Obama’s Stimulus: Pray for a Miracle This Christmas and Beyond

Barack Obama’s economic stimulus will have to work wonders to even make a dent in this lousy economy. The rate of existing home sales plunged a record 8.6% in November.  Unemployment is getting higher, shops are closing, the Christmas retail season may turn out to be a disaster, the auto unions will fight to preserve their pay even if that means bankruptcy for their industry and….  Well, you know the rest.

But Barack “The One” Obama has hired Pastor Rick Warren to pray at the inauguration and his prayer better be a good one….

In this  Saturday Dec. 20, 2008, file photo, Evangelical Pastor ... 
Rick Warren: Looking to heaven and to the economic numbers…
(AP Photo/Hector Mata, File)

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Will The Obama Stimulus Work fast Enough?

By JEANNINE AVERSA and ANDREW TAYLOR, Associated Press Writers

President-elect Barack Obama‘s plan for economic revival puts a big emphasis on public works projects. It also would rely on tax cuts.

But with the nation bruised by recession, with hundreds of thousands of jobs vanishing monthly, Obama’s plan raises an urgent question: Will his remedies work fast enough?

The answer won’t be clear for months or longer. In the meantime, pressure on the Obama team to deliver help quickly is intensifying.

At least as designed, the Obama plan, like a calibrated drug regimen, aims to deliver both short- and long-term relief.

The short-term help would flow partly from tax cuts of $1,000 for couples and $500 for individuals, costing about $140 billion over 2009-2010. The Obama team, said two congressional Democratic aides familiar with the discussions, will likely deliver those tax cuts by reducing the tax withheld from paychecks.

This would put more money in paychecks, unlike the lump-sum rebates issued earlier this year. Many people used those rebates to pay down debt, rather than spending them as the administration had hoped.

In addition, states would get up to $200 billion over two years for Medicaid health coverage for the poor and to narrow state budget gaps, which are forcing layoffs and cuts in services. The aides spoke on condition of anonymity to candidly discuss the evolving plan.

Also in the short term, the nation’s governors are pushing a wish list of $136 billion in jobs-producing public works projects — chiefly road and bridge repairs — that they say are ready to go.

But even if they are, the Obama administration faces a much harder task, too: creating jobs that won’t disappear once a bridge is fixed. What’s needed are millions of permanent jobs that would put legions of laid-off people back to work for years to come.

It’s too soon to know whether many of the 2.5 million jobs the president-elect has said he intends to “save or create” within his first two years would become permanent. And with economic signs worsening, Obama wants to raise the goal to 3 million jobs, a presidential transition official said.

Related:
Will Obama Help? Labor Seeks to Renegotiate Auto Bailout

Obama’s Stimulus Plan Compared to other Government Programs

Read the rest:
http://news.yahoo.com/s/ap/20081224/ap_
on_bi_ge/obama_economic_revival

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