Obama lays out his stimulus proposal
To help lift the nation out of its most worrisome recession
With a calm sense of urgency, President-elect Barack Obama called Thursday for quick passage of a stimulus plan that could create 3 million jobs and help lift the nation out of its most worrisome recession in generations, San Fransisco Chronicle reports.
"On Friday, we`re likely to learn that we lost more jobs last year than at any time since World War II," Obama said referring to the unemployment report that the Labor Department will issue today.
In a 17-minute speech that alluded to Franklin D. Roosevelt`s call for fearlessness and John F. Kennedy`s plea for selflessness, Obama urged Congress to rise above "narrow partisanship" and "work with me and my team day and night" to end "a crisis unlike any we have seen in our lifetime."
Speaking 12 days before he takes the oath of office, Obama walked a rhetorical tightrope as he argued for spending despite a growing deficit and sought to offer enough specifics to reassure Americans without starting arguments over details.
Obama called for a $1,000 tax cut for "95 percent of working families." He urged the creation of programs to make 2 million homes more energy-efficient while creating good jobs that "can`t be outsourced." To give the plan a futuristic spin, he pledged to invest in such areas as high-tech classrooms and green energy.
Obama put no price on the package or its components, but talk on Capitol Hill suggests he is aiming at an $800 billion plan, of which about $300 billion would go to cover tax cuts. Some Democrats looked sourly upon the idea of tax cuts, while some Republicans argued against big spending plans given that the federal deficit is already projected to surpass $1 trillion in the coming fiscal year.
House Speaker Nancy Pelosi promised to move "not hastily, but quickly" to write a bill before the Presidents Day recess.
"We are not going home without an economic recovery package," Pelosi said Thursday.
Message to Congress
Although Obama spoke to the nation in a speech carried live on television and radio, UC Berkeley rhetoric Professor Daniel Melia said the president-elect`s primary audience was the members of the House and Senate.
"The speech was basically a threat to Congress," Melia said, who boiled down the subtext of Obama`s remarks to this veiled warning: "If you guys dither on this and load it up with lots of junk, there will be consequences."
That theme was echoed by William Niskanen, an economic adviser to President Ronald Reagan, who complained that presidents including Lyndon Johnson and Richard Nixon have made do-it-or-else demands for action on such things as the Gulf of Tonkin Resolution that ignited the Vietnam War and the imposition of wage and price controls in the early 1970s.
"I`ve heard this sort of thing so many times in my lifetime," said Niskanen, who called President Bush`s Iraq war declaration and Treasury Secretary Henry Paulson`s $700 billion bank bailout plea two recent examples of the genre.
"Threats and rushing seem to be the way we make policy," Niskanen said.
Douglas Holtz-Eakin, a former director of the Congressional Budget Office and adviser to Sen. John McCain`s presidential campaign, said he dislikes the size of the stimulus program and the investments in untried programs that have no bearing on the nation`s financial crisis.
"Our problems began with the mortgage market. Focus on that," Holtz-Eakin said. The surest way to create jobs, he argued, would be to cut the 12.4 percent Social Security payroll tax in half for one year - a $400 billion benefit that would reach employers, employees and the self-employed.
Stimulus over deficit
Stanford economist John Shoven said he liked Obama`s speech and agrees that, in the short term, stimulating the economy is more important than controlling the deficit. Though Shoven said he would have liked more details, he said Obama is probably wise to give lawmakers room to craft a plan that met his basic injunction to stimulate the economy but avoid earmarks and pork.
"He doesn`t want to get out ahead of Congress and push for something he can`t get," Shoven said.
In contrast to political insiders who read between the lines, UC Berkeley linguist Robin Lakoff said the general public would react to the tone and delivery of Obama`s speech, an unhurried and colloquial style that harked back to that of Roosevelt.
"In some ways, he`s a lot like FDR," Lakoff said. "It`s a feeling he gets across of calmness and self-assurance that says: `This is a guy who is in control.` "
In his speech, Obama painted the crisis as a moral lapse that resulted from "an era of profound irresponsibility" in which "too little regulation" by government officials encouraged "imprudent and dangerous decisions" by bankers and financiers. The failures at the top created an "anything goes" mentality and cheap-credit culture that sucked many ordinary borrowers in over their heads and eventually caused the house of cards to collapse.
"The result has been a devastating loss of trust and confidence in our economy, our financial markets and our government," Obama said. "The very fact that this crisis is largely of our own making means it`s not beyond our ability to solve ... if we act with the urgency and seriousness that this moment requires."
Key points in Obama`s address The strategy: "A crisis unlike any we have seen in our lifetime" demands a stimulus bill to revive the economy and create 3 million jobs.
The crisis: Without such a plan, "this recession could linger for years," but overspending could worsen already huge deficits.
The cause: This crisis is rooted in an "an era of profound irresponsibility" and an "anything goes" culture that led institutions and individuals to live beyond their means.
The future: "The very fact that this crisis is largely of our own making means it`s not beyond our ability to solve."