Date: 3/3/2009
By STEPHEN OHLEMACHER
Associated Press Writer
WASHINGTON (AP) — White House Budget Director Peter Orszag on Tuesday defended President Barack Obama’s $3.6 trillion federal budget and its proposal to raise taxes on more affluent Americans.
“We have lived through an era of irresponsibility,” Orszag told the House Budget Committee. “Looking forward, we must change course.”
Lawmakers in both parties have questioned Obama’s call to reduce high-income earners’ tax deductions for the interest on their house payments and for charitable contributions. Also drawing fire is his proposal to start taxing industries on their greenhouse gas pollution — a move sure to raise consumers’ electric rates.
Obama’s budget plan drew fire from a senior Republican, who called it the biggest expansion of government since President Franklin D. Roosevelt’s New Deal. Wisconsin Republican Paul Ryan told Orszag that administration claims of deficit-cutting are mostly bogus since the deficit would fall anyway as the war in Iraq winds down.
Ryan also warned that tax increases on small businesses earning more than $250,000 a year would stunt a possible recovery and that the plan would double the national debt in eight years.
Obama dispatched both Orszag and Treasury Secretary Timothy Geithner to Capitol Hill to defend the budget, with its proposed tax increases and the whopping $1.7 trillion annual budget deficit it would generate for 2009.
Geithner was to appear before the tax-writing House Ways and Means Committee.
Obama and his top aides have been promoting the budget package since unveiling an outline last week, but Tuesday provided lawmakers their first opportunity to publicly question top officials over details.
The one-year budget deficit for 2009 is 12.3 percent of the nation’s gross domestic product. That’s up from 3.2 percent in 2008 and the highest since 1945.
Orszag acknowledged the sheer enormity of the projected deficit. But, he told the Budget Committee, it would be “worse if we failed to act.”
Obama’s budget faces a difficult path through Congress because of its many controversial proposals on health care, taxes and global warming.
Meanwhile, Federal Reserve Chairman Ben Bernanke was generally supportive of Obama’s efforts to stimulate the economy.
Bernanke, who was appointed to the top Fed job in 2006 by then-President George W. Bush, told the Senate Budget Committee that Obama’s recently enacted $787 billion stimulus package of increased federal spending and tax cuts should help revive consumer spending, boost factory production and “mitigate the overall loss of employment and income that would otherwise occur.”
Still, the Fed chief warned that the timing and magnitude of the impact of the stimulus package is subject to “considerable uncertainty, reflecting both the state of economic knowledge and the unusual economic circumstances that we face.”
The Fed chief found himself challenged over the need for the government’s new $30 billion lifeline for ailing insurance giant American International Group. The latest plan, announced Monday, marked the government’s fourth effort to stabilize AIG.
“I share your anger,” Bernanke said. But he said the government had little choice but to take the action because the collapse of the insurance company would further rock the nation’s weakened economy.
Bernanke testified that an economic recovery depends on the government’s ability to stabilize weak financial markets.
The economy was taking another hit a day after the Dow Jones Industrial Average plunged below 7,000 for the first time since 1997.
An early rebound on Tuesday gave way to another round of selling by midday.
Obama insists he would impose higher taxes only on the wealthiest. Republicans, however, say Obama’s energy proposal amounts to a tax that would increase energy costs for all Americans.
“This massive hidden energy tax is going to work its way through every aspect of American life,” said Rep. Dave Camp of Michigan, the top Republican on the Ways and Means Committee. “How we light our homes, heat our homes and pay for the gas in our cars, in every phase of our daily lives, we will be paying higher costs.”
Obama wants to reduce the emissions blamed for global warming by auctioning off carbon pollution permits. The proposal, known as cap and trade, is projected to raise $646 billion over 10 years.
Most of the money would be used to pay for Obama’s “Making Work Pay” tax credit, which provides up to $400 a year to individuals and $800 a year to couples. The plan also would raise money for clean-fuel technologies, such as solar and wind power.
Orszag acknowledged that the energy proposal would increase costs for consumers, but he argues that the vast majority of consumers will get tax breaks elsewhere in Obama’s budget package.
Copyright 2009 The Associated Press.
States face competing priorities for stimulus cash
Date: 2/16/2009
By BETH FOUHY
Associated Press Writer
NEW YORK (AP) — It may sound like a nice problem for states — figuring out how to spend the billions in infrastructure funding they’ll receive as part of President Barack Obama’s economic stimulus plan.
But the task is more complicated than it seems, as state officials try to set priorities while managing competing pressures from communities, watchdog groups and federal regulators over how the money is allocated.
