Pace University's Lubin School of Business
THE VICE PRESIDENT: Thank you very much, Mr. Secretary. (Applause.) Gov, as the old saying goes, you've forgotten more about New York than I'm going to know, although I lived awhile in Upstate New York. I went to Syracuse University. But I can tell you if there's one group of people who are not intimidated by "nobody messes with Joe," it's New Yorkers. (Laughter.)
I want to thank you, Mr. Secretary. And I want to thank the business leaders that have joined us here today with first-hand knowledge of how our economy, our policies -- and how it's affecting them, what impact it's having on the areas they're involved in. And I want to thank all of you for joining us. Mr. President, thanks for the hospitality. And the students that are here -- welcome, I'm delighted you're able to be here, as well as the Dean, who -- as of the business school, is very interested in what we're about to do.
And, look, we came into office a few months ago, and the economic climate I think is fair to say was somewhat bleak. This is the deepest recession we've faced since the Great Depression, and it was getting deeper every day: cases of credit -- crisis in credit, as well as the crisis in confidence in the imploding housing market; job losses that have been averaging about 600,000 or more jobs a month; a feeling of general uncertainty, and a sinking feeling for average families all over America, all across this country from big cities to small rural areas. So we acted. And quite frankly, we had no choice -- no choice but to act.
We confronted this crisis head on, and we did it by implementing a comprehensive strategy to stabilize the key sectors that are behind the down turn, while investing deeply in trying to jump start jobs and investments, particularly -- not only in big cities, but also in rural America, in small towns.
And our strategy rested upon a few very important pillars, Gov. The first was a financial rescue plan to get banks back on sound footing so they can start lending again. That's a process. It's been a difficult process, but it's beginning to have an effect. And the plan was to stabilize the housing market, which isn't -- we still have foreclosures. We know there are going to be more foreclosures. But we're trying to keep responsible homeowners in their homes, and keeping mortgages affordable for middle-class people and first-time homebuyers -- as we're going to hear a little bit from Joe.
The budget we submitted seeks to create a widespread, long-term, long-lasting prosperity; making historic investments in health care, alternative energy, and education while cutting the deficit in half. How many of you have said, or heard people say, hey, Obama-Biden, why don't you just focus on getting us out of this recovery -- I mean, getting us out of the economic mess we're in?
Well, folks, tell me how we're going to lead the 21st century without a fundamental change in our energy policy? Tell me how we're going to do it with costs of premiums of health care escalating 54 percent over the last seven years without gaining control of that? Tell me how we're going to do it without revamping American education? We don't have a choice in our view. That's why we submitted the robust budget we submitted. And, of course, we also came forward with what we're going to talk about today, the American Recovery and Reinvestment Act, an initial big jolt to give the economy a real head start.
But some criticism -- we've not gotten enough money out so far. Well, look, since I was the guy put in charge of it, I want to make sure these first hundred days we do it right. The one thing that could undermine this whole effort is if you had read stories the last hundred days about how this money was being wasted and the tens of billions of dollars.
And you're going to see things start to really change in the second hundred days -- got a $126 billion out. It's now going to take the governors and the county executives and the mayors a little bit of time. Why? Particularly, infrastructure stuff -- they're letting in contracts. Those contracts are now going to come back in. People are starting. We don't start to pay them until they start to -- until they actually get things going here.
You're going to see the next hundred days with some real pace on the ball, no pun intended. You're going to see this thing begin to move. And at least one, in the Recovery Act, is, as I said, the pillar we want to focus on today. The act created -- was created to serve three specific purposes. The first and fundamental purpose was -- kind of goes unnoticed, but has a difficult -- the impact is difficult to measure with precision, but it was to provide badly needed relief to individual families who are devastated by this recession.
As the Deputy Secretary mentioned, our Making Work Pay program gives 95 percent in America an $800 tax break. They're getting somewhere between around $60 a month more on their paycheck, less withholding. Now, with a lot of people that's not a lot of money. But guess what. Neighborhoods I come from, that makes the difference for people.
We're also out there not only trying to help with their family budgets, we're helping those that lost their job during this down turn by dramatically, as the Governor can tell you, expanding unemployment insurance program, increasing the actual benefit by $100, expanding eligibility; also, improving COBRA. That's the deal. You all know what COBRA is, but the average American may not be aware of all these acronyms. It means being able to, when you've lost your job, keep your insurance.
We've been doing that so that they can keep their health care insurance, and so while families are unemployed, they're still able, at a reduced cost, to keep that insurance; and to provide for retirees. Retirees are getting slammed. They're particularly vulnerable during the recession, and we provided an extra payment of $250 to Social Security recipients and to veterans to help them weather this economic crisis.
