The $819 billion economic stimulus package President Obama hopes to sign into law by Presidents’ Day has been met with skepticism in St. Clair County.

Congressman Spencer Bachus (AL-6) who voted against the package said, “Borrowing and spending is what got us into this problem, and more borrowing and spending will not get us out of it. This so-called ‘stimulus’ bill contains twice as much spending as the New Deal. That was over ten years. This is one bill.”

Looking at the basic of (H.R. 1: the American Recovery and Reinvestment Act of 2009.

According to the Congressional Budget Office (CBO) analysis, the total estimated cost of the proposal is $819 billion over ten years. The money allocated is around $604 billion of extra spending, plus $215 billion in less money collected in taxes than planned. (These numbers may change.) In the CBO report about 1/7th of the spending will occur in the current fiscal year with a greater amount reaching the economy in 2012.

A wageworker should begin to see an increase in take-home pay of around $12 a week. This is as a result of lower taxes on Federal withholding promised by Mr. Obama during his presidential campaign. For the growing ranks of unemployed the stimulus package effects will be more noticeable with unemployment benefits set to expire being extended along with an approximate $25 weekly increase. Also those receiving food stamps will see an uptick in their monthly allowance of around $80 more per family of four.

In a statement issued after the House vote, Mr. Obama said “There are many numbers in this plan, but out of all these numbers, there is one that matters most to me: This recovery plan will save or create more than 3 million new jobs over the next few years.”

Again, Alabama Congressman Bachus sees a different reality from the Obama Administration. “This ‘stimulus’, unfortunately, is heavy on government debt and spending, and light on actual job creation,” said Bachus.

Much has been made of the pork barrel spending within the bill but there are significant areas worth noting. The follow are projects with a projected $10 billion or more price tag:



$20.0 billion to increase the maximum benefit under the Supplemental Nutrition Assurance Program (Food Stamps)

$18.5 billion for energy efficiency and renewable energy programs

$20.4 billion for programs administered by the Department of Health and Human Services

$20.0 billion to renovate elementary and secondary schools

$17.6 billion for Pell grants and other student financial assistance at post-secondary institutions

$29.1 billion for other elementary and secondary educational programs

$30.0 billion for highway construction

$13.1 billion for other transportation programs

$11.2 billion for housing assistance programs administered by HUD

$19.5 billion for education grants to states

$27.1 billion for increase unemployment benefits

$13.3 billion to increase health insurance for unemployed workers

$11.1 billion for “Other Unemployment Compensation”

$20.2 billion for Medicaid and Medicare incentive payments to encourage providers to improve healthcare IT

“Rather than focusing on job-creating tax cuts, this bill has turned into a grab-bag that will cost every American household almost $7,000. Across-the-board tax cuts will allow small businesses and working families to spend, save, and invest more of their own money, said Congressman Bachus.

One of the mayor concerns among local business leaders has been the oversight of such programs.

“I hope that they are going to put more accountability in this program than they did in the last program,” said Don Perry, President of Metro Bank.

The last round of government infusion of capital in banks and other entities is known as, The Troubled Asset Relief Program (TARP) is was designed as a program to allow the United States government to purchase assets and equity from financial institutions in order to strengthen the financial sector. The largest component of TARP was to address the subprime mortgage crisis of 2008.

However a congressional review panel concluded on January 9, 2009: “In particular, the Panel sees no evidence that Treasury has used TARP funds to support the housing market by avoiding preventable foreclosures”. The panel also stated, “Although half the money has not yet been received by the banks, hundreds of billions of dollars have been injected into the marketplace with no demonstrable effects on lending.”

Perry said that Metro Bank did not apply for any funds under the TRAP program and would not seek any this round. “The banking crisis that is talked about in the media has not affected us, we are not that kind of bank, we are a conservative community based organization.” Perry said. He also stated that Metro Bank never involved in exotic financial instruments like mortgage back securities.

With a 60 percent market share in Pell City, Metro Bank is on secure foot according to Perry. They are also opening a new branch in Moody with more expansion to come. But like many business people Perry express concern over the mounting Federal debt and the burden that will be placed on American taxpayers.

As for accountability according to The Wall Street Journal an estimated $54 billion will go to federal programs that have low accountability rating by internal government audits.



Local real state developer and civic leader Dick Whatley, recalled the first rollout of the recovery programs of the Depression ear, “To this day we do not know if the WPA and other programs helped in the recovery of the country [from the Depression],” said Whatley.

The Work Projects Administration; created by Franklin Delano Roosevelt was the largest New Deal agency, employing millions of people and affecting most every area in the United States, especially rural and western mountain populations. While the program created many jobs for American workers, economists are still at odds as to the programs success. “I do hope the new stimulus bill will be successful,” said Whatley, “But no one really knows.”

One area that most analysts do agree the stimulus package will have an impact is on the state level (see, Shovel Ready article in this issue).

The $87 billion increase in federal contribution for state Medicaid costs is expected to go far in aiding states close their burgeoning budget gaps.

More than a few citizens and business leaders are concerned that hundreds of Billions of dollars will be going to welfare programs that do not create jobs.

In a recent statement U.S. Senator Richard Shelby, (R-AL) said, “In my judgment, this package will not stimulate our ailing economy, it will grow our already massive debt. In attempting to spend our way to prosperity, our children and grandchildren pay the price. Rather, I believe we need to get our priorities straight and first attack the source of the problem – the toxic assets on banks’ balance sheets – in order to stabilize our financial system and get credit flowing again. We must then turn in earnest to reforming the regulation of our financial system to prevent this from happening again. I believe that restoring stability and trust and promoting transparency will do more for our economy than any stimulus package ever has or ever will.

The final out come of the debate in Washington and St. Clair County is still uncertain as the bill is pasted to the U.S. Senate.