The Political Bridge

Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output as of September 2009(Report issued on 11/20/2009)

 From the Congressional Budget Office

To read the entire report Download 11-30-ARRA

Estimating the law’s overall effects on employment requires a more comprehensive analysis than the recipients’ reports provide. Therefore, looking at the actual amounts spent so far (where identifiable) and estimates of the other effects of ARRA on spending and revenues, CBO has estimated the law’s impact on employment and economic output using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy. On that basis, CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product (GDP) was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA. Those ranges are intended to encompass most economists’ views and to reflect the uncertainty involved in such estimates.

CBO’s current estimates differ only slightly from those CBO prepared in March 2009. At that time, CBO projected that in the third quarter of 2009, U.S. employment would be higher by 600,000 to 1.5 million people with ARRA than it would be without the law, and real GDP would be 1.1 percent to 3.0 percent higher. CBO’s new estimates reflect small revisions to earlier projections of the timing and magnitude of changes to spending and revenues under ARRA. On the one hand, tax cuts through September are now estimated to be roughly $10 billion larger than originally projected (mainly because certain tax changes were carried out more quickly than anticipated); on the other hand, the net change in federal spending as a result of the legislation has turned out to be slightly smaller than CBO initially estimated.

CBO’s current estimates do not reflect any change in the agency’s assessment of the effect that each dollar of spending increase or revenue decrease has on output and employment. Since March, CBO has continued to examine new research on the relationships between changes in government policy and changes in output and employment. To date, that examination has generated no significant change in CBO’s assessment of those relationships. CBO has also examined incoming data on output and employment during the period since ARRA’s enactment. However, those data are not as helpful in determining ARRA’s economic effects as might be supposed, because isolating the effects would require knowing what path the economy would have taken in the absence of the law. Because that path cannot be observed, the new data add only limited information about ARRA’s impact. Economic output and employment in the spring and summer of 2009 were lower than CBO had projected at the beginning of the year. But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects of ARRA.

Highlights Of GAO-10-151, A Report to Congressional Committee: Continued Stewardship Needed as Treasury Develops Strategies for Monitoring and Divesting Financial Interests in Chrysler and GM

November 2009

 Chrysler and GM have made changes since December 2008 to address key challenges to achieving viability, but the ultimate effect of these changes remains to be seen. The companies have eliminated a substantial amount of their long-term debt, reduced the number of brands and models of vehicles they sell, rationalized their dealership networks, and lowered production costs and capacities by reducing the number of factories and employees. It is difficult to fully assess the impact of these changes because of the short amount of time that has passed since reorganization and the low level of new vehicle sales. Moreover, Chrysler and GM are revaluing their assets and liabilities based on their reorganizations in 2009 and expect to prepare financial statements based on this effort in the coming months.

Treasury does not plan to be involved in the day-to-day management of Chrysler and GM, but it plans to monitor the companies’ performance. Treasury developed several principles to guide its role as a shareholder, including the commitment that although Treasury reserves the right to set up-front conditions to protect taxpayers and promote financial stability, Treasury will oversee its financial interests in a hands-off, commercial manner. The conditions that Treasury set for the companies include requiring that a portion of their vehicles be manufactured in the United States and that they report to Treasury on the use of the TARP funding provided. Treasury officials told us that they are also requiring that Chrysler and GM submit financial information on a regular basis and that they plan to meet with the companies’ top management on a regular basis to discuss the companies’ financial condition.

Treasury should make certain that its current approach for monitoring and selling its equity in Chrysler and GM fully addresses all important considerations financial and industry experts identified. For example, Treasury initially hired or consulted with a number of individuals with experience in investment banking or equity analysis to help assess Chrysler’s and GM’s financial condition and develop financing packages for the companies. Many of these individuals have recently left as the restructuring phase of Treasury’s work has been completed. Treasury will need to ensure these staff and any staff that depart in the future are replaced as needed with similarly qualified personnel. Also, Treasury does not currently contract with or employ outside firms with specialty expertise for its work with the auto industry but may need to do so in the future, to make sure sufficient expertise is available to oversee the government’s significant financial interests in Chrysler and GM. In addition, although Treasury officials told us they are considering all options for divesting the government’s ownership interests, including an initial public offering or private sale, they have focused primarily on a series of public offerings for GM and have not identified criteria for determining the optimal time and method to sell. Regardless of the option pursued, however, Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially above what they have been in the past.