Under the plan Obama is expected to sign into law early this week, states will divide $27 billion to build and repair roads and bridges. That is less than half the $64 billion in projects states told the American Association of State Highway and Transportation Officials late last year that they had ready to go.
The law also requires that half the money be spent on projects that have been vetted by the federal government and deemed “ready to go” in 120 days, as a way to jolt the economy and create jobs. That means state officials are under pressure to make decisions quickly on which projects to fund and which to bypass.
While many states have made their lists of “ready-to-go” infrastructure projects available online for public review, others have resisted, in part because the limited stimulus funding means only a fraction of the projects will receive money. Watchdog groups say it’s likely that state officials fear angering constituents if a project appears on a wish list and then is struck from the final allocation.
“There will be huge internal battles in states about priorities,” said Phineas Baxandall of the Public Interest Research Group.
In California, for example, Gov. Arnold Schwarzenegger’s office rejected a request by The Associated Press for a detailed list of “ready-to-go” projects. The AP sought the information under the California Public Records Act, but the governor’s office last week said the documents were internal drafts, adding “disclosure would chill critical communications to and within the Governor’s Office, thereby harming the public interest.”
The sheer volume of money directed toward state projects has fueled calls for transparency, with journalists, interest groups and others demanding a full accounting of which projects receive the funding, which are rejected, and why.
Massachusetts Gov. Deval Patrick addressed that sentiment last week when he named a local real estate developer to oversee bidding for the stimulus money. Patrick also set up a new Web site with information on every project that receives the money.
“I don’t want to send a mistaken impression there are pet projects,” Patrick said.
The governor appeared with the state’s attorney general, Martha Coakley, who also will help track the stimulus funds.
“An ounce of prevention in handling the money is worth a pound of grand jury investigations and civil litigation down the road,” Coakley said.
Mindful of the accelerated timetable they face, states are moving quickly to develop mechanisms for identifying priority projects and disbursing funding for them.
Some have created oversight commissions while others are leaving decisions to state transit officials. Some are required by law to involve state legislators, while legislators in states that don’t require their participation are pressing to have input.
Ohio Gov. Ted Strickland, a Democrat, has retained a former U.S. diplomat as a temporary, unpaid “infrastructure czar.” But the Republican-controlled Senate, concerned that Strickland could try to push stimulus funding through the state’s Controlling Board instead of through the legislature, has drawn up a separate “spending blueprint” for the federal stimulus money.
Alabama Gov. Bob Riley, a Republican, has hired two former state finance officials to oversee the stimulus money. New Hampshire Gov. John Lynch, a Democrat, tapped a former attorney general to manage the funds, while Wisconsin Democratic Gov. Jim Doyle established a state Office of Recovery and Reinvestment led by the president of a local electric utility and a vice chancellor of the University of Wisconsin.
In Virginia, Gov. Tim Kaine, a Democrat, is taking a grass-roots approach, setting up a Web site seeking input from residents, local governments and community groups as to how the money should be spent. Nearly 600 suggestions poured in on the first day alone, state officials said.
In Colorado, 11 transportation commissioners will determine which projects to fund, in part based on recommendations from local governments and city planners around the state. No vote of the legislature is needed to spend the money.
Legislative input also is not required in Maine, but state lawmakers have pressed for involvement and Democratic Gov. John Baldacci says he will seek their guidance. He plans to present a plan for spending the stimulus so that legislative leaders can review it.
Montana’s constitution requires that the state legislature appropriate all spending. Lawmakers there are trying to determine whether to go through the normal appropriations process or accelerate it in some way.
The state’s governor, Democrat Brian Schweitzer, told the AP that lawmakers are likely to make changes to the $3 billion list of projects the state has identified as eligible for the stimulus money.
Gov. M. Jodi Rell of Connecticut, a Republican, created a working group of municipal officials, business leaders, legislators and state agencies to determine the final list of projects.
“The task before us now, ” said Rell, “is to identify the projects that will do the most to get people back to work, get our economy moving again and position us for success when the national business climate improves.”
___
Associated Press writers Michael Tarm, Tom Verdin, Steve LeBlanc, Phillip Rawls, Norma Love, Scott Bauer, Susan Haigh, Jean McNair, Colleen Slevin, Glenn Adams, Matt Gouras and Stephen Majors contributed to this report.
Copyright 2009 The Associated Press.
By BETH FOUHY
Associated Press Writer
NEW YORK (AP) — It may sound like a nice problem for states — figuring out how to spend the billions in infrastructure funding they’ll receive as part of President Barack Obama’s economic stimulus plan.
