The US Congress was expected yesterday to pass a US$789 billion economic stimulus package that is aimed at unleashing large spending and tax cuts to help dig the economy out of a 14-month recession.
The US’ Democratic-controlled House of Representatives and Senate are expected to approve the emergency package, giving US President Barack Obama a political victory, but falling short of his goal of broad Republican backing.
The president has urged Congress to pass the stimulus bill before the end of the upcoming holiday weekend so he can sign it into law. Its goal is to create or save 3.5 million jobs in an economy that has seen massive job losses since the recession began in December 2007.
Obama, meanwhile, delivered what has become a daily call for congressional action, this time from the industrial heartland of the US at a Caterpillar Inc plant in East Peoria, Illinois. His message was blunted when the company’s chairman warned that it may be up to a year before the program has a positive impact the economy.
“It is time for Congress to act, and I hope they act in a bipartisan fashion,” Obama said, arguing his plan would unleash a wave of construction, innovation and job growth once he signed it into law.
“It’s about giving people a way to make a living, support their families and live out their dreams,” Obama said. “Americans aren’t looking for a handout. They just want to work.”
“When they finally pass our plan, I believe it will be a major step forward on our path to economic recovery,” Obama said on Thursday.
Obama said that the company’s chief executive told him that he could rehire some of the employees that have been laid off once the stimulus plan was approved.
Most Republicans opposed the stimulus plans Democrats put forward, saying they expanded government spending too much and did not include enough tax cuts.
The final package includes US$507 billion in spending and money for social programs like the Medicaid health insurance program, as well as US$282 billion in tax cuts that include small tax incentives to spur home and automobile sales as well as business tax deductions.
Senators Susan Collins, Olympia Snowe and Arlen Specter agreed to back the legislation if it was pared down to below US$800 billion. To achieve that, one cut was tens of billions of dollars from grants to help states plug growing budget gaps.
Still, the measure includes US$8.4 billion for public transportation and US$9.3 billion for Amtrak and high-speed rail services.