To read the entire report Download D10151

NY Times: The White House Data Indicate that Schools Are Where Stimulus Funds Saved Jobs

Most (reported jobs saved by the simulus funds) were teachers’ jobs that states said were saved when stimulus money averted a need for layoffs.

Of course, counting jobs that were saved can be a squishier proposition than counting jobs that were created.  

Indiana, for example, reported saving or creating 13,232 education jobs with its stimulus money, but Cris Johnston, the director of the government efficiency division of the state budget office, said that it was difficult to say whether the state would have actually lost those jobs without the money.

Read More: Click Schools

Gov. Beshear Announces that $800,000 in American Reinvestment and Recovery Act Funds are Now Available to Kentucky’s Farmers

Governor Steve Beshear's Communications Office

Press Release Date:  Wednesday, October 28, 2009  

Contact Information: 

Jay Blanton
Jill Midkiff
502-564-2611  

FRANKFORT, Ky. – Gov. Steve Beshear today announced that $850,000 in American Reinvestment and Recovery Act funds are now available to Kentucky’s farmers on approved energy efficiency cost-share items.

“In September, I announced the awarding of stimulus funds for on-farm energy efficiency improvements to Kentucky,” said Gov. Steve Beshear. “Now, I am pleased to announce that these funds are available for farmers to access for making their operations more energy efficient.”

The energy stimulus incentive program will provide 25 percent reimbursement of the actual cost of a federally qualified energy saving item, up to $10,000.  Permissible items include, but are not limited to, energy audits, energy efficient farm building components, on-farm energy upgrades and on-farm energy efficiency training.  Only expenditures made after Oct. 15, 2009 will be eligible for reimbursement.

“These on-farm energy efficiency incentives represent only a small part of Kentucky’s State Energy Program award,” said Roger Thomas, executive director of the Governor’s Office of Agricultural Policy (GOAP). “But they will provide enormous benefit to Kentucky’s farmers and position Kentucky agriculture as a leader in on-farm energy efficiency.”

Producers may apply for these funds in two ways.  First, producers in all counties who have completed a sign-up period for the County Agricultural Investment Program (CAIP) will have their requests from the “On-farm Energy Efficiency and Production” investment area automatically forwarded to GOAP by their county’s program administrator.

Farmers in each of the 49 counties that will not have completed a sign-up period for CAIP prior to Nov. 15, 2009 may apply directly to GOAP for these energy stimulus incentives. GOAP will accept direct applications from Nov. 2-13, 2009.  For a list of counties that will follow this alternate application process or to download the application, visit agpolicy.ky.gov.

All applications received from across the Commonwealth will be reviewed and scored by a committee comprised of representatives from GOAP, the Kentucky Agricultural Development Board, the UK College of Agriculture and a Rural Electric Cooperative.  A representative from USDA Rural Development and the Kentucky Energy and Environment Cabinet will each serve in an ex-officio capacity.

All applications meeting the minimum requirements of eligibility will be considered for funding.  If the total eligible applications exceed the available funds, the committee will rank the applications using the scoring criteria.  Applicants will be notified of their approval.

Any energy stimulus funds remaining after the 2009 sign-up will be made available to producers in all Kentucky counties in 2010.  Additional information will be disseminated as it is available.

If you have any questions about this application process, please contact Bryan Thomas at (502) 564-4627 or [email protected].

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Energy bonus incentives are made possible through the Renewable Energy Partnership between  the Governor’s Office of Agricultural Policy and  the Energy & Environment Cabinet’s Department for Energy Development & Independence. Funding comes from the American Recovery and Reinvestment Act of 2009.

Governor Steve Beshear and the Kentucky Legislature continue to make great strides toward lessening Kentucky’s dependence on tobacco production while revitalizing the farm economy by investing 50 percent of Kentucky's Master Settlement Agreement into the Kentucky Agricultural Development Fund.

