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Q: How will infrastructure spending affect jobs?

A: The Federal Highway Administration has estimated that every $1 billion the federal government spends on infrastructure projects translates to 35,000 jobs. Collins put the total infrastructure spending — including highways, mass transit, environmental cleanups and broadband facilities — at $150 billion. Do the math and that translates into more than 5 million jobs, based on the highway administration's assumptions.

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This article is about the policy program of US President Franklin D. Roosevelt. For other uses, see New Deal (disambiguation).

Top left: The Tennessee Valley Authority, part of the New Deal, being signed into law in 1933.
Top right: President Franklin Delano Roosevelt, who was responsible for initiatives and programs collectively known as the New Deal.
Bottom: A public mural from one of the artists employed by the New Deal.Part of the Politics series on
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The New Deal was the name that United States President Franklin D. Roosevelt gave to a sequence of central economic planning programs he initiated between 1933 and 1939 with the goal of giving work (relief) to the unemployed, reform of business and financial practices, and recovery of the economy during The Great Depression. The enactment of New Deal policies lasted from 1933 through 1938.[1][2]

When Franklin D. Roosevelt took office, the nation was in deep economic trouble. State governors had shut down every bank and every bank account was frozen--no one could get a bank loan or cash checks or get at their deposits. Unemployment was 25% and higher in major industrial and mining centers. The agricultural sector, with a fourth of the nation's population, was in worse shape than industrial areas. Deflation was raging--prices were falling, making future planning difficult and raising the burden of existing debts. Mortgages were being foreclosed by the tens of thousands. Worst of all, many people seemed to have given up hope for a better future and were desperately holding on.[3] Unemployment was still high in 1939, with the tide only turning in 1941 when the U.S. entered into World War II.[4]


The "First New Deal" of 1933 was aimed at short-term recovery programs for all groups. The Roosevelt administration promoted or implemented banking reform laws, emergency relief programs, work relief programs, agricultural programs, and industrial reform (the National Recovery Administration, NRA), and the end of the gold standard and Prohibition.

A "Second New Deal" (1935–193 included labor union support, the Works Progress Administration (WPA) relief program, the Social Security Act, and programs to aid farmers, including tenant farmers and migrant workers. The Supreme Court ruled several programs unconstitutional; however, most were soon replaced, with the exception of the NRA. The Fair Labor Standards Act of 1938 was the last major program launched, which set maximum hours and minimum wages for most categories of workers.[5]

Most of the relief programs were shut down during World War II by the Conservative Coalition (i.e., the opponents of the New Deal in Congress). Many regulations were ended during the wave of deregulation in the late 1970s and early 1980s. Several New Deal programs remain active, with some still operating under the original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System, Securities and Exchange Commission (SEC), and Fannie Mae.




[edit] Origins

Chart 1: GDP annual pattern and long-term trend, 1920-40, in billions of constant dollars.[6]The New Deal represented a significant shift in political and domestic policy in the U.S., with its more lasting changes being increased federal government control over the economy and money supply, intervention to control prices and agricultural production. This was the beginning of complex social programs and wider acceptance of trade unions.[7] The effects of the New Deal still remain a source of controversy and debate amongst economists and historians.[8]

The crash of the U.S. stock market occurred on Thursday October 24, 1929; then, on "Black Tuesday" October 29, the stock market fell even more than it had the week before. These events were the catalyst of a worldwide economic depression.

From 1929–1933, unemployment in the U.S. increased from 4% to 25%, manufacturing output reduced by approximately a third. Prices fell causing a deflation of currency values, which made the repayments of debts much harder. The mining, lumber, and agriculture industries were hit especially hard by the drop in values. The impact was much less severe in white collar and service sectors.

Upon accepting the 1932 Democratic nomination for president, Franklin Roosevelt promised "a new deal for the American people." (The phrase was borrowed from the title of Stuart Chase's book A New Deal published earlier that year):

“ Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth… I pledge myself to a new deal for the American people. This is more than a political campaign. It is a call to arms.[9] ”

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Q: What are some of the tax breaks in the bill?

A: It includes Obama's signature "Making Work Pay" tax credit for 95 percent of workers, though negotiators agreed to trim the credit to $400 a year instead of $500 — or $800 for married couples, cut from Obama's original proposal of $1,000. It would begin showing up in most workers' paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January.

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Bank and monetary reforms
With strident language Roosevelt hurled blame at businessmen and bankers: "Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men....The money changers have fled from their high seats in the temple of our civilization."

By March 4, nearly all banks in the country were closed by their governors, and Roosevelt kept them all closed until he could pass new legislation.[16] On March 9, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's Administration; the act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in "hoarded" currency and gold flowed back into them within a month, thus stabilizing the banking system. By the end of 1933, 4,004 small local banks would be permanently closed and merged into larger banks. (Their depositors eventually received 85 cents on the dollar of their deposits.) In June came the reform which has proved the most significant; Congress created the Federal Deposit Insurance Corporation (FDIC), which insured deposits for up to $5,000. The establishment of the FDIC ended the era of the bank run.

