Unemployed Wait For White House Stimulus Plan

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President Obama laid out his plan to stimulate and grow the American economy in his first State of the Union address on Wednesday. But what do his proposals mean for average Americans, particularly those who are unemployed? Host Michel Martin talks to regular Tell Me More financial contributor Alvin Hall about the President's economic agenda. Hall is joined by Connie Guy, a retired nurse from Pennsylvania whose husband has been unemployed for almost a year. She offers her reaction to the Presidents economic proposals.


Now we talked about the politics of last nights speech. Now we want to dig a little deeper into the economic policy behind it. You could really sum it up in this line: President Obama spelling out his economic plan for this year.

President BARACK OBAMA: Jobs must be our number one focus in 2010...

(Soundbite of applause)

Pres. Obama: ...and thats why Im calling for a new jobs bill tonight.

MARTIN: We wanted to talk more about what that means. So, weve called on our regular contributor on matters of personal finance and the economy, our Money Coach Alvin Hall. Hes with us from our bureau in New York.

Were also joined by Connie Guy. Now, weve been checking in with Connie from time to time since the election year. Shes one of our voices from the street, if you want to call her that. Shes a retired nurse. Shes the former mayor of her town, Mountville, Pennsylvania. Her husband was laid off last year. Hes on his last extension of unemployment. And shes with us now from her home in Mountville, Pennsylvania. Welcome to you both, welcome back.

Ms. CONNIE GUY: Thank you for having us.

Mr. ALVIN HALL (Financial Expert; Author): Thank you.

MARTIN: Connie, let me just get your feel (unintelligible) reaction to the presidents speech last night. How did it strike you?

Ms.�GUY: It struck me very well. I was quite moved by his comments. I felt that he was firm and clear in his convictions, and I have to say I was extremely proud of his agenda as far as jobs - his - this job bill that he would like to see on the table this year. And he did remind us that in that final year of the Bush era, there were 700,000 jobs lost, and this year, we're down to approximately 60,000 jobs. The project is - it looks like we're on full steam ahead here.

MARTIN: You think he's making progress?

Ms.�GUY: I do. I believe he is making progress, and it's good that when he comes out on the State of the Union address, as he did last night again, that you can actually see - he's pointed out fact for fact on things that he's been able to get his people to work on this year, and I'm very pleased with what he's done so far. I just - I really - it's my hope and dream that they'll let up on this man, and he's got fortitude. I'm proud of him.

MARTIN: All right. Let's hear from Alvin. From your perspective, what do you think were the most important highlights from the standpoint of economic policy?

HALL: Well, I think the New York Times pointed it out very accurately this morning when they mentioned the fact that he used the word jobs 29 times. I think that he really finally gets the fact that he will not be able to achieve his goals unless people are back to work and feeling optimistic about their future.

I thought the tone of his speech was very interesting, a sort of conversational, I'm-in-your-house-talking-to-you tone. Some of the images, however, were very disturbing, when you would see the Republican Party just sort of sitting there, almost recalcitrant, not wanting to hear it, or smiling with sort of devilish smiles on their faces.

There did not seem to be that much - that many signs that there would be bipartisan support for what he was doing.

MARTIN: What about...

HALL: But he did a good job.

MARTIN: What about what he says he wants to do? I mean, there are a number of components to this. I wanted to ask you about some of the policy initiatives that he announced, that he's proposing to help middle-class families, doubling the child and dependent-care tax credit for families making under $85,000 a year, limiting a students' federal loan payments to 10 percent of his or her income, creating a system of automatic workplace IRAs, requiring employers to give the option to enroll in a direct deposit IRA, tax credits for retirement savings, some support for caregivers, for elderly parents. What do you think about that?

Now, these are described as a modest set of initiatives. What is your perspective on it, Alvin?

HALL: They are modest, and most of them are tax credits. And whether or not they will cause people to spend money at this point, I think that's the unknown.

If you think about the child-care tax credit, it's going from 1,200 to 2,100. That's a good chunk - a good increase for the average person if you're paying for child care. So that's good. But will the families then go out and spend that money? Or has a spouse or someone in the family been unemployed so long, they'll use that money to catch up on bills?

I actually thought the student loan payment program was very interesting. It's going back to something that was in place when I graduated from college.

Back then, if you took a job in the public sector, working in a low-income area, you would write off 10 percent of your loan every year. So it's going back to that.

When I read this morning the criticism that they were - that this program was focused on a certain group of people and not helping everyone, well, if I make that decision as a college graduate to go work in a low-income area, then I buy into the program. If I work there 10 years, I've met my obligation. So why shouldn't my loan be forgiven?

MARTIN: And I - I'm sorry - I want to mention that he also announced a number of proposals to encourage small businesses to hire to more workers. So I want to mention that, as well, including some capital gains forgiveness and things of that sort.

Connie, when you heard these proposals, and there were a number of them, did any of those make you sit up and say, okay. That would help me. That would help my family.

Ms.�GUY: Oh, absolutely, especially when he spoke of the tax credits for homeowners. Again, as I had said previously, my husband was laid off from his job last year. He's now on his third extension. We own this home, and even when he goes into retirement this year, and that's early retirement, he may need to find work in order to keep our home.

But under the initiatives that President Obama is trying to push through, there may be hope for us yet, and we're just one of millions of Americans across the country who stand a chance of losing their home, and he's right. You know, one illness away, they could lose their home, lose their family. And the agenda that he wants to push through in the tax credits for education, for homeowners, hats off.

MARTIN: What about the stimulus money that he talked about? You know, apparently, this has been a very sort of controversial thing all year long. There are people say, oh, he spent too much. He's running up the deficit. And there are others who say he's not spending enough. We need to get that money into the neighborhoods, into the states and cities and towns right now.

As a former mayor particularly, did you see any of this stimulus money? Did it have any effect on your community?

Ms.�GUY: We were able to improve streets in our area because of money that we received last year, and slight improvements, yes. There's a community center here that, when I spoke to you last time, we were in the process of trying to move ahead. Well, now that community center, it's moving full steam ahead. There's actually tenants in the building. So yes, some of that stimulus money did help in those areas.

MARTIN: And finally, Connie, can I ask you - and Alvin, I'll get a final thought from you, as well: Did - this argument that he's trying to do too much, an argument that he answered very directly and repeatedly last night, Connie, how does that argument strike you? You're doing too much. You need to focus on one thing or the other thing. How does that argument strike you from where you sit?

Ms.�GUY: You know, I think the Republicans tend to try to pull the reigns back on him, as they do with any Democratic president. They're going to find complaints and arguments with everything he does, but if they would just bend a little, just bend a little and work with the agenda, I think that they would see that his ideas - that we can go - we can go far with his ideas.

He did remind everyone last night that yes, he did have to - we spent a trillion dollars trying to get - trying to recover from the danger zone that we were in. And going forward, we're - he's going to - he has a plan to take care of that trillion dollars. But he reminded everybody that when he walked through the door of the White House, he inherited almost $4 trillion in debt.

MARTIN: Okay, all right. Alvin Hall, a final thought from you, very briefly, very briefly.

MARTIN: I think that Connie's tone says it all. She has been given hope for the future, which is what he was trying to do, and she can see that some of his short-term strategies may be working.

MARTIN: Alvin Hall, he's our regular contributor on matters of personal finance and the economy, our Money Coach. He joined us from New York, our bureau there.

Connie Guy is a retired nurse, the former mayor of Mountville, Pennsylvania. She's somebody we check in with from time to time to get her read on things. She joined us on the line from her home. I thank you both so much for speaking with us.

Ms.�GUY: Thank you.

HILL: You're welcome.

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