But guess what that means. That's a lot of money out there. That's hundreds of billions of dollars over the period of this act. That means they're going in and they're buying their groceries; they're buying shoes; they're getting their hair cut; they're actually doing things that put all that money back into the economy while helping themselves.
The second fundamental goal of the act was to give a boost to the struggling states. And, by the way, states have been hit by this worldwide recession. They've been hit very badly. They don't have the options the federal government has in this down turn. Twenty-three states including New York, plus Puerto Rico, have qualified for education stabilization funds to help the states meet education costs and give them budget relief.
You don't have to look too far to see the impact, because the Recovery Act impact right here in the city of New York was able to keep 14,000 New York public school teachers who otherwise would have lost their jobs on the payroll. Now, that's not just helping them keep their job. I don't know what the numbers are -- the school could probably tell me -- but the numbers are real. That means class size is not increasing by 10, or 20, or 30 percent; whatever the number is relative to the number of teachers that would have been lost. It's a big deal.
States also are benefiting from an increase in Medicaid funding, and that's the public health insurance, as you all know. But a lot of people who are on Medicaid are not sure what it is, particularly young people. It's for low-income families, which is even more necessary in hard times. It's billions of dollars. To date, the states have received $18.8 billion to help up to 20 million more Americans get coverage that they now qualify for -- because they are poor, because they're in trouble -- to keep the health care that is absolutely necessary for them.
And the third goal of this Recovery Act is to make a major investment in projects that are going to create jobs that are going to build a foundation, a foundation for the 21st century. How many times have you heard the President say, and I think it's true -- and I'm here with a bunch of very sophisticated business people -- this next growth in our economy can't be built on another bubble. We've been through two of those bubbles, the dot come bubble and the housing bubble. We cannot lead the world in the 21st century unless we build a new foundation to be able to compete. And so this will not do it, but this makes down payments.
As Secretary Wolin said, there's $4.5 billion in tax benefits for businesses leveraged to produce jobs. Already state and local governments have issued over $10 billion in bonds to fix schools, roads, and transit facilities. The SBA has made $600 million in loans so far, in the first hundred days.
And here's the important part -- that's not a lot of money, but of those $600 million in loans, there are over 600 small-town banks who hadn't made a loan since 2007 or 2008 that are making a loan. It makes a difference in towns where First Federal of Maquoketa, Iowa, is actually making a loan to be able to keep that local restaurant open; actually make a loan to keep that dress shop around. This is a big deal in a lot of places. And it's loosening -- loosening credit, because we're guaranteeing up to 90 percent some of those loans
In addition, we've approved more than -- approved so far, signed off on more than 3,800 highways, roads, bridges, airport constructions, and repair projects in 53 different states. You don't see that -- the effect of that yet. That's the stuff that's being contracted out. The governor is going to have people out there laying this asphalt, pouring this concrete.
I was up in northern Wisconsin at a bus factory. An awful lot of folks out there are taking their local money and the state money, and they're buying new buses or clean technology, because we're focusing on it. It's employing an awful lot of people at a living wage, a wage they can live a middle-class life on. This has a ripple effect throughout the country.
This isn't just about smoother pavement and new bridges; it's about State [sic] Hill Constructors, a New York construction company who was able to rehire laid-off seasonal employees after winning contracts for some of the road projects the governor mentioned; it's about a highway in Illinois, dotted with potholes, being repaved by 120 new workers. And guess what. They're being paid a decent wage. This is about middle-class standards we are focusing on, as well; it's about $1.5 million to $2 million the contractor spent on that project. What does that affect? He had to go out and buy more earth-movers. He had to go out and buy more Caterpillar pavers, profiling machines, rollers, other equipment. That keeps somebody hired at the Caterpillar factory, or someone not laid off, maybe even re-hired.
This is about the thousands, literally, thousands of stories like this I've heard all -- I haven't heard thousands, but I've heard scores of them all around the country; shovels going into the ground, money going back into the economy, workers heading back to their jobs even in the face of rising unemployment.
We've also approved $2.9 billion in money, as I referenced by -- obliquely from the SBA. The administration loans have supported $4 billion in lending to small business. It's a leveraging impact. It's real.
And so, look, where we are now is that we -- we've already announced $38 billion in new spending to develop, commercialize -- and renewable energy sources that will be the foundation of our new economy.
I've been out there in the Midwest. There are -- a new windmill farm. Were it not for our investment in clean energy, they wouldn't be building those 100 new windmills. So guess what I did. I went to a small factory that was around, hired the UAW work there, means they get a decent wage and guess what, they're the ones out there preparing the transformers for these operations. These have over 800 parts -- 8,000 parts. We're trying to bring an industry here to the United States.
