In Need Of A Jump-Start
Congress returns this week to focus on a plan to "jump-start
the economy and try to shorten
the slowdown that many economists
say has already begun to take hold." House Speaker Nancy Pelosi (D-CA)
and Senate Majority Leader Harry Reid (D-NV) have openly expressed
their desire to work with President Bush to pass an
economic package aimed at buttressing consumer
confidence and
avoiding
a recession. "We want to work
with the president in a bipartisan
way to
develop a fiscal stimulus package" that is "timely,
targeted,
and temporary," Pelosi said in a
statement yesterday after
meeting with Federal Reserve Chairman Ben Bernanke. The Fed
Chairman, who has signaled his plans
to cut interest rates by a half percentage point
at the end of the
month, reportedly told Pelosi that some stimulus
is needed, a shift from
last week when he said his thoughts on a fiscal stimulus were "inchoate."
Both the administration and Congress appear to agree on the need for
immediate action. Treasury Secretary Henry Paulson said any stimulus
package should
be put into effect
swiftly, and House Financial
Services Committee Chairman Barney
Frank (D-MA) added that any stimulus package has to "get
money into the
economy quickly."
CURRENT
STATE OF ECONOMY: With
plummeting
home sales, oil
near
$100 a barrel, and slowing
employment,
the current economic environment is perilous for a growing number of
Americans. "We begin the new year with America's economy in the worst
shape and
the middle class at
its most uncertain since the
days immediately
following 9/11," said Sen. Charles Schumer (D-NY). A Labor Department
report last month showed the nation's
unemployment rate jumped to five percent, a
two-year high. "Sales at U.S.
retailers stalled in
December, capping the
weakest holiday shopping season
in five
years." Additionally, economists at Goldman
Sachs, Merrill
Lynch, and Morgan
Stanley have said the United
States is probably slipping
into a recession. "With signs of economic stress abounding, Bush's
approval for handling
the economy was 33 percent,"
compared with 36 percent in November.
A new Washington Post/ABC News poll reports that "concern about the
economy has jumped
to the front of voters' minds as
optimism about the nation's direction has dipped to its lowest point in
more than a decade."
STIMULUS
PLANS: Congressional
leaders are insisting that conservatives not
inject their desire to extend the Bush tax cuts
for the wealthiest
Americans "into negotiations of a short-term rescue
package
intended to dampen the impact of a recession." But some Republicans are
insisting on keeping long-term tax cuts on the table. "[I]t isn't too
soon to talk about making
permanent the Bush tax cuts. ...
I think that has to be part of the
discussion," said Rep. Dave Camp (R-MI). The President is
reportedly "weighing a tax rebate targeted at low- and middle-
income Americans, according to a government official. Bush
probably will
announce the plan in his Jan. 28 State of the
Union speech.
Meanwhile, Democratic leaders in Congress are
designing their own
package, which may include public works spending, aid for the
poor and a tax rebate." Leading Democratic presidential
candidates John
Edwards, Hillary
Clinton, and Barack
Obama have unveiled
stimulus plans of their own. By
contrast, Republican candidates Mitt Romney, John McCain, and Rudy
Giuliani "are
much more skeptical about
short-term government rescues." The
Center for American Progress has recommended that any stimulus plan
adhere to four principles: 1) stem the decline of home values, 2)
ensure the stimulus contains immediate impact, 3) target the benefit to
those recipients most likely to spend it, and 4) strengthen the economy
in short-term ways that inure to America's long-term economic benefit.
SPOTLIGHT
ON MICHIGAN: Today,
voters in Michigan head to the polls in the state's primary
with economic
concerns looming at the
forefront of their minds. Michigan "has
lost about 275,000
industrial jobs since 2000, and has the nation's
highest unemployment
rate, 7.4 percent." Detroit has
been hit by "more
foreclosure filings than any
other city in the one hundred largest
US metropolitan areas." The Big Three U.S. automakers have shed both
white- and blue-collar jobs, and cutbacks from auto suppliers have spread
through other sectors of the
Michigan economy. But as they campaign
in Michigan, most Republican candidates "are
sticking to their existing proposals
for lower taxes and less
regulation," unwilling to propose a larger role for government
intervention to help revive the sagging economy. New York Times
columnist Paul Krugman writes that "recent statements by the candidates
and their surrogates about the economy are
quite revealing." For instance,
Sen. John McCain (R-AZ)
acknowledges, "The issue of economics is not something I've
understood as well as I should."
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"Yale University Monday became the latest high-priced, highly selective private college to reduce tuition for families across a broad range of incomes."
MISSOURI:
Gov. Matt Blunt (R) proposes a plan that would make mortgage fraud a
state
felony.
MARYLAND:
Baltimore finds that the subprime mortgage crisis hurts women in
particular.
CALIFORNIA:
State's independent budget analyst says Gov. Arnold
Schwarzenegger's (R) call for across-the-board spending cuts
is
"misguided."
THINK
PROGRESS: White House Press
Secretary Dana Perino falsely claims
President Bush has never expressed "anything but support" for the
intelligence community's findings on Iran.
EDITOR
& PUBLISHER: New York
Times news article contradicts claim on
Iraq in column by Bill Kristol on the same day.
GLENN
GREENWALD: Conservative claims
of "judicial activism" are usually
made with little understanding of the legal issues involved.
"I've
not heard the President
express anything but support for the intelligence community."
-- White House Press Secretary Dana Perino, 1/14/08
VERSUS
"He told the Israelis that he can't control what the intelligence
community says, but that [the National Intelligence Estimates]
conclusions don't reflect
his own views" about Iran's nuclear weapons program.
-- Senior administration official, 1/08







