The infrastructure plan is one of several initiatives President Obama is due to unveil this week. With the November 2nd elections looming and the unemployment rate running at 9.6%, Obama has been under a great deal of pressure to create more jobs.
“We are going to rebuild 150,000 miles of our roads — that’s enough to circle the world six times… We’re going to lay and maintain 4,000 miles of our railways — enough to stretch coast-to-coast,” Obama said. This infrastructure initiative, however, will have little impact on the unemployment figures this year. Its impact on the economy won’t be felt until 2011.
Obama also plans to ask Congress to extend and enhance a tax credit for business research and development which would cost the government $100 billion in revenues over 10 years. If passed, this would likely have a more immediate effect on the economy.
Obama’s stimulus plan is not intended to be financed by printing more money and thereby increasing the deficit. He said, “This is a plan that will be fully paid for. It will not add to the deficit over time — we’re going to work with Congress to see to that”. Apparently the funds are going to be created by cutting off some tax concessions currently enjoyed by the oil and gas industry.
John Boehner, House Republican leader, was not impressed.
“We don’t need more government ‘stimulus’ spending — we need to end Washington Democrats’ out-of-control spending spree, stop their tax hikes, and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses,” Boehner said.