Congress Approves Economic Recovery Act

Press Release

CONGRESS APPROVES ECONOMIC RECOVERY ACT
Measure Intended to Save Jobs & Help Those Who've Been Hurt by the Recession, Obey Says

Today, Congress approved the American Recovery and Reinvestment Act (H.R. 1). As Chairman of the House Appropriations Committee, Seventh District Congressman Dave Obey (D-WI) was one of the lead authors of this, the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jumpstart our economy, and begin the process of transforming it for the 21st century.

"America faces the greatest crisis that we've seen in terms of our economy since the 1930's. We've had a virtual collapse and freeze up of the financial system and the credit markets. We've had a collapse of the housing sector in the economy and the auto sector of the economy. Consumer purchasing power is in decline, in the last four months the country has lost 2 million jobs and we are expected to lose another 3 to 5 million in the next year," Obey said. "Conservative economist Mark Zandi put it bluntly: ‘the economy is shutting down.'"

"We hope that, with the passage of this proposal, we can mitigate that disaster to a significant degree and change the country for the better," Obey added, noting that the Recovery Act:

1. provides American families an $800 tax cut in order to try to put some money in people's pockets
2. attempts to jump-start job creation through infrastructure investments in roads, bridges, sewers, water repair, modernizing our electric power grid and expanding broadband access so all parts of the country have an opportunity to compete with internet access;
3. attempts to show some mercy to those who are most impacted by the recession, who are losing their jobs, their health insurance and losing the ability to send their kids to college;
4. tries to modernize the economy to create new jobs through science and technology; and
5. attempts to save jobs by stabilizing state and local budgets. Because of the economic collapse, states face the prospect of huge deficits. Without help from the federal government they will be forced to impose major tax increases and devastating service cutbacks, including laying off teachers, firefighters and police officers, which under these economic conditions would be hugely counterproductive.

Christina Romer, Chair of the Council of Economic Advisers, has estimated that the recovery package will save or create 3.5 million jobs over the next two years, including 70,000 in Wisconsin. "To ensure that we maximize the number of jobs created, the Recovery Alan has unprecedented accountability measures built in - providing strong oversight, and a high degree of public transparency," Obey added.

But Obey warned that "The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we're warned that unemployment could explode to near eleven percent. With passage of this package, we will face a large deficit for years to come. Without it, those deficits will be devastating and we face the risk of economic chaos. Tough choices have been made in this legislation and fiscal discipline will demand more tough choices in years to come."

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