The ABC News/Washington Post: Most Americans Do Not Believe that the Recession is Over

 The latest ABC News/Washington Post poll: “Many economists say that using the standards they apply, the recession probably is over. Thinking about your own experience of economic conditions, would you say that from your point of view the recession is over, or not over?” Result: Not over, 82 percent.

Seventy-four percent in this poll are worried about the direction of the nation’s economy over the next few years.  Sixty percent remain worried about their own family’s financial prospects.  

 

To Read More Download 1095a5Recession

Senator Olympia Snowe's Next Step for Main Street Credit Availability Act of 2009 (Introduced in Senate)

From Thomas.com

A BILL

To amend the Small Business Act and the Small Business Investment Act of 1958 to stop the small business credit crunch, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Next Step for Main Street Credit Availability Act of 2009'.

SEC. 2. MAXIMUM AMOUNTS FOR 7(a) LOANS.

Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 636(a)(3)(A)) is amended by striking `$1,500,000 (or if the gross loan amount would exceed $2,000,000' and inserting `$4,000,000 (or if the gross loan amount would exceed $5,000,000'.

SEC. 3. REFINANCING EXISTING 7(a) LOANS.

(a) In General- Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following:

`(34) REFINANCING EXISTING LOANS- A borrower that has received a loan under this subsection may refinance the balance of the loan by applying for a loan from the lender that made the original loan or with another lender.'.

(b) Technical Amendment- Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by striking `(32) INCREASED' and inserting `(33) INCREASED'.

SEC. 4. MAXIMUM LOAN AMOUNTS UNDER 504 PROGRAM.

Section 502(2)(A) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)) is amended--

(1) in clause (i), by striking `$1,500,000' and inserting `$4,000,000';

(2) in clause (ii), by striking `$2,000,000' and inserting `$5,000,000'; and

(3) in clause (iii), by striking `$4,000,000' and inserting `$5,500,000'.

SEC. 5. MAXIMUM LOAN LIMITS UNDER MICROLOAN PROGRAM.

Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended--

(1) in paragraph (1)(B)(iii), by striking `$35,000' and inserting `$50,000';

(2) in paragraph (3)(E), by striking `$35,000' each place it appears and inserting `$50,000'; and

(3) in paragraph (11)(B), by striking `$35,000' and inserting `$50,000'.

SEC. 6. ONLINE LENDING PLATFORM.

It is the sense of the Congress that the Administrator of the Small Business Administration should establish a website that--

(1) lists each lender that makes loans guaranteed by the Small Business Administration and provides information about the loan rate of each such lender; and

(2) allows prospective borrowers--

(A) to compare rates on loans guaranteed by the Small Business Administration; and

(B) to apply online for loans guaranteed by the Small Business Administration.

 

The Recession's Cost: States Are Losing Millions in Transportation Funds

 

From the Taxpayers for Common Sense

California alone will lose almost $800 million and every state will lose at least $30 million. In effect, this will wipe out a good portion of the dollars states received in transportation funds from the federal stimulus bill.

 

It is possible if not likely that Congress will find a way to backfill these funds. But this would drive up the cost of the 2005 transportation bill to $295 billion; add to that the $15 billion Congress already deposited into the Highway Trust Fund to keep it from going broke, and the bill is more like $310 billion.

 

Click Download Final_093009_highway_rescession    to see each state's loss of transportation revenues.

Is the Obama Administration's Planning a New Stimulus Package, With A Broader Transportation BIll ds

Bloomberg.Com

 Administration officials have told allies in Congress that a broader transportation bill, and extensions of a homebuyer tax credit and unemployment benefits are all on the table, a Senate aide said.

Representative Chris Van Hollen of Maryland, who chairs the Democratic Congressional Campaign Committee that is tasked with holding the party’s House majority in next year’s midterm elections, said additional transportation funding would be popular among Democratic lawmakers.

“If there was to be another round of stimulus, additional infrastructure would be at the top of the list,” Van Hollen said in an interview.