America is facing the most serious economic crisis since the Great Depression. We’ve lost 3.6 million jobs since the recession began in December 2007, including 600,000 in the last month alone. The situation is particularly severe in California, with an unemployment rate that has nearly doubled in the last year, soaring to 9.3 percent. California leads the nation in foreclosures and our state budget, always a problem, is even worse off as revenues have plummeted. As the economy has slowed, more families are turning to state and local government for assistance.
Clearly, this recession is bad and getting worse. Economists across the spectrum agree that fast action by the federal government is critical for putting people back to work and getting our economy moving again. That’s exactly what the newly passed economic recovery legislation, the American Recovery and Reinvestment Act (HR 1), is intended to do.
Working closely with President Obama, Congress developed legislation that is a carefully calibrated mix of targeted tax cuts and investments in infrastructure, education, energy and health care that will put money in people’s pockets right away and create jobs fast. The intent is not only to restore the strength of our economy in the short-term but to lay the foundation for long-term economic growth.
Here are a few of the most important features of the bill:
» $500-$1,000 tax cuts for 95 percent of American workers. These targeted tax breaks will help middle-class families struggling in these challenging economic times.
» More than $100 billion in transportation infrastructure investments, so we can finally rebuild some of our worst roads and most dangerous bridges. We will also invest significantly in public transportation and alternative transportation, like bike paths, light rail, and clean-energy buses that run on natural gas or electricity.
» Nearly $8 billion in aid to the state of California to help it address its huge budget deficits. This economic crisis is devastating for states and local communities — particularly California — facing deep cuts to education, law enforcement, health care and other critical services.
» Programs to weatherize more than 75 percent of federal buildings and improve the energy efficiency of 2 million homes, saving consumers and taxpayers billions on our energy bills. Our proposal also doubles America’s renewable energy-generating capacity over three years.
» The package also contains a series of provisions to help families and communities that have been hurt by this economic downturn, including training workers and helping them find jobs. It also extends unemployment benefits for more than 500,000 Californians, and increases food-stamp benefits for 2.4 million Californians. Not only will these steps provide relief to American families, they will help jumpstart our economy: these funds will be spent quickly, creating jobs and spurring economic growth.
There are a few points to note about this economic recovery proposal. First, the tax cuts are temporary and targeted to encourage consumer spending and to ensure that these dollars are put back in the economy right away. And they aren’t going to the wealthiest among us, like so many of the tax cuts did in the last eight years. Second, about 75 percent of the spending will take place within the next 18 months to ensure we start putting people back to work right away. And third, many of these investments are intended not only to save or create 3 million to 4 million jobs, but also to help us meet some long-term challenges facing our country.
The energy initiatives are a perfect example of this forward-thinking approach. The bill funds jobs in weatherization programs to make our houses and schools more energy-efficient. It also creates jobs with a plan to upgrade our electricity grid so it can carry energy more efficiently and from different sources, like wind farms. And it gives support to alternative-energy companies that will hire workers to expand the use of wind, solar and other forms of clean, renewable energy. The end result will be some 500,000 jobs created, reducing energy bills for millions of Americans, and increasing the production of clean energy created here in America. In addition, the use of fewer fossil fuels from foreign sources will increase our national security and protect our environment. This is all pretty common-sense stuff and we should have been doing it years ago.
Some of my Republican colleagues have attacked the cost of our economic recovery plan and offered up their own ideas. I guess it’s good that they have rediscovered fiscal responsibility after having blindly supported President George W. Bush’s reckless economic policies, which doubled the national debt in the last eight years. But more important is what the plan’s opponents are offering as an alternative — basically, more tax cuts. Essentially, more of the same snake-oil economics that put us in this mess in the first place.
My Republican colleagues have to recognize that we are in a recession — a huge recession. We are losing tens of thousands of jobs every week. Virtually every economist, even Mark Zandi, a former economic adviser for Sen. John McCain’s presidential campaign, has said immediate and bold action, including large spending by the federal government, is required to stop the slide.
We need to work together to meet this crisis, Republicans and Democrats and Independents. As we craft policies, however, to bring our economy back to life, it’s important to remember that this recession didn’t “just happen.” It is the result of economic policies willfully pursued for some time — and with special vigor over the last eight years — that wishfully proclaimed tax cuts mostly benefiting the wealthy and relentless deregulation were the solution to every economic problem. We are now paying the price for that failed strategy with a doubling of the national debt since 2000, increased income disparity, a crashing housing market, decimated retirement savings, millions of jobs lost, and small businesses hard pressed to get loans to expand or even survive.
It’s important that we not repeat the same mistakes that got us in this mess in the first place, and that we start moving this country in a new direction. The American Recovery and Reinvestment Act will help us take those critical steps.
Rep Lois Capps, D-Santa Barbara, represents Santa Barbara County’s South Coast in the 23rd Congressional District.