Archive for Sunday, June 13, 2010

Obama pleads for $50B in state, local aid

June 13, 2010


— President Barack Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.

In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s freefall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party.

The letter comes as rising concern about the national debt is undermining congressional support for additional spending to bolster the economy. Many economists say more spending could help bring down persistently high unemployment, but with Republicans making an issue of the record deficits run up during the recession, many Democratic lawmakers are eager to turn off the stimulus tap.

“I think there is spending fatigue,” House Majority Leader Steny Hoyer, D-Md., said recently. “It’s tough in both houses to get votes.”

Democrats, particularly in the House, have voted for politically costly initiatives at Obama’s insistence, most notably health care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.

Last month, the House stripped Obama’s request for $24 billion in state aid from a bill that also would extend emergency benefits for jobless workers. Senate Majority Leader Harry Reid, D-Nev., has said he hopes to restore that funding, but with debate in that chamber set to resume this week, Democrats say they have yet to assemble the votes for final passage. And neither chamber has mustered support for another Obama priority: $23 billion to avert the layoffs of as many as 300,000 public school teachers.

Senior Democratic aides said the White House is partially at fault because it has not made additional spending on the economy a clear priority.

In recent weeks, the White House has appeared more intent on cutting spending — calling for the sale of vacant buildings, threatening to veto a defense bill over a jet engine project the Pentagon views as unnecessary and urging every agency to come up with a list of low-priority programs for elimination. Obama has also proposed a three-year freeze in discretionary spending unrelated to national security, an idea endorsed by leaders of both parties at a meeting at the White House last week, according to White House chief of staff Rahm Emanuel.

With the letter, however, Obama makes a direct and unequivocal case for additional “targeted investments,” including state aid and several less-expensive initiatives aimed at assisting small businesses, and he asks lawmakers to be patient on the deficit.

“It is essential that we continue to explore additional measures to spur job creation and build momentum toward recovery, even as we establish a path to long-term fiscal discipline,” Obama wrote. “At this critical moment, we cannot afford to slide backwards just as our recovery is taking hold.”


jmadison 7 years, 11 months ago

Remember the money you earn is not yours, its Obama's and the SEIU's.

jaywalker 7 years, 11 months ago

Ummm...Mr. President? Any chance you've heard or read the Prime Minister of Japan's recent speech to his countrymen? Printing money is an unsustainable, self-destroying prophecy, sir.

Someone needs to give the CIC a little slap in the back of the head and yell in his ear: "Wake UP!!!"

Victor Dawson 7 years, 11 months ago

What would you offer as a plan? Let's not fund teachers and public workers. Matter of fact let's reverse all of the bailouts. How many people would be out of work in and already down employment market. Smart, right? Well, of course because government isn't in our business. YEAH! You can win for losing with some people! Tax the wealthy people are upset, try to give everyone a chance at health care and people are upset, try to fix bank regulations and people are upset! Too much whining and not alot or any solutions from the peanut gallery. Why is it when a good idea comes from the right or the left, it has no chance of passing in Congress or the Senate? Because we, as a people, enjoy whining and give our opinion without any actions. I support our President and he has some of the best minds working on some of the toughest issues we've seen in a long time. When will we all stop this whining and join together as AMERICANS!

Richard Heckler 7 years, 11 months ago


The beginning banks, the first nine, the big banks, they all got their money one day after a meeting with Henry Paulson, in which he told them, “You’re taking this money.” But after that, the process was much more convoluted. And some banks lobbied for the money.

Other banks didn’t lobby for the money but were told they were taking it. It all—what we basically concluded early on, that there was really no plan to this at all. While Treasury said that the purpose was to get credit flowing back into the system, the fact of the matter is, the way they went about this made no sense at all.

JAMES STEELE: Paulson actually called that meeting. He called the heads of those banks the night before and said, “I want you here tomorrow in Washington.” He was very vague as to what the purpose of the meeting was. But once they got there, he told them, “You are taking money. We are going to buy stock in your banks. And we need to get this economy going again.”

Some bankers objected, saying by accepting this money it would look like they were weak. Others simply said they didn’t need it.

The fact of the matter is, one of the things we concluded very early on in this whole process is that while Treasury was trying to create the image that there was widespread weakness in these banks—and then there was a credit freeze, there’s no doubt about that—the way they went about this, just throwing the money out there in hopes that that would get the economy going, is not really what this was all about.

There were just a handful of institutions that were terribly weakened. AIG the insurer, Bank of America, Citigroup, those three were clearly in very weakened form. So, many of the other big banks were not.

AMY GOODMAN: Don Barlett, this meeting of the big nine, with Vikram Pandit of Citigroup, Jamie Dimon of JPMorgan Chase, Kenneth Lewis of Bank of America, Richard Kovacevich of Wells Fargo, John Thain of Merrill Lynch, John Mack of Morgan Stanley, Lloyd Blankfein, who succeeded Paulson as head of Goldman Sachs, Robert Kelly of the Bank of New York Mellon and Ronald Logue of State Street Bank, went to the secretary’s conference room. It was even difficult to find this information out. But what did he lay out for them there? And how does Paulson, who was former head of one of these banks, fit into it, as well?

DONALD BARLETT: Well, reduced to its simplest terms, he laid in front of them, each of them, a sheet of paper and saying, “Write on this the amount of money you’re going to take, and you are going to take it. Otherwise,” the implication was, “regulators will be looking at you and finding something wrong there. This is one of those areas in which you have no choice. By the end of the day, you will sign that you’re taking this amount of money. You know, call your boards, do whatever you need to do, but you will take the money.”

Victor Dawson 7 years, 11 months ago

NO! Ford didn't have to take the money because their CEO had a better plan.

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