statism watch

Liz Sidoti, Tom Raum, The Associated Press
February 17, 2009

DENVER – President Barack Obama put his own indelible imprint on the country’s distressed economy today, signing the huge recovery package into law, readying a $50 billion proposal to help homeowners fend off foreclosure and awaiting emergency restructuring plans from flailing automakers.

Obama said the sprawling legislation, which congressional Democrats pushed to passage last week over near-unanimous opposition from Republicans, would “set our economy on a firmer foundation.”

Obama’s first major piece of legislation, it’s a $787 billion mix of tax cuts and one of the biggest public spending programs since the Second World War.

“I don’t want to pretend that today marks the end of our economic problems. Nor does it constitute all of what we have to do to turn our economy around. But today does mark the beginning of the end, the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs,” Obama said.

The setting for the signing was the Denver Museum of Nature & Science, with solar panels on its roof, underscoring the investments the new law will make in “green” energy-related jobs. Workers in solar, wind, and other renewable-energy industries joined Obama and Vice-President Joe Biden at the bill-signing ceremony.

Presidential spokesman Robert Gibbs told reporters the White House was open-minded about another stimulus effort. But he stressed that there were no plans in the works for one.

Meanwhile, General Motors Corp. and Chrysler LLC raced to complete recovery plans they were due to submit as part of their deal to receive billions of dollars in government loans. It was not clear they would make today’s deadline.

The two automakers have been living off a combined $13.4 billion in federal bailout loans. They must persuade the administration that they can remain viable. Detroit’s third major automaker, Ford Motor Co., did not request government help.

With the economy dominating Obama’s first weeks in office, the president Wednesday will unveil another part of his recovery effort – a $50 billion plan to help stem foreclosures.

All the activity also is allowing Obama to get away from Washington, with its intense partisan wrangling, and be cheered by people who may benefit from the huge government intervention.

Obama planned to outline his plan to help struggling homeowners in a speech in Arizona, one of the states hardest hit by home foreclosures that are at the centre of the country’s economic woes.

The $50 billion program was mentioned last week by Treasury Secretary Timothy Geithner as part of a wide-ranging financial-sector rescue plan that could send $2 trillion coursing through the financial system. But details were not announced at the time.

Obama’s announcement is expected to include details about how the administration plans to prod the mortgage industry to do more in modifying the terms of home loans so borrowers have lower monthly payments.

More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 per cent increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.

As for today’s stimulus package, it will pump money into highway, bridges and other infrastructure projects, health care, renewable energy development and conservation.

It includes a $400 tax break for most individual workers and $800 for couples, including those who do not earn enough to pay income taxes. It will distribute tens of billions of dollars to states so they can head off deep cuts and layoffs and will provide financial incentives for people to start buying again, from first homes to new cars to shoes and cereal.

It also provides help to poor people and laid-off workers, with increased unemployment benefits and food stamps, and subsides for health insurance.

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