President Barack Obama took office in January 2009 facing the country's biggest economic crisis since the Second World War. Obama and Democratic Party leaders have suggested an economic stimulus package to confront the crisis. This package, they say, will save or create over three million U.S. jobs and provide most Americans with tax cuts. In the longer term, Obama says his plan will stimulate vital sectors of the economy such as energy and health care, making U.S. firms more competitive internationally. When Democratic lawmakers first introduced stimulus legislation in early 2009, they presented a bill with a price tag of $825 billion, though many analysts say the total cost of the plan will likely increase as it makes its way through Congress. The package comes amidst a global wave of stimulus spending, and if it succeeds in pulling the U.S. economy from recession, economists say, the positive impact could be felt around the world. Yet experts also see a number of ways the plan could go wrong. Some encourage targeted, temporary spending measures and say lawmakers should take budgetary concerns into consideration. Doing too little to solve the financial crisis could prove calamitous, they say, but legislative overreach could also have serious consequences.
Obama’s Stimulus Plan
Obama's plan aims to stimulate employment, certain critical economic sectors, and U.S. consumer spending. It specifies $550 billion in spending on new projects and $275 billion in tax cuts. The initial plan (PDF) includes investments for:
- Energy, including $32 billion to transform the U.S. energy grid to make it more efficient; $16 billion to repair public housing and make it more energy efficient; and $6 billion to weatherize low-income homes;
- Science and technology, including $10 billion for new scientific facilities and $6 billion to improve broadband...