Tom McNamara, Blueprint America
“We’ve got a little more work to do over the next couple of days,” President Barack Obama said of the economic stimulus bill in a speech in Fort Myers, FL, “But it’s a good start.” As the Senate version of the stimulus plan was approved on Tuesday, congressional leaders have already begun negotiations with the Obama administration to reconcile both the House and Senate versions.
In no place is an economic stimulus more needed than in Fort Myers. Lee County lost a higher percentage of jobs (8.8 percent), according to the Bureau of Labor Statistics, from June 2007 to June 2008 than any other county in the nation.
The Senate bill is $838 billion; the House version, approved in late January, is $820 billion. The Obama Administration and congressional Democrats want to reduce the overall price to just under $800 billion.
Even as the President wants to remove billions from the final bill as pressure from some moderates in the Senate still seek to hold down costs, he also looks to restore funding cut for schools, health insurance and computerizing health records.
To make room for added spending, tax break measures, including provisions to boost auto and home sales, could be scaled back. The potential cost of doing this, however, could be the loss of the three Republican votes in the Senate that were needed to approve the bill.
Infrastructure of the stimulus bill
What is almost gone from the stimulus discussion now is infrastructure. After months of talk of a new New Deal and putting people back to work with public works spending while, at the same time, building a new America, the focus of the stimulus bill has been shifted to tax breaks for home builders, new-car buyers and manufacturers, spending cuts for state governments, and a limit to executive bonus pay.
Moreover, the construction industry, “reeling from stalled projects and difficulty in accessing financing,” according to The Wall Street Journal, “would see a tough loss in the Senate compromise bill.” In the Senate, nearly $20 billion in school construction projects was removed.
The new version of the Senate bill would cut proposed funding for a state fiscal stabilization fund from $79 billion to $39 billion. As most states face staggering budget deficits, state governments anticipate that they may have to lower the level of services they provide – from education to infrastructure maintenance and updates. Shovel ready projects, for example, are only in the waiting due to dedicated state funds. Consequently, no matter how much is spent by the federal government, state services and projects will struggle without the initial funding on the state and local level.
Sources: The New York Times, The Wall Street Journal