Obama economic recovery plan includes vast public works program
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WASHINGTON: Saying that the U.S. economy would probably worsen before it improved, President-elect Barack Obama on Sunday pledged to pursue a recovery plan "equal to the task ahead," with a vast public works program built around not just bridge and highway projects, but also the creation of "green jobs" and the spread of new technologies.
"This is a big problem," Obama said of the economic crisis, "and it's going to get worse."
He also said in an interview with NBC News that any bailout of the domestic automakers should be tied to a reinvention by Detroit of an industry "that really works." But with Congress poised to act on the automakers' urgent pleas for help, he also said that despite the industry's mistakes, "I don't think it's an option to simply allow it to collapse."
As his transition team formulates its plans for recovery, Obama promised far tougher regulation of the financial sector.
"What you will see coming out of my administration right at the center," he said, "is a strong set of new financial regulations, in which banks, ratings agencies, mortgage brokers, a whole bunch of folks start having to be much more accountable and behave much more responsibly."
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But with jobs evaporating and the recession deepening, the biggest news Obama made probably came in the details he offered Saturday for the recovery program he is trying to fashion with congressional leaders in hopes of being able to enact it shortly after being sworn in on Jan. 20.
It would be, he told NBC, elaborating on remarks he made Saturday, "the largest infrastructure program in roads and bridges and other traditional infrastructure since the building of the federal highway system in the 1950s."
His comments followed a report on Friday indicating that the country lost 533,000 jobs in November alone, bringing the total number of jobs lost over the past year to nearly two million.
Obama would not put a dollar value on his proposed works program, but said the key in deciding which projects to finance would not be "the old, traditional politics" but assessing which projects could most quickly boost the economy while providing longer-term benefits.
His remarks showcased his ambition to expand the definition of traditional work programs for the middle class, like infrastructure projects to repair roads and bridges, to include jobs in technology and so-called green jobs that reduce energy use and global-warming emissions.
Obama's plan would be in part a government-directed industrial policy, with lawmakers and administration officials picking winners and losers among private projects and raining large amounts of taxpayer money on them.
It would cover a range of programs to expand broadband Internet access, to make government buildings more energy-efficient, to improve information technology at hospitals and doctors' offices, and to upgrade computers in schools.
"It is unacceptable that the United States ranks 15th in the world in broadband adoption," Obama said Saturday. "Here, in the country that invented the Internet, every child should have the chance to get online."
President George W. Bush and many conservative economists have opposed such large-scale government intervention because it supports enterprises that might not survive in a free market. That is the crux of the argument against a government bailout of the auto industry.
But Obama proposes to charge ahead, asserting that extensive government support is needed to preserve and create jobs while building the latticework of a 21st-century economy.
Obama said he would invest record amounts of money in an infrastructure program, which would include work on schools, sewer systems, mass transit, electrical grids, dams and other public utilities. The green jobs would include those dedicated to creating alternative fuels, windmills and solar panels; building energy-efficient appliances; or installing fuel-efficient heating or cooling systems.
Paul Bledsoe, a former White House energy adviser in the Clinton administration, said that Obama had now settled whatever debate there was in his transition team and among Democrats in Congress over how to lift the economy in the short term and over a longer horizon.
"It's now clear that Obama intends to stimulate the economy through large direct government spending on infrastructure projects as well as through business and individual tax cuts," said Bledsoe, now an official of the National Commission on Energy Policy, a nonpartisan research group in Washington. "He is advocating things like guaranteeing every American a college education, wiring the entire country for Internet, putting in a smart electric grid. If he can do it, these will be major systemic advantages for the United States in the competitive global economy."
Obama and his team are working with congressional leaders to devise a spending package that some lawmakers suggest could total $400 billion to $700 billion.
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