The miracle stimulus package promised by President Barack Obama’s campaign is now working its way through congress. With the support of a democratic majority in both the Senate and House of Representatives the bill is likely to pass quickly but that does not mean that it will go uncontested. Republicans are concentrating upon a few key parts of the controversial bill to dispute such as state and local aid, tax cuts, and extravagant social spending. While the democrats have the power in both the House and the Senate to practically disregard the republicans, it would be smart to continue to work towards bipartisanship and listen to some of the republican arguments.
One of the most controversial parts of the bill is the proposed $40 Billion of aid to be given to states. Many people think that the federal government is seriously over stepping its bounds by interfering with state spending and are worried about the equality of the distribution of the funds. This money would go to help support state and local services as well as keeping public employees employed. Although this would distribute itself rather quickly it has been seriously questioned that it would actually improve the economy. It is seen as a superfluous addition to the bill which will quickly act to help the loss of jobs but will not create jobs or improve the economy in any way.
Another issue that has been heavily debated is the form of tax relief that should be given. President Obama was largely elected on a tax platform of relief for middle-class Americans yet some of the latest reforms to the bill are making these tax breaks harder to get. By lowering the maximum income to claim the tax credit the bill is able to support provisions that are put in place to boost spending in the auto and real estate markets. New home buyers would be able to receive 10 percent of their home cost or up to $15,000 of tax credit. The other idea is to increase car sales by providing $11 billion in tax breaks to deduct any sales tax and the first year of loan interest. These tax breaks seem like great ideas to boost the consumer markets but one must wonder if this money is being spent wisely. The last time that it was easy to buy a car or a house the credit markets collapsed once people became overspent and the country ended up in the economic dumpster that it is in now.
The last fear that is connected with this bill is that the democrats will disguise social spending as stimulus options simply adding to the national debt. Some of the things like local construction have many parts to it. Many Republicans believe that the federal government should not be contributing to local spending. At the same time the idea has been put forward to make sure to buy American when doing this process. This would have a huge impact upon the American economy as it not only creates jobs in public works but could help the American steel industry and many other struggling American manufacturing industries. Some of the other proposed reductions are things like aid given to NASA and the National Science Foundation. The idea is to provide support to a wide range of industries in the hope of retaining and creating jobs but the line between wasting money and a successful stimulus package is very blurry. It is important that congress remembers that the best way to create and effective stimulus package is going to be by a bipartisan effort to make sure that every dollar is accounted for and spent wisely.
http://www.nytimes.com/2009/02/08/us/politics/08stimulus.html?pagewanted=1&bl&ei=5087&en=800722cbd5904cc4&ex=1234328400
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If President Obama's proposed stimulus package is estimated to total over 820 billion dollars, then why is the Senate arguing over a fraction--40 billion dollars to be exact--of the aid? If the federal government is planning to pass a stimulus package in order to help the U.S. economy, then they should do so in a way that benefits the entire population, which in this case, would include giving the extra money to the states. Since the federal government is already planning to spend an excessive amount of money, they should not worry about an extra 40 billion dollars, when it might be able to help the economy or lifestyles of citizens in any way. I do not think that the federal government is overstepping their boundaries by giving this aid to the states, and I believe that while it may not improve the economy, if it is not given, states may have to cut back, increasing the number of unemployed individuals, which in turn, could hurt the economy as a whole. Overall, I believe that if the Senate is planning to pass a stimulus bill worth roughly 820 billion dollars, they should not worry about an extra 40 billion dollars that may play an active role in helping the economy.
In addition, while the Democratic Party holds the power in both the Senate and the House, I believe it is extremely important for both the Democratic and Republican party to work together and establish bipartisanship. If not, the two parties will constantly be fighting, which could decrease their effectiveness. If their effectiveness decreases, the American public could lose faith in the government, which could lead to yet another shift in power in both the House and the Senate.
Another key issue discussed in this article involves the federal government urging the American public to spend money on homes and cars. While they may believe that this increased spending would help to stimulate and help the economy, in reality, it can create debt among individuals, intensifying the recession we are now in, creating a depression. I believe that the government needs to rethink their plans for stimulating the economy. Encouraging American citizens to spend money is not the answer the American public is looking for or needs. I believe that stimulus packages as well as social programs are going to need to be instated in order for the economy to restore itself back to its full potential.
The final stimulus bill decided upon was $787 billion. The tactic that is being employed to distribute these funds is quick spending. Unlike previous stimulus packages this newest attempt seems to have quite a bit of support and it is projected that the entire sum will be spent in about 2 years. This is a different strategy than the tax cuts that George W. Bush relied upon although tax cuts still account for a third of the money. By simply putting the money strait into the economy instead of first going through the tax payers the bill is designed to make sure the money is used to its maximum efficiency. The following is a link to a general breakdown of the bill although it is not the final bill decided upon.
http://www.washingtonpost.com/wpdyn/content/graphic/2009/02/01/GR2009020100154.html
The sentiments about the desire to make bipartisan decisions has created a little bit of an uproar on capitol hill as many democrats think that the bill should not have included republican interests as it did. These arguments seem to mostly come from liberal democrats who had their spending initiatives cut out of the final bill and it is an argument that does not paint the Democratic Party in a good light.
Melanie’s argument that the issue of federal funding of state initiatives should not be questioned is somewhat legitimate when looking at the grand scale of things however to say that $40 billion is not something to argue about is not as correct. When challenging the proposed $40 billion it is important to know that many states have already issued their own stimulus packages. Furthermore states are able to accrue debt just as the federal government is doing with this stimulus. Each state is capable of issuing municipal bonds to cover the expenses accrued to continue to pay their employees. By having the federal government assume the debt for many of the states, the country is in essence bundling their debt into one sum which releases each state from their responsibility to repay the funds although the debt will still affect the country’s economy. The differences between having states accrue debt and the federal government may have similar effects in the short term but the long term effects could lead to a weaker national economy.
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