During the presidential election of 2008, Barack Obama enjoyed the backing of just about his entire party (excluding some disappointed Clinton supporters). Now that he has taken office and has proposed his economic stimulus package, the American Recovery and Reinvestment Plan, many moderate Democrats aren’t as supportive.

The American Recovery and Reinvestment Plan is an encompassing plan to create new jobs; enhance technology and energy efficiency; and upgrade/improve roads, bridges and schools. Many economists believe this plan is one of the best ways to pull our economy out of recession. So what’s the problem?

More liberal Congressional Democrats do not believe the plan goes far enough. Unfortunately, many Republicans think the plan goes too far in the direction of social welfare and less in the direction of helping small businesses and allowing the effects to trickle down to consumers. Hence, there’s the problem of trying to please his own party and the opposition party in order to ensure quick passage of a much-needed bill.

The Democrats believe the program should focus more on job creation and infrastructure improvements (particularly in the energy sector) versus tax cuts (which are included in the bill). Senate Democrats also want to include a provision for bankruptcy courts to have the ability to change the terms of home loans - which is opposed by Republicans.

President Obama has stated that quick passage of the bill is necessary to help the economy begin to improve. Unfortunately, it is impossible to please everybody. Conservative Democrats and Republicans are concerned with the amount of spending in the bill leading to an increased deficit. But more liberal Democrats are chiefly concerned that not enough money is spent on social programs and improvements in infrastructure.

Despite opposition from conservative members of the Democratic Party as well as the Republicans, President Obama has some pretty powerful friends. Speaker of the House and fellow Democrat Nancy Pelosi has called for passage of the bill by President’s Day. As a staunch proponent of this bill, Speaker Pelosi has also stated that if the bill is not passed by President’s Day, then the House will not recess for the day.

By and large, though, Democrats view this bill and President Obama favorably. After all, Obama’s economic plan is a far cry from the Emergency Economic Stabilization Act of 2008, which introduced the Troubled Assets Relief Program (TARP), a $700 billion financial market bailout.

TARP got off to a rocky start when former Treasury Secretary Henry Paulson went against the clear intent of the bill (buying up “troubled assets” such as bad loans from banks and other financial institutions) to invest the initial $350 billion directly in the beleaguered institutions. More oversight has been called for, but ultimately, TARP will do virtually nothing to help the average American.

The American Recovery and Reinvestment Plan, on the other hand, adheres to the Democratic ideas of spending federal funds to improve the state of the nation. Democrats are pleased with the infrastructure, electricity (including alternative power sources), education and other means of creating jobs.

Recently, Rep. Barney Frank (Democrat – MA), chairman of the House Financial Services Committee, appeared on Larry King Live to defend the economic package. He pointed out that the plan created jobs in ways many Republicans and conservative Democrats were decrying as adding pork, such as providing money to fight sexually transmitted diseases. Rep. Frank asked pointedly, “[D]o you think people fight sexually transmitted diseases as volunteers?”

His point is valid. Many on the conservative side tend to view those parts of the stimulus package that promote improvements in infrastructure as the only ones that create jobs. However, manual labor is not the only job option out there.

Rep. Frank also pointed out that many Democrats believe the initial $350 billion from TARP was mishandled by the Bush administration. He further supported President Obama by categorically stating the second $350 billion provided by TARP would be spent in better ways.

Later in the same Larry King segment, Paul Begala, a Democratic strategist, also talked up the plan. Begala stated he believes Obama’s plan can be trusted, as many American people, especially many Democrats, trust Obama himself. He also compared President Obama’s plan to FDR’s New Deal in that it calls for greater transparency and oversight of the money being spent.

Transparency from the Obama Administration is reassuring to many Americans. As the Bush Administration was exiting, no one had any real idea how the money was getting spent or where Secretary Paulson was spending it.

The majority of the Democratic Party is standing firmly behind President Obama. Those Democratic detractors of the American Recovery and Reinvestment Plan are mainly opposed to one of two things: tax cuts added to garner Republican votes or too much spending that could lead to a greater deficit. But no matter what compromises he makes in order to engender support, President Obama should not hold out for universal popularity, in either the Democratic or Republican parties.

President Barack Obama delivered his first weekly address to the nation on January 24 2009, just four short days after taking office. The topic? The US economy.

