On the heels of a pessimistic August unemployment report, President Barack Obama announced a federal stimulus plan meant to generate jobs leading into mid-term elections.
The stimulus package, Obama’s second such plan since the start of his term, will “expand and renew our nation’s roads, railways and runways,” according to an administration release. The plan will focus on the country’s transportation infrastructure, setting out to accomplish two goals: First, to employ more Americans, and second, to make transportation more easy and efficient. The plan will last for six years and cost $50 billion.
What the Plan Covers
The proposed package is setting out to improve the nation’s transportation system by spending money more wisely and finding the most efficient ways to improve or add to the existing infrastructure.
The plan calls for 150,000 miles of new roads, 4,000 miles of new railways and 150 miles of new runways to be built. The $50 billion price tag is an up-front investment that, according to the President, “would help jump-start additional job creation, while also laying the foundation for future growth.” This initial funding would go toward the country’s roads and air traffic control systems.
In the long term, the package will put together an “Infrastructure Bank” that would focus on how the stimulus money is allocated and put money toward the development of additional high-speed rail lines. Safety and environmental concerns would be at the forefront of the stimulus plan. The push to incorporate more public transportation is a main pillar of the plan, as bus lines and high-speed trains would receive an infusion of capital.
Unemployment Rate Up
The national unemployment rate in August inched up to 9.6% from 9.5%. The government job picture took the biggest hit as the U.S. Census let its part-time workers go and state and local governments struggled with budget deficits. The private sector fared a little better, as hiring grew slightly in August. The unemployment rate has stagnated between 9.5% and 9.7% all summer.
The federal stimulus plan should certainly increase government hiring, and it’s not the only measure the government is taking to lower the unemployment rate. Obama is expected this week to unveil a new plan offering tax credits to businesses that spend money on research and development. The economy and unemployment are the hottest issues in politics heading into the crucial mid-term elections this November. Democrats are currently teetering on the brink of being unseated because of their inability to turn the economy around. If thousands of Americans receive jobs as a result of Obama’s new plan, Democrats could see some benefit at the polls.
Watch a video of President Obama’s address on the jobs situation below:
Click here to read a release from the White House.