But the task is more complicated than it seems, as state officials try to set priorities while managing competing pressures from communities, watchdog groups and federal regulators over how the money is allocated.
Under the plan Obama is expected to sign into law early this week, states will divide $27 billion to build and repair roads and bridges. That is less than half the $64 billion in projects states told the American Association of State Highway and Transportation Officials late last year that they had ready to go.
The law also requires that half the money be spent on projects that have been vetted by the federal government and deemed “ready to go” in 120 days, as a way to jolt the economy and create jobs. That means state officials are under pressure to make decisions quickly on which projects to fund and which to bypass.
While many states have made their lists of “ready-to-go” infrastructure projects available online for public review, others have resisted, in part because the limited stimulus funding means only a fraction of the projects will receive money. Watchdog groups say it’s likely that state officials fear angering constituents if a project appears on a wish list and then is struck from the final allocation.
“There will be huge internal battles in states about priorities,” said Phineas Baxandall of the Public Interest Research Group.
In California, for example, Gov. Arnold Schwarzenegger’s office rejected a request by The Associated Press for a detailed list of “ready-to-go” projects. The AP sought the information under the California Public Records Act, but the governor’s office last week said the documents were internal drafts, adding “disclosure would chill critical communications to and within the Governor’s Office, thereby harming the public interest.”
The sheer volume of money directed toward state projects has fueled calls for transparency, with journalists, interest groups and others demanding a full accounting of which projects receive the funding, which are rejected, and why.
Massachusetts Gov. Deval Patrick addressed that sentiment last week when he named a local real estate developer to oversee bidding for the stimulus money. Patrick also set up a new Web site with information on every project that receives the money.
“I don’t want to send a mistaken impression there are pet projects,” Patrick said.
The governor appeared with the state’s attorney general, Martha Coakley, who also will help track the stimulus funds.
“An ounce of prevention in handling the money is worth a pound of grand jury investigations and civil litigation down the road,” Coakley said.
Mindful of the accelerated timetable they face, states are moving quickly to develop mechanisms for identifying priority projects and disbursing funding for them.
Some have created oversight commissions while others are leaving decisions to state transit officials. Some are required by law to involve state legislators, while legislators in states that don’t require their participation are pressing to have input.
Ohio Gov. Ted Strickland, a Democrat, has retained a former U.S. diplomat as a temporary, unpaid “infrastructure czar.” But the Republican-controlled Senate, concerned that Strickland could try to push stimulus funding through the state’s Controlling Board instead of through the legislature, has drawn up a separate “spending blueprint” for the federal stimulus money.
Alabama Gov. Bob Riley, a Republican, has hired two former state finance officials to oversee the stimulus money. New Hampshire Gov. John Lynch, a Democrat, tapped a former attorney general to manage the funds, while Wisconsin Democratic Gov. Jim Doyle established a state Office of Recovery and Reinvestment led by the president of a local electric utility and a vice chancellor of the University of Wisconsin.
In Virginia, Gov. Tim Kaine, a Democrat, is taking a grass-roots approach, setting up a Web site seeking input from residents, local governments and community groups as to how the money should be spent. Nearly 600 suggestions poured in on the first day alone, state officials said.
In Colorado, 11 transportation commissioners will determine which projects to fund, in part based on recommendations from local governments and city planners around the state. No vote of the legislature is needed to spend the money.
Legislative input also is not required in Maine, but state lawmakers have pressed for involvement and Democratic Gov. John Baldacci says he will seek their guidance. He plans to present a plan for spending the stimulus so that legislative leaders can review it.
Montana’s constitution requires that the state legislature appropriate all spending. Lawmakers there are trying to determine whether to go through the normal appropriations process or accelerate it in some way.
The state’s governor, Democrat Brian Schweitzer, told the AP that lawmakers are likely to make changes to the $3 billion list of projects the state has identified as eligible for the stimulus money.
Gov. M. Jodi Rell of Connecticut, a Republican, created a working group of municipal officials, business leaders, legislators and state agencies to determine the final list of projects.
“The task before us now, ” said Rell, “is to identify the projects that will do the most to get people back to work, get our economy moving again and position us for success when the national business climate improves.”
___
Associated Press writers Michael Tarm, Tom Verdin, Steve LeBlanc, Phillip Rawls, Norma Love, Scott Bauer, Susan Haigh, Jean McNair, Colleen Slevin, Glenn Adams, Matt Gouras and Stephen Majors contributed to this report.
Copyright 2009 The Associated Press.
