Quick action on economy tops wish list; area Democrats seek stimulus for autos, jobs

11/9/2008

With a strengthened Democratic majority in Congress and President-elect Barack Obama from the industrial Midwest, Democratic lawmakers in Ohio and Michigan expect action to beat back an economic slump that has hit auto manufacturing states hard.

And they want it fast.

On Friday, Gov. Ted Strickland told The Blade that Congress should pass an infrastructure bill to put people to work immediately, help the states with Medicaid funding, and extend unemployment benefits.

"I would hope the Congress, the current Congress, would take action long before Barack Obama becomes president. They'll be going into lame-duck session, and the economy is in such a crisis state that we ought not to wait until Jan. 20," Mr. Strickland said.

He said the states need a stimulus package far larger than the "modest" $1.7 billion capital program he recently pushed through the Ohio General Assembly.

"I would like that to be a fairly robust federal initiative," he said.

A similar sense of urgency is in the voices of Democratic Congressmen Marcy Kaptur of Toledo and Mark Schauer of Battle

Creek, Mich., who defeated Rep. Tim Walberg (R., Tipton) on Tuesday in Michigan's 7th District, which includes Hillsdale and Lenawee counties.

Two GOP congressmen - Rep. Bob Latta of Bowling Green and Jim Jordan of Urbana - didn't call for any additional spending but rather returned to Republican priorities that they acknowledge will take second billing in the new administration, at best.

Miss Kaptur has said she hopes retooling the auto industry to make clean-energy vehicles and constructing high-speed rail lines are priorities that Mr. Obama, coming from the fellow Great Lakes state of Illinois, will get behind.

"First we need lifeline attention, and that means first of all extension of unemployment benefits and programs to help people through the winter months," Miss Kaptur said.

After that, the government should agree on public works "as a way of working with our communities to begin working on moving dollars into real projects rather than paper transfers to Wall Street."

And she called for the federal government to refocus on the causes of the credit crisis, which she says is being intentionally worsened by large national banks to concentrate the industry in a few hands and to buy up real estate at fire-sale prices.

Specifically, Miss Kaptur called for the Federal Deposit Insurance Corp. to enact the "net worth certificate program" and called on the Securities and Exchange Commission to value defaulted loans at their true value, not an "arbitrary index," known as mark to market.

Both are accounting procedures that she says would allow banks to adjust to the reduced value of their mortgage assets and make loans more freely.

"Neither Senator Obama nor Senator [John] McCain referenced this when they both voted for the bill," Miss Kaptur said, referring to the $700 billion rescue package that passed recently. Miss Kaptur voted against the bailout.

"If the administration had done this we would not be driving the economy further into the Dumpster."

Mr. Schauer said his three top priorities "all relate directly to jobs right here in Michigan."

He said the first priority is to address trade policies that have cost Michigan hundreds of thousands of manufacturing jobs.

The second priority is to help stabilize the domestic auto industry, and the third is to support retraining and investment in green technology to put manufacturing employees back to work.

"A top urgent priority for this nation is the creation of green-collar jobs. In Michigan and Ohio and surrounding states, we're going to see creation of hundreds of thousands of jobs in clean, renewable energy. I'm pleased that President-elect Obama has that as a top priority," he said.

Although both states' governors are Democrats, as are the members of Congress from greater Toledo and Monroe, there may yet be political hurdles to overcome.

Mr. Obama's chief of staff, U.S. Rep. Rahm Emanuel (D., Ill.), was in charge of getting the North American Free Trade Agreement through Congress when he was on President Clinton's staff in 1993. That brought him into conflict with Miss Kaptur, a devout foe of the agreement that she says has been devastating for American's manufacturing economy.

Regarding Mr. Emanuel, Miss Kaptur says only that they "don't agree on a number of economic issues."

She said Mr. Emanuel's job will be to carry out Mr. Obama's campaign promises. One of those promises was to revisit NAFTA and seek changes that would set higher standards for wages, working conditions, and environmental regulations in other countries.

"President-elect Obama will be the president, and he will have to turn into law or make proposals to Congress many of the promises that were made during the campaign, so to me I think the American people are looking to the president," Miss Kaptur said.

Mr. Strickland and Michigan Gov. Jennifer Granholm were ardent supporters of Mr. Obama's rival for the Democratic nomination, Sen. Hillary Clinton (D., N.Y.).

Mrs. Clinton won the Ohio primary in a hard-fought battle in which Mr. Strickland stumped on her behalf.

In Michigan, Ms. Granholm not only supported Mrs. Clinton but helped the effort to move up Michigan's primary in what many thought was tailor-made for Mrs. Clinton's candidacy.

Both governors came on board with Mr. Obama in the general election, and Mr. Obama won both states in his battle against Republican John McCain.

In what may be a sign that Mr. Obama is willing to forget the past, Ms. Granholm was invited to join his economic transition team, which met Friday for the first time. She sat next to Vice President-elect Joe Biden and one seat away from Mr. Obama.

Mr. Strickland said his campaigning for Mr. Obama was "robust." He also said he has a friendship with Mr. Emanuel going back to 1993 when Mr. Strickland was a member of Congress.

"I know him well. We have a terrific relationship and have for many years, so I was happy about that appointment because I think that will give us a direct entree into the White House," he said.

"Whether Ohio would be punished in any way because of my support for Senator Clinton, I would doubt that would happen. That doesn't seem to be the way Barack Obama operates," Mr. Strickland said.

On Thursday, Ms. Granholm sent the Democratic leaders of the House and Senate a letter outlining her priorities for Michigan, leading with - as in Ohio - a public works bill.

"In Michigan we have at least 70 ready-to-go infrastructure projects worth approximately $263 million that could immediately create over 4,000 jobs. The only obstacle stopping these investments is a lack of federal funding," she wrote.

She called for assistance for Michigan residents facing home foreclosures as well as the extension of unemployment benefits for 13 weeks to help 44,000 people whose benefits have expired.

U.S. Rep. John Dingell (D., Dearborn) said in a statement Friday that the auto industry is in "great peril."

"I am pleased that President-elect Obama has identified the American automobile industry as the backbone of American manufacturing," Mr. Dingell said.

He said Mr. Obama pledged to help the domestic automobile manufacturers get "quick access to the tools they need to weather this financial crisis and create the next generation of fuel-efficient vehicles."

On the Republican side, Mr. Latta said he believes the Democrats will reinstate the ban on off-shore oil drilling and will fail to advance policies that expand cheap energy in the United States, such as so-called clean coal.

"Energy is at the top of my list," Mr. Latta said, noting that his district, despite its rural appearance, is one of the top manufacturing districts in the country.

He said solar panels and wind turbines don't generate enough electricity to supply the "base-load capacity" that factories in his district need.

Urbana Republican Jordan summed up the coming session in terms of girding for battle - on taxes, labor legislation, and abortion.

"They've got the numbers. We can introduce all the legislation we want and it's not going to pass," he said.

"I'm sure there's going to be a lot of fights. It's just the nature of the business," Mr. Jordan said.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.