In March and April in a series of Acts of Congress and executive orders Roosevelt and Congress suspended the gold standard for United States currency. Under the gold standard, the Federal Reserve was prevented from lowering interest rates and was instead forced to raise rates to protect the dollar. Actions to suspend the gold standard included Executive Order 6073, the Emergency Banking Act, Executive Order 6102, Executive Order 6111, the 1933 Banking Act and House Joint Resolution 192. Anyone holding significant amounts of gold coinage was mandated to exchange it for the existing fixed price of US dollars, after which the US would no longer pay gold on demand for the dollar, and gold would no longer be considered valid legal tender for debts in private and public contracts. The dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold, only to be fixed again at a significantly lower level a year later with the passage of the Gold Reserve Act in 1934. Markets immediately responded well to the suspension, although it was assumed to be temporary.[17]

The economy had hit rock bottom in March 1933 and then started to expand. As historian Broadus Mitchell notes, "Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically."[18] Economic indicators show the economy reached nadir in the first days of March, then began a steady, sharp upward recovery. Thus the Federal Reserve Index of Industrial Production hit its lowest point of 52.8 in July 1930 (with 1935-39 = 100) and was practically unchanged at 54.3 in March 1933; however by July 1933, it reached 85.5, a dramatic rebound of 57% in four months. Recovery was steady and strong until 1937. Except for unemployment, the economy by 1937 surpassed the levels of the late 1920s. The Recession of 1937 was a temporary downturn. Private sector employment, especially in manufacturing, recovered to the level of the 1920s but failed to advance further until the war.

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$790B stimulus bill cleared Money to target tax breaks, projects
BY DAVID ESPO The Associated Press



    WASHINGTON — Moving with lightning speed, the Democrat-controlled Congress and White House agreed Wednesday on a compromise $790 billion economic stimulus bill designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the measure within days.
    “More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers,” said Senate Majority Leader Harry Reid at a Capitol news conference where he was joined by moderates from both parties whose support is essential for the legislation’s final passage.
    House Speaker Nancy Pelosi, D-Calif., Reid’s partner in negotiations over more than 24 intense hours, initially withheld her approval in a lingering disagreement over federal funding for school construction. “We had to make sure the investment in education” was in the bill, she said.
    Obama, who has campaigned energetically for the legislation, welcomed the agreement in a written statement that said it would “save or create more than 3.5 million jobs and get our economy back on track.”
    The emerging legislation is at the core of Obama’s economic recovery program.
    The president’s signature tax cut was preserved — a break for millions of lower- and middle-income taxpayers of $400 per individual and $800 per couple. That’s less than the $500 and $1,000 the White House originally sought, although officials said it would mean an estimated $13 per week extra per paycheck.
    Wage-earners who don’t earn enough to pay income taxes would get a reduction in the Social Security and Medicare taxes they pay.
    The bill also includes help for victims of the recession in the form of expanded unemployment benefits, food stamps, health coverage and more, as well as billions for states that face the prospect of making deep cuts in school aid and other programs.
    Another provision will mean a one-time payment of $250 for millions of beneficiaries who receive Social Security, Supplemental Security Income and veterans pensions and disability, according to officials. They added that the measure will include $46 billion for transportation projects such as highway, bridge and mass transit construction.
    The president also won money for two other administration priorities — information technology in health care and “green jobs” to make buildings more energy-effi - cient and reduce the nation’s reliance on foreign oil.
    The bill “will be the beginning of the turnaround for the American economy,” predicted Sen. Joe Lieberman, the independent from Connecticut.
GOP VIEWS MIXED
    Republicans couldn’t have disagreed more.
    “It appears that Democrats have made a bad bill worse by reducing the tax relief for working families in order to pay for more wasteful government spending,” said Rep. John Boehner of Ohio.
    But some prominent Republicans straddled the issue.
    Alaska Gov. Sarah Palin, last year’s Republican running mate and a potential White House contender in 2012, said her state was ready to accept a projected $1 billion in federal funds if they make sense for the state. But she criticized increased spending on social programs, which she said could wind up costing her state in the long run and “don’t necessarily stimulate the economy.”
    The events capped a frenzied 24-plus hours that began at midday Tuesday when the Senate approved its original version of the bill on a party-line vote of 61-37. Reid, Pelosi and White House Chief of Staff Rahm Emanuel plunged into a series of meetings designed to produce agreement in time for Obama to sign the bill by mid-month.
    Pelosi was conspicuously absent from Wednesday’s news conference in which members of the Senate announced the agreement. Moments later, Reid arrived in her office, and the two talked by phone with Emanuel, according to officials who spoke on condition of anonymity.
    Officials had said previously that one of the final issues to be settled was money for school modernization, a priority for Pelosi as well as Obama and one on which they differed with Collins and other moderates whose votes will be essential for final Senate approval.
    Originally, Pelosi and House Democrats wanted a new program dedicated to school construction, but Collins held firm against that. In the end, officials said the agreement added flexibility to a $54 billion State Stabilization Fund to permit local governments to use some of the money for modernizing school buildings but not building new ones.
    There also was an unspecifi ed last-minute change in a House proposal that would allow state legislatures to order the use of funds over the opposition of governors. Officials said that issue related in part to South Carolina, where GOP Gov. Mark Sanford has been a vehement critic of the legislation.
    The officials who described the developments and elements of the bill did so on condition of anonymity, saying they were not authorized to speak.
NUDGE TO MARKET
    Stocks moved higher in the moments after Reid stepped to the microphone just outside the Senate chamber. The Dow Jones industrials, which plunged 382 points on Tuesday, rose 51 points for the day.
    Obama has been contending daily that the plan is essential to avoid turning what is already the worst economic crisis in a generation into a catastrophe.
    As if to underscore the urgency, he said a few hours before the agreement was announced that machinery giant Caterpillar Inc. plans to rescind some of the 22,000 layoffs the firm recently announced — once the stimulus is signed into law.
    Scaling back the bill to..................http://www.dailygazette.net/De.....amp;EntityId=Ar00100

