Spratt Statement at Hearing on Recovery Act

ouse Budget Committee Chairman John Spratt made the following opening statement at a hearing today, “The Recovery Act: Strengthening Our Economy.” The committee received testimony from three cabinet secretaries – Interior Secretary Ken Salazar, Agriculture Secretary Tom Vilsack, and Transportation Secretary Ray LaHood.

“Seven months ago, when President Obama took office, the country was in a fiscal tailspin and on the brink of a financial meltdown: a financial crisis had frozen credit, homes were foreclosing at record levels, the economy was losing an average of 700,000 jobs per month, and the stock market had lost nearly $10 trillion in wealth and was heading further downward. Congress and the Obama Administration took quick action to address the crisis. In February, we enacted the American Recovery and Reinvestment Act to create and save jobs through short-term investments that have both immediate and long-term economic impacts.

“That action has gradually begun to bear fruit, although we still have a long way to go before we return to where we want to be. It took years for the problem to build, and it will take time to recover fully. But we are no longer dealing with as severe a financial and economic crisis as we faced at the beginning of the year. While the country has lost 6.5 million jobs since the recession began in December 2007 – by far the worst postwar downturn in employment – we have now slowed the rate of job loss. The housing market is picking up again. Retail sales are turning up, and the forecast is for the economy to grow in the third quarter.

“Because so many Americans are continuing to experience the negative impact of this recession, even encouraging signs such as these cannot come fast enough. Yet, the Recovery Act is beginning to provide stability to get the economy moving and bolster hard-hit families, businesses, and states. Already, the Recovery Act has provided a tax credit for 95 percent of working families, assisted more than 12 million jobless Americans with extra unemployment benefits, and increased food assistance to low-income families. Already, states have drawn down more than $23 billion in additional Medicaid funds as they deal with record budget shortfalls. And the Recovery Act has already allowed tens of thousands of teachers, law enforcement, and firefighters to keep their jobs.

“I know that we all share the goals of putting people back to work and lowering the unacceptably high unemployment rate, of ensuring that local communities don’t have to lay off teachers and firefighters due to budget shortfalls, and providing necessary health care and food assistance to those who need help during this economic downturn. While we in Congress may have had disagreements at the time that the economic recovery legislation was passed, I believe it is important for all of us to come together to assess the results to date, to examine what is working and what needs more attention, and to consider the next steps in the country’s recovery.

“The economic recession that began during the previous Administration also has taken its toll on the federal budget, leaving the Obama Administration and this Congress with a massive deficit. Efforts to combat the economic decline – like the Recovery Act – have necessarily eroded the budget’s bottom line even further, and we must first get the economy back on track before we can balance the budget. At the same time, the unacceptably large deficits that we now are facing give us all the more reason why we need to ensure that the stimulus dollars are being spent as effectively as possible.

“We are fortunate today to have three of the most important people charged with implementing key components of the Recovery Act. They are – in the order of when their agencies were incorporated: Ken Salazar, Secretary of the Interior; Tom Vilsack, Secretary of Agriculture; and Ray LaHood, Secretary of Transportation. These three gentlemen need no introduction; they have years of experience working to improve the lives of Americans across the country through their various positions in business, government administration, and politics – we have a former governor, Senator, and Representative here.

“We look forward to hearing how your agencies are using the Recovery Act to provide immediate relief, to save and create new jobs, and lay the groundwork necessary for future investments in our physical and human infrastructure. Each of your agencies is focusing on different aspects of the Recovery Act, and we are interested in what you have to report after these first few months of implementation.

“We very much appreciate your joining us today. Before turning to you for your testimony, let me turn to our Ranking Member, Mr. Ryan, for any statement he cares to make.”