Economy -- Recovery In Progress

May 28, 2009

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, and Ryan Powers

ECONOMY

Recovery In Progress

One hundred days ago, President Obama signed the American Recovery and Reinvestment Act (ARRA), a bill designed to jump-start the economy and put Americans back to work. Yesterday, Obama sounded a cautiously optimistic note when speaking about ARRA in Las Vegas. "From where we stand today, the road to economic recovery is still long. ... But after four months of this administration and one hundred days of the Recovery Act, we have carved out a path toward progress," Obama said. According to Recovery.gov, $31.1 billion of the $787 billion package has been spent thus far. Yesterday, White House officials Jared Bernstein and Rob Nabors said that most of the released funds have been spent in the form of middle-class tax cuts, unemployment benefits and food stamps, and federal assistance to states to stop Medicaid cuts. The Congressional Budget Office (CBO) says the rate of expenditure is "consistent with the assumptions" of the CBO and that "ARRA will boost the level of GDP by the end of this year by between 1.4 percent and 3.8 percent." Although only a small percentage of the recovery funds have been spent so far, the results have helped slow the continued hemorrhaging of the economy.

EARLY SUCCESSES: Data released yesterday showed that consumer confidence jumped to 54.9 in May, the highest since last September. While states are indeed continuing to slash budgets, the recovery package has allowed some states to forgo making crippling cuts in jobs and services. Alabama, for example, plans to keep 3,800 teachers whose jobs were in jeopardy, knowing that stimulus money will be arriving. Funds are allowing Virginia to reduce planned cuts to state colleges from $296 million to roughly $170 million and will help prevent the shuttering of centers serving persons with mental health needs. The much lauded infrastructure investments have also begun. In all, the stimulus package has created or saved nearly 7,700 transportation and infrastructure jobs as of the end of last month, according to a congressional report. "Last year was rough, and this year was looking like it wasn't going to be any better," said Ed Shirk of Sunrise Safety, which works on projects in Maryland. "Now it's a very good spring." Yesterday, the White House released "100 Days, 100 Projects," a report touting the 150,000 jobs saved or created so far because of stimulus funds.

LOCAL CHALLENGES: A major challenge in the successful implementation of ARRA is ensuring that states are applying for and spending their allocated money. At a Center for American Progress event last week, Secretary of Education Arne Duncan said that thus far, only 13 states have received their education funding from ARRA. "What's been a little interesting to me is that states have been slow to apply for the money. ... It's really critical to me that states step up to the plate if they haven't applied," he urged. Indeed, several states are still working on getting approval for their recovery funds. "Alaska has made the least progress with just 4 percent of its [transportation] funding approved. States must use at least half of their money by June 30, or they risk losing it," Pro Publica noted. Virginia has yet to send the Transportation Department its list of road projects. And while ARRA has reportedly created 150,000 jobs nationwide, "no jobs have been created in 17 states, including South Carolina, which has the second-highest unemployment rate in the country." With roughly 46 states (most prominently California) now facing severe budget crises, efforts by "moderates" like Sen. Susan Collins (R-ME) to strip funding for aid to states were clearly short-sighted and limited the effectiveness of the package, as many had argued at the time. "The federal aid is enough to close roughly 30-40 percent of state budget shortfalls," the Center on Budget and Policy Priorities noted.

RIGHT-WING GAMES: Conservative politicians continue to play political games with the recovery money. Last week, South Carolina state lawmakers required Gov. Mark Sanford (R) -- who has waged a war with the Obama administration over the recovery funds -- to seek the stimulus cash he has blocked for months. "Sanford doesn't believe a federal deadline looms for him to seek $700 million in stimulus money for struggling schools," according to his spokesman. Alaska Gov. Sarah Palin (R) has signed her state's new budget but vetoed $80 million in recovery funds, including the rejection of funding for energy conservation. Palin is the only governor to reject the funds for energy conservation. To be sure, the state will still do "very well when it comes to the Recovery Act," taking in an estimated $1.3 to $1.5 billion. Furthermore, this week, hundreds of Louisianans protested Gov. Bobby Jindal's (R) refusal of roughly $98 million in federal unemployment benefits for his state. Jindal claims the funds would lead to "higher taxes for businesses." Not surprisingly, Republican members of Congress have been traversing the country touting the success of stimulus projects they voted against.

RADICAL RIGHT -- ROVE ATTACKS SOTOMAYOR, CALLS HER A 'SCHOOLMARM,' SAYS SHE'S 'NOT NECESSARILY' SMART: During a debate at Radio City Music Hall in New York on Wednesday, host Charlie Rose said Supreme Court nominee Judge Sonia Sotomayor "is very smart." "Not necessarily," former Bush adviser Karl Rove replied. After Rose noted that Sotomayor graduated with honors from Princeton and attended Yale Law School, Rove said, "I know lots of stupid people who went to Ivy League schools." Rove's claim is ironic considering that in an interview previewing the debate, he cited President Bush's experience at Harvard and Yale to mock claims that Bush is stupid. "The myth was that this guy, who was a Yale history grad and a Harvard MBA, was not smart," Rove told the Chicago Tribune. And on Fox News Wednesday, Rove offered another demeaning and subtly-sexist putdown of Sotomayor. Rove complained to host Greta Van Susteren that Sotomayor pays too much attention to grammar and claimed that she's "sort of a schoolmarm." "I was talking to people about the Second court of appeals. ...What she would do is she would mark them up like she was your English school teacher and -- with your typos and misspellings and other words that she wanted to have changed and send it back to her colleagues. Not exactly the best way to ingratiate yourself with your colleagues," Rove said.