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CAPITAL REGION
Angry vote on stimulus near Medicaid costs get help; region to see $108M-plus
BY MICHAEL LAMENDOLA Gazette Reporter

    The Capital Region will receive $108 million in Medicaid relief from the federal stimulus package moving through Congress, according to U.S. Sen. Charles Schumer, D-N.Y.
    The area will also receive money for education and transportation, although the amount is uncertain.
    In all, the stimulus package provides New York state with $20 billion over 27 months.
    Schumer made the announcement Thursday in a conference call with Gov. David Paterson.
    “This is great news for New York. This is the first time in a long time that in a major piece of legislation, New York state gets a lot more back than we pay in, based on taxpayer per capita,” Schumer said.
    Congress is expected to pass the stimulus package today, Schumer said. It is unclear when the money will come to the state and for which projects.
    While the Capital Region will receive $108 million for Medicaid relief, the state as a whole will get $12.65 billion over two years. “This was our number one priority for New York, since we are a heavy Medicaid state,” Schumer said.
    In New York, the federal government covers 50 percent of Medicaid costs, the state 33 percent and counties about 17 percent. Under the stimulus package, the federal government will cover 60 percent, Schumer said. The package also includes an amendment that localities get federal money directly for Medicaid relief, Schumer said.
    “The state has to put less money into Medicaid, and that amount is up to the governor and the Legislature to decide,” Schumer said.
    The stimulus package is expected to create or retain 215,000 government jobs in New York over the next two years, Schumer said. “We did this because with the economy in the bad shape it is, for state government to lay off people and raise taxes would take money out of the economy when we are putting money into the economy. This bill is about jobs, jobs.”
    Schenectady County Legislator Gary Hughes, D-Schenectady, said taxpayers would benefit from any Medicaid relief. “I salute and applaud Sen. Schumer and gratefully accept any Medicaid relief he can provide for us. Whether Medicaid funding stays flat or funding goes up, it is all good,” he said.
    Schenectady County’s Medicaid cost is $32 million, consuming almost half of the county’s $62 million tax levy. Schumer said New York, through the federal stimulus package, will also receive: $2.7 billion for education, which the state can use to offset aid cuts to school districts. $800 million for special education, with the federal government assuming 27 percent of the cost, up from 17 percent. Counties, for the most part, are responsible for paying special education costs, but they have little say over program decisions. $10 billion for school modernization. $87.5 million for the Clean Water Act. $439 million for sewer projects. $1 billion in highway funding. $1.4 billion for transit. More than $1 billion for weatherization, to help the homeless, for block grants, neighborhood stabilization and more. “This package is good, but it is not perfect. We could not let the perfect get in the way of the very good,” Schumer said.
WISH LIST
    The city of Schenectady and the county submitted a “wish list” to the state, seeking more than $173 million in federal stimulus aid for local projects. Included on the list are the construction of a new county-owned nursing home and the construction of a city public works facility; projects to fi x sidewalks and improve streets; the construction of the Bethesda House homeless shelter; and projects to upgrade the city’s sewage treatment facility.
    The federal stimulus package will alleviate but not eliminate fiscal problems at the state and local levels, Schumer said. “There will still be difficult choices, but it means that they will be able to use a rapier rather than a meat axe,” he said.
    Paterson agreed with Schumer: “Even with these resources, there will be painful cuts that will be shared evenly across the state. We certainly see some immense opportunities, but we need to use stimulus resources as were intended, to stimulate the economy.”
    Paterson said the state faces immense fiscal problems, such as an estimated $14 billion deficit. “We need to ...........................http://www.dailygazette.net/De.....amp;EntityId=Ar00100

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