Economic management

Economic management
On February 17, 2009, Obama signed into law the American Recovery and Reinvestment Act of 2009, a $787 billion economic stimulus package aimed at helping the economy recover from the deepening worldwide recession. He made a high-profile visit to Capitol Hill to engage with Congressional Republicans, but the bill ultimately passed with the support of only three Republican senators.[121] The act includes increased federal spending for health care, infrastructure, education, various tax breaks and incentives, and direct assistance to individuals,[122] which is being distributed over the course of several years, with about 25% due by the end of 2009. In June, Obama, unsatisfied with the pace of economic stimulus investment, called on his cabinet to accelerate the spending over the next weeks.[123]


President Barack Obama signs the ARRA into law on February 17, 2009 in Denver, Colorado. Vice President Joe Biden stands behind him.In March, Obama's Treasury Secretary, Timothy Geithner, took further steps to manage the financial crisis, including introducing the Public-Private Investment Program, which contains provisions for buying up to $2 trillion in depreciated real estate assets that were deemed to be weighing down stock valuations, freezing the credit market and delaying economic recovery. On March 23, The New York Times noted that "(i)nvestors reacted ecstatically, with all of the major stock indexes soaring as soon as the markets opened."[124] Along with spending and loan guarantees from the Federal Reserve and the Treasury Department, about $11.5 trillion had been authorized by the Bush and Obama administrations, with $2.7 trillion actually spent by the end of June 2009.[125]

Obama intervened in the troubled automotive industry[126] in March, renewing loans for General Motors and Chrysler Corporation to continue operations while reorganizing. Over the following months the White House set terms for both firms' bankruptcies, including the sale of Chrysler to Italian automaker Fiat[127] and a reorganization of GM giving the U.S. government a temporary 60% equity stake in the company, with the Canadian government shouldering a 12% stake.[128] He also signed into law the Car Allowance Rebate System, known colloquially as "Cash for Clunkers" bill, on August 7, 2009.[129]

In the third quarter of 2009, the U.S. economy expanded at a 2.8% annual pace.[130] Obama has claimed that the stimulus package helped stop the economic downturn.[131] Various economists have credited the stimulus package with helping to create economic growth.[132][133] However, unemployment has continued to rise to 10.2% (the highest in 26 years),[134] and the "underemployment" rate rose to 17.5%.[135] In mid-November, Obama said he was concerned that the excessive deficit spending could cause the economy to slide into a "double dip" recession.[136][137]