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Economic Recovery Plan

While I have reservations about the legislation and its impact on our national debt, it is important that Congress take bold and aggressive action to revitalize our economy and help the millions of Americans who are struggling to pay for basic necessities such as food, housing, and health care. Many people, through no fault of their own, have lost their jobs, their homes, and their healthcare. Unemployment ranges from approximately 8.3 percent in Menominee County to 24.2 percent in Mackinac County. Michigan has the nation’s highest unemployment rate at 10.6 percent. In addition, Northern Michigan timber, mining, and manufacturing industries have been hit hard by the economic crisis leaving no alternative outside of federal action to jump start the economy.

In my travels across Northern Michigan I hear from people who are frustrated and want action. They want their government to address their concerns and recognize their struggles in this deepening economic crisis. We must pull together to rebuild our economic engine and our nation’s future.

The alternatives proposed by Republicans in Congress follow the same policies of the past eight years that created our current economic crisis. It is important that action be taken quickly to begin our economic recovery. The last time the federal government stood by and did nothing when America faced an economic crisis of this magnitude, it resulted in the Great Depression.

On February 13, 2009, the U.S. House of Representatives voted 287 to 183 on the conference report for H.R. 1, the American Recovery and Reinvestment Act. I voted for this legislation because it invests in America and our middle class at a time when unemployment is at a 30-year high. Later the same day, the U.S. Senate passed the conference report and sent it to President Obama. The President signed the legislation into law on February 17, 2009.

The legislation provides strict rules in how the targeted funding will be spent and includes a number of reporting requirements to ensure Congress maintains proper oversight and accountability. A majority of the funding provided under the recovery package must be obligated within the coming months and cannot be diverted to unrelated programs. To improve transparency and accountability of how taxpayer money will be spent, all contracts, grants, and awards, along with the names of the program managers who will distribute funds, will be posted on a website created by the Obama Administration, www.recovery.gov.

The economic recovery package did not contain any funding to provide family planning services and did not spend $200 million to fix the National Mall. There are no member earmarks and no direct funding is provided to the Association of Community Organizations for Reform Now (ACORN). The legislation has protections built in to prevent illegal immigrants from receiving any benefits and does not mandate universal healthcare coverage by the federal government.

The economic recovery package provides $787 billion in funding for building roads, bridges, and water infrastructure, extends unemployment benefits, increases food stamps, expands broadband access, provides tax cuts for the middle class, makes education more affordable, assists workers displaced by our trade agreements, modernizes our energy infrastructure, and maintains healthcare coverage for Americans who have lost their jobs. In essence, two-thirds of the $787 billion goes to spending and one-third for tax cuts.

Unlike the Wall Street bailout bill, which I twice voted against, the American Recovery and Reinvestment Act targets its investments in our country, creates jobs and assists working families.

The recovery package will make long-term investments into our national infrastructure, which has been neglected for too long. A total of $54 billion will be spent on rebuilding our highways, roads and bridges. An additional $39.5 billion in funding is included to rehabilitate, repair, and modernize our nation’s schools and prevent cut-backs and lay-offs of school staff. Approximately $23.3 billion in loan guarantees and grants are included for the construction of renewable energy and electric transmission projects to modernize our energy grid.

The legislation included a “Buy American” provision that ensures billions of dollars appropriated for the purchase of raw materials for infrastructure projects are spent to create American jobs. This “Buy America” provision will help our domestic steel industry and, in turn, the Northern Michigan mines that provide the iron ore to produce the steel.

There will also be a significant investment in our nation’s water resources and infrastructure. The package will provide $4.6 billion for rebuilding and maintaining our nation’s ports and waterways. The Great Lakes waterborne economy is dependent on this federal maintenance of our navigational infrastructure. More than $4 billion in funding is included for the State Revolving Fund which will help communities upgrade their drinking water and wastewater treatment systems. A number of these systems in Northern Michigan are several decades old and are in desperate need of replacement.

The American Recovery and Reinvestment Act will make an investment in our nation’s future by making education more affordable and accessible. Funding is provided to help college students by prohibiting tuition increases while providing $15.6 billion in student loan assistance. It invests in our nation’s children by increasing Head Start funding by $2.1 billion and providing money to states through the State Fiscal Stabilization Fund for educational needs.

The bill also includes more than $7.1 billion for expanding broadband services with more than $2.5 billion specifically targeting rural America. By improving our telecommunications infrastructure, businesses in rural areas such as Northern Michigan can effectively compete in an increasingly globalized market place.

The American Recovery and Reinvestment Act of 2009 will assist workers who lose their jobs due to free trade agreements by increasing funding to the Trade Adjustment Assistance (TAA) program, which provides retraining assistance. H.R. 1 expands this coverage to workers negatively affected by trade with countries like China and Korea by doubling the retraining money. In 2008, more than 14,000 Michigan workers were certified for training assistance and many more displaced workers will receive assistance with this increased funding.

H.R. 1 invests in health care for working families by providing funding to state governments to help unemployed workers maintain their health insurance coverage for up to nine months if they lost their job between September 1, 2008 and December 31, 2009. It will protect health care coverage for millions of Americans by providing $86.5 billion in additional federal matching funds to help states maintain their Medicaid programs. It will also help low-income families by increasing food stamp benefits for more than 31 million Americans, half of whom are children.

The American Recovery and Reinvestment Act provides more than $275 billion in tax cuts for 95 percent of American workers. The “Make Work Pay” tax cut will reduce federal withholding tax from workers’ paychecks beginning early this spring. This tax cut is phased out for individuals who earn more than $75,000. First-time home buyers who bought their homes between January 1st and November 30, 2009 will receive an $8,000 tax credit, which will strengthen the housing market.

The legislation includes a number of business tax credits designed to spur investment and employment. These tax credits, such as the extension of small business expensing, allows a write-off capital expenditures, net operating losses, and tax incentives for businesses that hire unemployed veterans and young people.

The recovery package will also help our U.S. automakers by providing $2 billion in funding for loans and grants toward the development of advanced vehicle batteries and battery systems. These batteries are required to be made in the United States. This investment will allow our domestic industry to transition to next generation hybrid vehicles and plug-in electric vehicles, which will reduce our dependency on foreign oil. Strengthening the auto industry is essential because millions of middle class American jobs and retiree pensions and benefits depend on a vibrant domestic auto industry.

The 3 to 4 million jobs envisioned in this package will not provide all 11 million unemployed Americans a job today, but it does provide the hope of a brighter future. The economic struggles facing American families every day were created over a number of years by mismanagement on Wall Street, policies that helped the wealthy at the expense of the middle class, and abuses in corporate America. Our economic struggles will not be solved in the weeks and months ahead just by this economic package alone. Working with President Obama, our country must still address the credit and housing crises and hold government and corporate officials accountable.

While the legislation is not perfect and there would be a number of things I would change for an economic recovery package, it is focused on investing in America, creating jobs, and protecting our middle class. According to President Obama’s National Economic Council, 6,900 jobs will be created or saved in Northern Michigan alone. While H.R. 1 contains no earmarks, funding will be distributed based on existing formulas to the state of Michigan and federal agencies. I expect a number of Northern Michigan projects to receive funding.