Taking stock of Obama's stimulus package: Part I
Published January 07, 2009 @ 09:31AM PT
There's lots more talk than detail available about Obama's proposed stimulus plan: The American Recovery and Reinvestment Act. What we do know is that 40% of the proposed $700b-$1T price tag would go to questionable corporate and personal tax breaks, $77B would be for unemployment benefits, and the ~$400-600b remainder would be "government spending." So how much of that spending is on proven anti-poverty programs?
Setting aside the discussion on infrastructure investments and job creation for another post, proven programs can be considered "in-kind" initiatives such as food stamps, housing subsidies, and Medicaid. One of the problems with anti-poverty policy in this country that's beyond the scope of this post is that the bulk of it is administered by the states, meaning the states set their own eligibility criteria and spend within balanced budget requirements. This leads to cuts to social programs during economic downturns, and the disparities between generous states like NY and punitive states like Louisiana.
The $$$$ to watch are the unemployment benefits and the "aid to states" figures. So far it sounds like $80-$100 billion of the stimulus would go to states for Medicaid coverage. This is not enough to restore cuts in most places, but rather just softens the blow for low-income households relying on state-provided healthcare.
Food stamp use is at record numbers, yet there's no formal line item for food stamp provision in the stimulus plan. The presumption is that state aid would also cover food stamp programs, in addition to job training programs and infrastructure investments. (Please note who is asking for aid in those "blue state" links versus this "red state" one.) Another important "ask" to watch for from the states is for rental assistance to households, especially for low-income and those at risk of foreclosure.
Many progressives outlets and non-profit anti-poverty advocates are pushing for spending on food stamps, rental assistance, and Medicaid coverage. The reality is that the number of Americans living in severe poverty - on less than $5,000 per year for individuals and less than $10,000 a year for families - has risen 24% under Bush. Unemployment benefits will not reach these households if no one is working; it's questionable whether Congress will manage to push through an extension of benefits to part-time workers.
That's why funding these other social programs beyond unemployment insurance is so critical - The above graph shows the economic returns to food stamps compared to unemployment insurance and tax breaks. When you contact your elected officials about passing this stimulus package, what allocations will you demand?
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Comments (8)
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Author
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Leigh is a PhD candidate in urban planning at MIT, and a consultant on U.S. Gulf Coast recovery. She sits on the Board of the Allston-Brighton Community Development Corporation in Boston, and has worked with non-profits, foundations and local governments on policies and programs aimed at reducing urban poverty and inequality.
Featured Poverty in America Actions
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Repeal the Hyde Amendment!
88 People
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Repeal the Hyde Amendment!
that the criteria for benefits be looked in adifferent form. there are people the do not have childrens that received injuries on the jobs,lost jobs and one spouse works and do not qualify for food stamps for this reason. to look at the out going of income as well as the amount that is received. are just qualify people on the bases that they are unemployed and has a lost of income and not tell people that has worked hard all there lives sell what you have worked for and then reapply.
Posted by artie polk on 01/12/2009 @ 06:17PM PT
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There needs to be more innovative plans to address poverty. State can distribute allocation to local goverments which can give Kiva type low interest microloans for coop type self-created jobs and local businesses, sustainable farms, solar power and such where money can be reinvested locally and jobs and income will circulate locally.
Posted by Susmita Barua on 01/21/2009 @ 01:44PM PT
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Obama’s stimulus plan should also envision changing regulations & economic policies to have short-term & long-term effects on unemployment, middle-class and the market stability. Strengthening the middle class and creating more job opportunities should be the primary objective of the package, rather than handing the blank check to the Wall Street and failed big corporations.
Posted by David Dzidzikashv... on 01/23/2009 @ 01:59PM PT
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I THINK THERE NEEDS TO BE A LOAN OPERATION THROUGH THE GOVERMENT FOR PEOPLE IN FORCLOSER!! not give the money but a long term loan with little or no interest to pay the bank to get you out of foreclosure and point pay down to make house payments cheaper then if you sign on for the loan you pay back small long payments or when the house sell they get there money first!!
Posted by steve martin on 01/24/2009 @ 09:42PM PT
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The bank bailout is separate from the stimulus (a mistake to introduce them simultaneously) and needs to be a corrective to the kind of financial misbehavior that got us in this current trouble. See the following for details:
http://www.pbs.org/moyers/journal/02132009/watch.html
http://counterpunch.org/hudson02122009.html
http://www.democracynow.org/2009/2/13/robert_kuttner_and_michael_hudson_on
The bottom line: Unless we get this one right, then a new Obama will be creating a new oligarchy. The happy talk about "change you can believe in" will be supplanted by stern reminders that we need to pay our debts... you know, just like the folks in Argentina and Indonesia, etc.
Posted by Adam Eran on 02/15/2009 @ 08:09PM PT
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BTW, notice that on all of "Change.org" there is no separate topic for this bailout, even though it far exceeds the S&L travesty. At the time, the S&L Bailout was the largest political and financial scandal in U.S. history -- another tribute to "Reaganomics" -- exceeding by orders of magnitude scandals like Teapot Dome or Credit Mobilier.
One historian's take on the S&L bailout:
"The S&L story is desperately important not for the reasons usually given but because its development, maturity and crisis raise profound questions about American society. In the light of this bonfire, we must ask whether our great professions are still capable of self-regulation, of giving honest service, and of accepting fiduciary duties in an age when all costs and benefits are reduced to monetary measurements and all conduct that is not specifically prohibited has become permissible. Watching the obedient dance of our officials and politicians when their patrons pipe a tune, unrebuked by a public that attends this show as it might any other, we must ask whether this generation of Americans remains capable of self- government." --from Martin Mayer's THE GREATEST-EVER BANK ROBBERY The Collapse of the Savings and Loan Industry
Posted by Adam Eran on 02/15/2009 @ 08:12PM PT
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The bailout is nothing more than opening our wallets to let the government spend according to the political self-interest of the politicians.
This bailout at best encourages only temporary consumption. It won't help the poor at all in the long run. No cash stimulus ever has.
Only business tax reduction will stimulate investment. The Dow would go up instantly. People's wealth would improve. Spending would start again.
Right now the market hates the plan. And the more they see, the worse the financial situation gets.
Like it or not, you morons need to interpret this correctly.
All systems are built on how self interest is exercised. Is political self interest more noble and healthy than financial self interest? The bailout will allow our masters to spend our money on their political self interest. Happy now? Stick around and watch it get worse.
Posted by Bob Cannan on 02/17/2009 @ 09:59AM PT
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Knock off the name calling, Bob.
Posted by Leigh Graham on 02/17/2009 @ 10:54AM PT
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