Washington: President Barack Obama got read on Tuesday to sign his huge stimulus bill with a flourish meant to be a rare bright moment for the ailing US economy, and to confront a punishing wave of foreclosures.
The president will sign the $787 billion stimulus bill, which passed Congress last week, in Denver, Colorado, where he raised the hopes of millions by accepting the Democratic nomination in 2008.
He will first tour a solar panel installation project in a bid to show how billions of dollars for alternative energy included in the stimulus package could launch a new generation economy.
The new bill aims to create or preserve 3.5 million jobs, many of them so-called “green jobs,” as the country confronts its highest unemployment rate in 16 years standing in January at 7.6%.
Roughly one-third of the stimulus funds will be spent on tax cuts, totaling $286 billion, in an effort to boost consumer spending, a key engine of the world’s largest economy.
But a further $120 billion is being allocated to “shovel-ready” infrastructure projects, for such things as transportation, road-building, improving the power grid and renewable energy installations.
Obama’s senior White House aide David Axelrod told National Public Radio late Monday that “75% of what we’ve appropriated here will spend out in the first 18 months after the bill is signed, but some of these infrastructure projects will extend beyond the two years.
“And I think that’s going to benefit our economy, because I don’t think we’re going to be out of the woods completely in two years, and this is a good hedge against that.”
But there has been Republican anger at the size of the package, and the bill was pushed through Congress only after a bruising battle and largely without the party’s support.
A “Buy American” clause contained in the deal has been particularly targeted, with a former aide to ex-president George W. Bush warning it would undermine efforts to revive the ailing global economy.
“We can’t get the global economy back on a path to growth if each country pursues its domestic recovery in a manner that disadvantages others or seeks to disrupt global supply chains,” Dan Price said.
Obama was also to learn more about how the auto industry, one of the pillars of the US economy, plans to ride out the economic downturn which has slashed sales and brought the Big Three carmakers to their knees.
General Motors and Chrysler must report to the Treasury by the end of the day on their restructuring plans, a condition of a $17.4-billion auto industry bailout funded by taxpayers.
Given the magnitude of the task, the White House decided against appointing a single “car czar” to oversee the industry’s painful restructuring, instead forming a presidential task force to steer the mammoth undertaking.
On Wednesday, Obama will set course for Arizona to mine a new seam of heartland support for his economic rescue plans where he will unveil a plan to tackle the country’s mortgage foreclosure crisis.
The initiative comes after two US banks -- JPMorgan Chase and Citigroup -- and mortgage finance giants Fannie Mae and Freddie Mac agreed last week to suspend the devastating home foreclosures, which triggered the economic crisis.
The idea is to help homeowners before they get in trouble and avoid thousands of foreclosures which are hammering the already debt-laden balance sheets of the finance industry.
Along with moratoriums, other possible ideas being floated would help homeowners write down annual mortgage repayments to about one-third of their salary.
Treasury Secretary Timothy Geithner last week unveiled a plan that could use as much as $2.5 trillion to aid banks, unfreeze consumer credit markets and stem the home mortgage crisis.
But with nearly 10,000 families a day reportedly losing their homes, only a sketchy public-private investment fund was cited under Geithner’s plan to buy up mortgage-backed securities held by banks.