OPED: Stimulus Package a Crucial First Step to Reignite the Economy

Thursday, February 05, 2009

Congressman Schiff's guest views on the stimulus package were carried in the Pasadena Star-News, the San Gabriel Valley Tribune, and the Whittier Daily News:

Last week, the American economy lost 71,400 jobs - in a single day. The International Monetary Fund warned that world economic growth is set to fall to 0.5 percent in 2009, its lowest rate since World War II. And at the just concluded World Economic Forum in Davos, Switzerland, business leaders from around the world were gloomy and skittish. Their mood reflected the global fear about the state of the world economy.

We have a unique opportunity to achieve two important goals with the stimulus package that recently passed the House and is now awaiting action in the Senate: to create jobs and get commerce moving again through a combination of infrastructure spending, tax cuts and other fiscal stimulus, so that families can maintain their income, standard of living and health care; and to make investments in our future and promote our long-term prosperity. 

One of the major pillars of the stimulus package is infrastructure spending that will quickly create jobs while rebuilding the nation's transportation networks. Los Angeles County is expected to receive $447 million for transit-related projects and at least $380 million in highway funding in the House version of the bill. While we must disperse these funds quickly, we must ensure that they constitute a significant and lasting investment in our country, such as building ready-to-go capital projects like the Gold Line Foothill Extension that will benefit our community for decades. 

By also focusing on renewable energy, we meet both goals for the stimulus. The green energy sector is burgeoning and offers many opportunities to give the economy a quick boost. The bill includes billions in federal loan guarantees to help local and state governments finance new projects, a necessity in these credit-starved times, while extending tax incentives for renewable energy developers and funding for immediate reliability improvements to the national electrical grid. 

But much of the renewable energy section of the bill is also vital to long-term economic health and competitiveness. Each solar panel or wind turbine we build makes the next one cheaper, and the stimulus includes funding for research and development that will provide the clean, efficient new technologies that will produce our energy in the future. The stimulus is merely the first in a wave of solar, geothermal and wind energy investments that will transform our economy and create well-paid, high-tech jobs in America, without plundering our nation's natural resources. This bill is not just a first step; it is a great leap toward a clean, sustainable high-tech economy. 

The recession and the hyper-competitive global economy are endangering our advantage in human capital. Despite today's economic challenges, we must prepare our children to compete in the 21st Century economy by building new schools, modernizing others, and increasing assistance to school districts to avoid layoffs. At a meeting I hosted on Friday with local school board members and superintendents, I identified more than $95 million in the stimulus bill that will go out to schools in our community over the next two years. 

The bill also expands access to higher education and contains provisions making college more affordable for many low- and middle-income families, including: a new American Opportunity Tax Credit of $2,500 for students who perform at least 100 hours of community service; an increase to the Pell grant maximum by $500 to $5,350, and $79 billion in state block grants with 61 percent of that funding directed to both pre K-12 and higher education. These investments will ensure that the recovery, when it comes, will be broad and sustainable. 

With the unemployment rate for the L.A.-Long Beach-Glendale Metro area nearing 10 percent, I have heard from constituents who are going through hard times, facing foreclosure, losing their jobs and even going bankrupt. 

One local mother wrote to tell me that she was laid off from her job as a postal carrier in December and applied for unemployment benefits immediately. While she is waiting for the payments, her two adult kids are pitching in so she can continue to provide for her young son. She has turned, as so many have in these troubled times, to prayer. 

The stimulus may provide this mother some of the relief for which she has been praying. The bill increases funding for unemployment insurance benefiting her and 2.3 million other jobless California workers and increases their checks to $325 a week. To help them as they re-enter the workforce, the bill funds adult and dislocated worker training and federal subsidies for COBRA health insurance for a year.

The stimulus bill is far from perfect, and more work needs to be done to ensure that all of the spending in the bill meets the stated purpose of stimulating the economy and helping Americans in need. But our friends and neighbors are hurting, California is struggling and our nation needs a helping hand. This package is a crucial step in reigniting the economic engine that has made America the most productive and innovative economy in the world. It will not solve all of our problems, but it is a start.