RIDGWAY – Almost a week after Congress passed what is now a $789 billion stimulus package in Washington, D.C., junior U.S. Sen. Michael Bennet told close to 100 area residents and elected officials at a meeting in Ridgway on Monday that the country is facing “unbelievably tough times” in the current economic downturn but that “Colorado is poised to lead the country out of the recession.”
Even though it was Presidents’ Day, the doors of the Ridgway Secondary School were opened for a question-and-answer session with Bennet, who began the discussion by saying the recession is bad and is getting worse.
“We are living in unbelievably tough times in this economy,” Bennet said. “This isn’t just rhetoric. It’s a once-in-a-hundred-years type thing. All indicators say that our economy has not been in this bad of shape since the Great Depression. This recession is getting deeper and faster.”
Bennet cited the loss of 600,000 jobs in January alone and said that in his short tenure as senator – three weeks – the unemployment rate has jumped from 7.2 percent to 7.6 percent.
He cited long-term trends as well as cause for concern. “Over the last 10 years, this country only created 2.2 million jobs,” he said. “Ten years before that, it created 22 million jobs. The median income over the past 10 years has actually declined and the cost of healthcare has increased. We need to worry about these trends.”
On Tuesday, President Barack Obama plans to sign the $789 billion economic stimulus bill in Denver. Bennet, who supported the bill, said it is only the first step, a “relatively modest” step, he added, to make sure jobs are created in Colorado and across the U.S. Beyond that, Bennet suggested , the Obama Administration will have to deal with the banking crisis and then the housing crisis.
The question remaining for citizens is this: How far will the $789 billion go?
Already, this year, the Ouray County Commissioners expressed concern that the stimulus money wouldn’t actually reach small municipalities for much-needed infrastructure projects like the Town of Ridgway’s streetscapes project. Moreover, since the money must be used in a quick timeframe on projects deemed “shovel-ready,” the projects that meet its criteria are limited. Most of the money Colorado receives will be used for transportation projects; in the Colorado Department of Transpiration’s Region 5, home to Ouray County, most of the shovel-ready projects are paving projects.
“In the stimulus bill, which we just passed, for Colorado there is $400 million in transportation that is going to the governor,” Bennet said, “and he will decide how it is spent.
“There are a lot of localities that wanted to have that money allocated through a formula that sends some to the state and some to municipalities,” he added. “My guess is that that the administration is worried,” he said, of the stimulus package, “that because it is so much money, it will be easier to hold 50 [states] versus all those jurisdictions accountable.”
Bennet said Colorado will also receive $100 million in transit money at the state level. A portion of “state stabilization money” will be distributed through local governments; money devoted to the new energy economy will be allocated by state agencies. The last large piece of the economic stimulus package, he said, is for food stamps, which will be allocated in its traditional manner.
“I am not sure the recovery package was popular with everyone here,” Bennet acknowledged, going on to emphasize, however, that “it’s only the first step.
“Part of our jobs as Coloradoans and as Americans is to create opportunity, not limit opportunity.
“Colorado,” he declared, “is poised to lead the country out of the recession.”
Ridgway resident Frank Starr asked Bennet how the inclusion of tax cuts by the Obama Administration will create jobs.
First, Bennet responded, Obama made a campaign promise that he was going to cut taxes for 95 percent of Americans, and he is holding that promise. Second, Bennet said, he believes Obama “genuinely” wanted bipartisan support for the stimulus bill, but that “didn’t work out.”
He added that increasing the amount of available food stamps would be the most “stimulative thing” the administration could do. “If you are on them and you receive more, you spend more money,” he reasoned, and “it has an immediate effect on the economy.
“Tax cuts do less of a good job in creating jobs,” he said, because “people save roughly half of a tax cut. For every dollar you spend, it’s about half as stimulative as a dollar you spend with a shovel-ready project.
“The honest answer is,” he added, that tax cuts do “create some jobs, but at nowhere the rate direct spending does.”
Two audience members voiced concern about spending when the country itself carries trillions of dollars in debt.
“I am scared to death of the deficit,” said one man who identified himself as a builder and a realtor. “Help me understand where we are going to get this money right now. I don’t think we have the money.”
Bennet acknowledged that the current situation – incentivize spending when national debt is at record levels – is “peculiar,” adding that he wouldn’t have approved the bill if there were any other way to jumpstart the economy.
“The President has promised that when he comes with his budget,” Bennet said, “part of that is going to be a ten-year plan to show how we are going to dig ourselves out of the deficit,” Bennet said.
“It had better be good when it comes back.”