President Obama’s American Recovery and Reinvestment Plan is designed to “immediately jumpstart job creation as well as long-term economic growth.” But what does that really mean to you and me?

Obama, A Republican's View – Obama, A Democrat’s View

According to President Obama’s address (check it out below), the American Recovery and Reinvestment Plan breaks down like this:

• Energy:

1. Build a whole new electricity grid using “clean” electricity like solar and wind
2. Make “75 percent of federal buildings more energy efficient”
3. 2.5 million homes will be weatherized (thereby increasing energy efficiency and the protection against the elements)

• Health care:

1. Over the next five years, computerize health records
2. Protect individual and family health plans from being cut or cancelled

• Education:

1. Upgrade schools (new computers, improve classrooms, labs and libraries)
2. Make college more affordable (increased investment in Pell Grants, a tax credit for 4 million students and triple science fellowships)

• Infrastructure:

1. Improve/rebuild roads and bridges
2. Increase mass transit
3. Improve the communication system for local police and public safety officials
4. Expand broadband access across the nation

Again, what does all of this mean to you and me? A lot, actually. President Obama’s economic plan will affect everyone. The new electrical grid, the upgraded schools and the infrastructure improvements mean new jobs created. New jobs mean that more people have more money.

More money means that those people can pay bills, like their mortgage. The housing and banking markets will improve as mortgages get paid and foreclosures drop. Also, the economy in general will upswing as the newly re-employed spend their money, not just for necessities, but for meals out, clothing, shoes, books and so on.

Read the full address here: American Recovery and Reinvestment

Expanded broadband not only increases jobs for installing and troubleshooting, but also provides for a larger audience to which small-business owners can market and sell their products. In fact, through Obama’s plan, not only will we see immediate results, but long-term gains as well.

As far as the individual goes, let’s put it this way:

• You’ll pay less for energy (maybe not tomorrow, but within three years, according to Obama’s address) - especially if your home is one of the 2.5 million to be weatherized - as clean energy is cheap energy, and energy-efficient federal buildings mean fewer tax dollars going to government electricity bills.
• Computerized health records can save your life. Say, if you are in an accident and knocked unconscious, the hospital can access your records quickly and let the staff know about any health conditions you have (including allergies to medicine).
• A protected health plan - well, that one is pretty obvious. Health coverage means less out of pocket for medical bills.
• For those students out there, improved classrooms, a Pell Grant, a tax credit and a fellowship can mean your future is that much more accessible.
• Mass transit means you can get places faster, cheaper and more efficiently.

President Obama even has a leading economist on his side. Mark Zandi of moodyseconomy.com, formerly of the McCain-Palin campaign, believes this plan is the best chance for economic recovery.

Speaker of the House Nancy Pelosi wants Congress to act on the American Recovery and Reinvestment Plan by President’s Day (February 16, 2009); she stated, “The time is now to act on the legislation Mr. Zandi estimates will create and save more than 4 million American jobs by the end of 2010” (source: Office of the Speaker of the House). Needless to say, if you are one of those 4 million people, this plan will impact you in a positive way.

Speaker Pelosi pointed out that this plan will help everyone from blue-collar workers to small-business owners to white-collar workers. Also, America will become more energy-independent in the future.

Not only will this energy efficiency impact the American economy in the short term, but it will also improve the future for our country. More fellowships in science mean that the next generation of great scientists will have the necessary education and experience to bring about the next great wave of technological and scientific advancements. Also, the additional Pell Grants and the tax credit will help students who wouldn’t be able to afford college actually get the chance to go. This may provide us with an American educational and intellectual revolution.

According to a recent New York Times article referencing Mr. Zandi, the stimulus package will have a bigger impact on the economy than the bailouts given to the bank and auto industries. Since business bailouts only affect individual markets, it “has little direct impact on economic growth or job creation.” Also, packages using tax cuts or tax rebates don’t positively impact the economy as most people either save the money or pay bills with it.

In fact, the only type of stimulus plan that will positively impact the current economy is one like the American Recovery and Reinvestment Plan. With this type of plan, each dollar spent for the plan “generates a $1.50 or more in economic activity” (source: above-referenced New York Times article).

In short, President Obama’s economic stimulus plan will do what it says. It will stimulate the economy and positively impact each and every one of us.