"The average family with health insurance shells out an extra $1,000 a year in premiums to pay for health care for the uninsured," a new report by Families USA finds. The group concludes that this "hidden tax" demonstrates the urgency of "extending coverage to all the 50 million Americans who are now uninsured."

Tomorrow, former Presidents Bill Clinton and George W. Bush will "appear together in Toronto for what is being billed a 'conversation.'" The former Presidents "will join in a 90-minute discussion moderated by Frank McKenna, a former Canadian ambassador to the United States, followed by a 30-minute question-and-answer session."

Judge Sotomayor "has never directly ruled on whether the Constitution protects a woman's right to an abortion" in her eleven years on the federal bench. When she has "written opinions that touched tangentially on abortion disputes, she has reached outcomes in some cases that were favorable to abortion opponents."

Public reaction to the nomination of Judge Sonia Sotomayor for the Supreme Court has been "decidedly more positive than negative, with 47 percent rating the nomination as 'excellent' or 'good'" and 20 percent rating it "only fair." Though Gallup found that the public reacted more positively than negatively to the last four Supreme Court nominees, Sotomayor had the second highest the net positive rating.

Secretary of State Hillary Clinton rebuffed Israel on a key Middle East peace negotiating issue yesterday, saying that "the Obama administration wants a complete halt in the growth of Jewish settlements in Palestinian territory, with no exceptions." President Obama "wants to see a stop to settlements -- not some settlements, not outposts, not natural-growth exceptions," Clinton said.

Yesterday, in what one minister called "a declaration of war" on gay marriage, a group of ministers and gay marriage opponents "formally requested a citywide referendum yesterday to block the District [of Columbia] from recognizing gay marriages performed in other jurisdictions." The group, Stand 4 Marriage D.C., will need 21,000 signatures to overturn the D.C. Council bill recognizing same-sex marriages performed in other states.

A USA Today review found that, "with little exception," the $4 billion in federal stimulus contracts already awarded "has not reached states where the unemployment rate is highest." For example, "the first contracts have amounted to only about $7.42 per person on average in the eight states with unemployment rates higher than 10%." By contrast, North Dakota -- with the lowest unemployment -- has received about $26 worth of contracts per person.

"President Obama directed his national security adviser and senior Cabinet officials yesterday to examine whether the government keeps too much information secret." Acknowledging "that too many documents have been kept from the public eye for years," Obama tasked Gen. Jim Jones with examining procedures for handling classified information making recommendations about better information sharing.

Senior Obama administration officials "are close to recommending that Congress create a single regulator to oversee the entire banking sector," which would be "a departure from the hodgepodge of federal agencies that failed to contain the financial crisis as it ballooned out of control last year." Other components of the plan "are an agency to police financial products offered to consumers and a beefed-up investor protection regulator."

And finally: Washington, D.C. is abuzz over the news that Bravo will be bringing its popular "Real Housewives" series to the capital. "We're tapping personalities who are among Washington D.C.'s influential players, cultural connoisseurs, fashion sophisticates and philanthropic leaders -- the people who rub elbows with the most prominent people in the country and easily move in the city's diverse political and social circles," said Bravo Media executive VP and GM Frances Berwick.

The Weekly Standard's Michael Goldfarb claims that being discriminated against is a form of "preferential treatment."

FLASHBACK: During his confirmation hearing, Supreme Court Justice Samuel Alito said his family's immigrant experience shaped his judicial outlook.

Why did former CIA director George Tenet create a false record on the day after he quit?

Keep your friends close, and Dennis Ross closer.

How Obama's health care proposal is nothing like Canada's health care system.

Rep. John Culberson's (R-TX) incoherent and illogical stance on gay marriage.

Some conservatives are concerned about Judge Sonia Sotomayor's appreciation of Puerto Rican cuisine. Really.

Fox's O'Reilly and Beck: We don't know if ACORN has done anything wrong -- but whatever it is, it's huge!

"[U]nderstand that sometimes when you work hard, there are still some folks who hang on to some old, dying, rather rotting ways that have less to do with your empowerment and more to do with your subjugation, more to do with your stereotype."
-- RNC Chair Michael Steele, 5/12/09

VERSUS

"[Obama] was not vetted, because the press fell in love with the black man running for the office. 'Oh gee, wouldn't it be neat to do that? Gee, wouldn't it make all of our liberal guilt just go away?"
-- Steele, 5/22/09

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