- What were the reported results?
The economic stimulus plan by President Barack Obama aimed at sustaining and revamping the economic situation in the United States of America. The economic stimulus bill of 2009 marked the intention of the government to support economic growth in the country. The bill targeted economic recovery and reinvestment into the local markets by internal and external investors in the American markets. Through the bill, the citizens of the United States of America would benefit through developed infrastructure for long-term benefits. This aimed at strengthening investment in the subsistence sector and attracting funds from meddle class investors. This paper analyzes the economic stimulus bill and various factors that affected it before and after adoption into law.
A. The $787 billion stimulus package was designed to jump-start an economy that had been in a recession and save jobs (Grunwald, 2012).
B. It intended on making this happen by using $288 billion from tax cuts, $224 billion in extended unemployment benefits, education and health care and $275 billion for job creation using federal contracts, grants and loans (Grunwald, 2012). The package aimed at improving economic conditions for the local people and facilitating investment from foreigners through tax laws.
C. The package was designed to be spent over ten years. $720 billion, or 91.5%, was budgeted for the first three fiscal years: $185 billion in the financial year 2009, $400 billion in FY 2010 and $135 billion in FY 2011 (Grunwald, 2012). The results, FY 2009, $241.9 billion had been spent: $92.8 billion in tax relief, $86.5 billion in unemployment and other benefits and $62.6 billion in job creation grants (Grunwald, 2012). FY 2012 budget, additional funding was allocated to raise the total to $840 billion. By July 31, 2013, $800.8 billion had been spent: $290.7 billion in tax relief, $256.6 billion in contracts, grants or loans, and $253.5 billion in entitlements according to recovery.gov. The Congressional Budget Office projected the GDP growth by 1.4% to 3.8% by the end of 2009 (Grunwald, 2012). The CBO projected the economy would contract 3% for 2009 when in fact, the economy contracted 2.8% in 2009, and expanded 2.5% in 2010. The economic stimulus bill was projected to save 900,000 to 2.3 million jobs. As of October 30, 2009, it saved 640,329 jobs. The Recovery Board stopped estimating job creation after that (Gimpel, Lee & Thorpe, 2012).
- The President of the United States addressed House Democrats 5 February 2009, explaining differences need to be set aside in order to pass the stimulus package.
A. The President sounded irritated during his speech, due to critics. He also had some choice words of advice for his fellow colleagues (Gimpel, Lee & Thorpe, 2012).
B. The President stated, “These aren’t just statistics. This is not a game; this is not a contest for who is in power, up, or down. These are your constituents or the families you know and you care about. I believe it is important for us to set aside some of the gamesmanship in this town and get something done (Gimpel, Lee & Thorpe, 2012).”
C. The President also addressed concerns about spending such a large amount of money when the country has a massive debt (Fair, 2010). He responded with, “First of all I found this deficit when I showed up. I found this national debt doubled, wrapped in a big bow waiting for me when I stepped into the Oval Office (Gimpel, Lee & Thorpe, 2012).” He explains to critics and his House Democrats “Here’s the point I’m making. This package is not going to be perfect, and you can nit and you can pick. That is the game we all play here (Gimpel, Lee & Thorpe, 2012). What I am saying is we cannot afford to play that game. We have to pull together. There are going to be some things that will not get included that each of us would like to see included. All of us are going to have to make some sacrifices (Fair, 2010). Moreover, we have to accommodate the interests of a range of people. The House is going to have to work with the Senate. However, let us think big right now. Let us not think small. Let’s not think narrowly (Fair, 2010).”
- House Republicans take a stand against Democrats like Susan Collins.
A. The House passed an initial version of the stimulus bill with votes of 244-188, with no Republican support (Fair, 2010). The Democrats passed the bill; however, some Democrats that did not support the bill.
B. Reports that claim that Democrats did not seek any input from the Republicans and shut them out. Rep Mike Pence (R-Ind) claims they were left out of the drafting process and had minimal contact with House Majority Leader Nancy Pelosi and other House Democrats (MacIlwain, 2011). Sen. Kit Bond (R-Mo) also made similar statements that Republicans were not consulted in the development of the bill (MacIlwain, 2011).
Fair, R. C. (2010).Estimated Macroeconomic Effects of the U.S. Stimulus Bill.Contemporary Economic Policy, 28(4), 439-452.
Gimpel, J. G., Lee, F. E. & Thorpe, R. U. (2012). Geographic Distribution Of The Federal Stimulus of 2009. Political Science Quarterly, 127(4), 567-595.
Grunwald, M. (2012). Think Again: Obama's New Deal. Foreign Policy, (195), 45-50.
MacIlwain, C. (2011). Stimulus-response: the United States' 2009 financial stimulus bill has provided research with breathing space, rather than the sharp shot in the arm that many anticipated. (NEWS). Nature, (7366), 524.
Schneider, P. J. (2009). The Post-Stimulus Bill Era of Executive Compensation.Journal of Financial Service Professionals, 63(5), 21-24.