merle David Kellerhals Jr.
Staff Writer
February 25, 2009
Washington — President Obama spoke to Americans before a joint session of the U.S. Congress about his plans to stabilize, revitalize and expand an American economy that has been weakened and buffeted by an array of conflicting forces, from tight credit to stumbling stock markets.
His address, carried on national television February 24, set out his economic agenda to expand job opportunities, loosen credit to restart investment, address long-standing efforts to improve energy needs while lessening oil dependence, expand health care to all Americans, increase education, and begin the phased withdrawal of U.S. forces from Iraq.
“We will rebuild, we will recover, and the United States of America will emerge stronger than before,” Obama said to a packed chamber of the House of Representatives. “The weight of this crisis will not determine the destiny of this nation.”
The president acknowledged that the impact of the recession is real, but he also said it did not begin with the collapse of the domestic housing market or when the stock markets began their steep declines. “We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before,” he said.
Annual increases in health care costs erode savings while Washington delays reforms, Obama said. “Our schoolchildren will compete for jobs in a global economy that too many of our schools do not prepare them for,” he said.
Obama urged Congress to work toward revitalizing the sagging economy and to begin building a new foundation aimed at enhancing U.S. prosperity.
His address follows the enactment of a $787 billion economic stimulus package designed to correct deficiencies in the economy, stabilize the banking system, curb home foreclosures and save or create 3.5 million jobs across the country. In tandem with the stimulus package are actions by the U.S. Treasury and the Federal Reserve to help financial institutions eliminate troubled assets that essentially have choked off lending to businesses and consumers.
The stimulus plan also includes tax credits for education and an income tax credit for 95 percent of working households that will take effect on April 1, the president said.
In testimony earlier February 24, Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that the U.S. economy is in a “severe contraction,” but with a strong mix of government action by the president and Congress, and monetary stimulus from the nation’s central bank, a recovery could begin next year.
“If actions taken by the [Obama] administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” Bernanke said.
In discussing his economic agenda, Obama also reassured the Congress and the American people that there will be oversight of how federal money is spent on the recovery and how it is being used by financial institutions. He appointed Vice President Biden to lead the oversight along with an inspector general to look for waste and fraud in spending federal funds.
“So the recovery plan we passed is the first step in getting our economy back on track. Because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system,” Obama said.
The president said a lending fund is being created that will help provide loans for automobiles, college educations and small businesses. A housing recovery plan is being launched to help stem foreclosures, lower mortgage payments and help homeowners refinance mortgages.
Obama pledged the full force of the federal government to ensure the banking system has the confidence and funds to lend as needed for consumers and businesses. He added that how financial institutions spend and lend the money will be closely monitored.
“The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short term,” Obama said. “But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries and a renewed ability to compete with the rest of the world.”
The president’s agenda includes doubling the nation’s supply of renewable energy in the next three years, the largest investment ever in basic research funding, and the addition of thousands of kilometers of electric power lines to expand energy service across the country. The agenda also calls for making clean, renewable energy profitable and the development of wind power, solar power, advanced biofuels, clean coal and more efficient automobiles and trucks, he said.
And the president said he would announce in several days a plan to begin the phased withdrawal of U.S. forces from Iraq, which will create savings that can be used to augment recovery efforts.