PRESIDENT Obama yesterday laid out more pieces of a US economic plan he said would add 3,000 miles of electrical lines, increase security at 90 ports and double the United States' renewable energy capacity within three years.
It was the latest appeal from the new president for a massive spending bill designed to inject almost a trillion dollars into a flailing US economy and to fulfil campaign pledges. As members of Congress consider a $825bn plan, Obama's White House re
leased a radio and internet address directed at voters who want answers.
"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future," Obama said in a five-minute address released yesterday.
"In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."
Along with the speech, Obama's economic team released a report designed to outline tangible benefits of the plan. Aides said they wanted people to understand what they could expect – more schools, lower electricity bills – if their members of Congress supported the proposed legislation.
The United States lost 2.6 million jobs last year, the most in any single year since the Second World War. Manufacturing is at a 28-year low and Obama's economists say unemployment could top 10% before the recession ends. One in 10 homeowners is at risk of foreclosure and the dollar continues to slide.
That harsh reality has dominated Obama's first days in office and prompted a Saturday meeting of his economic team at the White House during their first weekend in power.
A day earlier, he invited Democratic and Republican leaders to the White House to hear their ideas on the economy, yet Obama didn't share the plan's specifics while they visited.
Many of the goals in the speech and report were familiar from Obama's two-year campaign, like shifting to electronic medical records and investing in preventive health care. Other parts added specifics.
Obama's recovery package aims to:
• Double within three years the amount of energy that could be produced from renewables, an ambitious goal given the 30 years it took to reach current levels. Advisers say that could power six million households;
• Upgrade 10,000 schools and improve learning for five million students;
• Save $2bn a year by making federal buildings energy-efficient;
• Triple the number of undergraduate and graduate fellowships in science.
The plan would spend at least 75% of the total – or more than $600bn – within 18 months, providing a huge infusion of cash to the economy, either through bricks-and-shovels projects favoured by Democrats or tax cuts pushed by Republicans. Either could produce progress that Obama could point to if he needs to justify a second package.
The plan lays a heavy emphasis on infrastructure that crumbled as state budgets contracted. Governors have lobbied Obama to help them patch holes in their budgets, drained by sinking tax revenues and increased need for public assistance like Medicaid and children's health insurance. Obama's plan would increase the federal portion of those programmes so no state would have to cut any of the 20 million children whose eligibility is now at risk. Obama's plan would also provide health cover for 8.5 million Americans who lose their insurance when they either lose or shift jobs.
"It's a plan that will save or create three to four million jobs over the next few years" and recognises "there are millions of Americans trying to find work even as, all around the country, there's so much work to be done," he said.
But he cautioned again against expecting instant results: "No one policy or programme will solve the challenges we face right now, nor will this crisis recede in a short period of time."
Ties between the US, the world's biggest economy, and China, with bulging exports and foreign exchange reserves, showed signs of strain yesterday. China's central bank said US accusations that it was manipulating the yuan currency were misleading, a day after Beijing cautioned incoming secretary of state Hillary Clinton to tread carefully.
The remarks from Su Ning, a vice governor of the People's Bank of China, were the bank's first public reaction to comments from US treasury secretary-designate Timothy Geithner, who said last week that Beijing was manipulating its currency exchange policies to gain an unfair trade advantage.
"These comments are not only out of keeping with the facts, even more so they are misleading in analysing the causes of the financial crisis," Su said of Geithner's comments to the Senate finance committee, according to the official Xinhua news agency.
The exchange suggests a testy start to relations between the Obama administration and Beijing, which may tarnish vows of cooperation in combating the global slowdown and security threats.
China worries that its already slowing exports will be even harder hit by US policies to narrow their trade imbalance. Meanwhile, many US politicians believe the yuan is well undervalued, giving Chinese exporters a big advantage that they blame for US job losses and the trade deficit, which hit a record $256.3bn in 2007.
"The international community is currently working together in actively responding to the financial crisis, and it must avoid exploiting different excuses for renewing or encouraging trade protectionism, because these are of no help in withstanding the financial crisis," Su said.
Su's swipe at Geithner came after China's foreign minister urged Clinton to be careful with sensitive issues that could strain ties.
"The China-US relationship is one of the world's most important bilateral relations." Yang Jiechi told Clinton. Each side should "respect and show consideration for the other's core interests and appropriately handle differences and sensitive issues", he said.
Yang, a former ambassador to Washington, said the two powers should "handle bilateral relations by adhering to a strategic high-point and a long-term perspective".