Why in God's name when we're -- and, by the way, we announced a new windmill farm off the state of Delaware. New Jersey has from none to now four major petitions in -- New York, and a lot of other states up and down this West Coast -- I mean, excuse me, East Coast as well as the West Coast. We're talking about spurring a new industry of renewable energy that's going to make a fundamental difference; not only in our climate; not only in our environment, but also in providing jobs that can't be exported.
It sounds fancy, but I've seen what it means for real families and small businesses across the country. I saw at ABB Inc., in Missouri -- they're an electrical transformer factory, and because of a new wind farm project of a hundred new windmills that couldn't have been funded without this act, new orders are up dramatically. They are able to keep people hired at a decent wage.
You're going to hear a little bit about this, because an outfit out in Chicago I went to see if -- I don't mind mentioning a competitor here to one of our folks, Serious Windows in Chicago, where because of increased demand for high-energy windows, they're able to reopen several shuttered factories, re-hire some 200 workers that were laid off by the previous manufacturer, and hire them into multiple states. They went out and bought Republic.
And it's happening here in New York too. The New York State Veteran's Home at St. Alban's Jamaica, New York, is installing more efficient motors, variable speed drive units, lighting, ballasts, lighting sensors, daylight sensors and replacing incandescent bulbs with compact fluorescent bulbs. All of these things actually provide a job, decent jobs for people; they improve energy efficiency, reducing the cost of manning and running those facilities; they lower cost across the board; and they lessen the impact of energy consumption on our environment.
And here in New York, the Recovery Act is allowing the weatherization of public housing projects as it is all over the country. Not only are we lowering heating and cooling bills for vulnerable families, but, in the process, we're leaving men and women with jobs from the projects. We're spending $500 million on re-training jobs. So our goal here is to get -- there are over 1.8 million young men and women in those projects qualified to do these jobs. We want to re-hire them, hire them and train them to do these weatherization jobs and give them a skill they can work with, so they end up having a permanent job.
Look, we're trying to lay a foundation for a new century -- not to -- not make-work jobs. And, on top of all of that, I think we're helping the environment. Everywhere I go, I see it with my own eyes -- like energy-efficiency and high-speed rail, relatively small amounts of recovery dollars will leverage very, very large investments in those areas.
Folks, in all, we're building a secure economic future. We're investing heavily today. We're going to build an economy for tomorrow. It's been a little more than a hundred days since the President signed the act, and while this is not the ultimate solution for our problems, we also know that it's a historic investment -- an investment in the American people and an investment in American business.
We've obligated, in the first 100 days, $126 billion -- $9.1 billion here in New York. We've created more than 150,000 jobs thus far, and we've helped more than a thousand communities and tribes in every state and territory.
And, with some solid hints of stabilization in key markets, including housing, we may be starting to see some of the fruits of this investment. Most forecasters believe that GDP will turn positive by the end of this year, meaning recovery will soon replace recession. And, vitally important, a recent survey has shown that consumer confidence is rising; two-thirds of the respondents saying that the Recovery Act will help the overall economy; and half of them saying the act will help their personal financial situation.
All said, our administration understands we have a long, long way to go and plenty of work left to do. We know the American economy will not fully be up and running until we see robust growth in jobs, decent jobs, providing working families with a stable and dependable income.
And here is where we believe the Recovery Act can have its greatest impact. The goal is to save 3.5 million jobs by the end of next year. By now, only 100-plus days in, people are at work in every single state in the nation who would not have been at work but for this act, and providing product that is worthwhile in and of itself.
In the end, we know that recovery isn't just a compilation of statistics, and whether the GDP is growing, it's a broad quilt stretching all across America, designed for the sole purpose of making life better for communities and real working families everywhere.
And, the truth is we're just getting started. We've just gotten out of the box. We realize this act is only one piece of a major puzzle, but it's certainly an important piece. And what we've done so far is a real testament to America's vast capacity to create real progress in just over a hundred days. And it gives me great hope that the next hundred days and beyond will even have more speed on it. We'll see more impact as we begin to spend out -- the states spend out these monies.
Oliver Wendell Holmes said, the great thing in the world is not so much where you stand, as in what direction you're moving.
Ladies and gentlemen, I think we're moving in the right direction. I want you to hear from this panel, and I want to hear from you. Thank you, all, for being here --particularly you, Governor. It's a great honor to share this podium with you. So why don't we get started. Thank you all very much. (Applause.)