As President Barack Obama begins his term of office, AARP Segunda Juventud examines how the changes heralded by the new White House leadership will impact older Hispanics. Part VII: The Economic Stimulus Package
President Obama’s massive stimulus package will pour roughly $787 billion into social programs, infrastructure, health care, and technology in an attempt to curb taxes while bolstering businesses, generating jobs, and stabilizing neighborhoods threatened by foreclosures and an unraveling real estate market.
Major Hispanic groups support the effort chiefly because it will increase spending on an array of social programs—from food stamps to Medicaid—that help low-income and elderly Latinos. The groups also hope the package’s $150 billion for building roads, bridges, and other construction will help stem the rising unemployment rate that in February was 10.9 percent for Hispanics, compared to 8.1 percent for all Americans.
But how much relief will the measure, the American Recovery and Reinvestment Act of 2009, deliver directly to working families and individuals? Unlike the 2008 stimulus—which paid taxpayers up to $600 for individuals and $1,200 for married couples, with additional payments for families with children—this year’s stimulus package focuses on revving up the economy and generating jobs, with individual relief coming in the form of tax breaks, health care subsidies, and increased unemployment benefits.
Representative Nydia Velázquez, D-NY, one of the stimulus plan’s strongest supporters in Congress, points out that if the act’s goal of saving or creating 3.5 million jobs is met, working families and individuals will benefit. “Only if we get people back to work and help them afford their basic needs will spending start up again and our economy begin to recover,” says Velázquez.
This rings especially true for Hispanics, who are more likely than most other Americans to have lost their jobs or homes in the downturn. In fact, more than 75 percent of Hispanics surveyed in December 2008 by the Pew Hispanic Center said their personal finances were in either fair or poor shape. Nearly one in 10 Latino homeowners said they either missed a mortgage payment or couldn’t make full payment, and six in 10 reported foreclosures in their neighborhoods. Nearly half said they delayed or canceled plans to purchase a car or some other major purchase.
Hispanics 55 and older are in even greater financial straits: 16 percent said they owed much more than they could afford in credit card and other types of debts. Those older Hispanics are also more pessimistic than younger Latinos that their financial situation will improve.
Useless Spending or Incredibly Necessary?
In signing the stimulus into law on February 17, Obama said his administration had “inherited an economic crisis as deep and as dire as any since the Great Depression”—deep and dire enough to move Congress to act swiftly, although the measure’s gargantuan cost and scope generated bitterly partisan debate. Only three Republicans, all in the Senate, voted for the plan. The GOP derided the stimulus as wasteful, useless spending.
The House Republican Conference claims the package will advance a Democratic agenda but do little to rev up the economy. Questionable allotments include $50 million for the National Endowment of the Arts, $200 million for AmeriCorps and other “paid” volunteer programs, $198 million to compensate certain Filipino World War II veterans, and $210 million to modify and upgrade local fire stations. The GOP wants to spur economic growth primarily through tax breaks instead of massive spending.
“We need a bill that creates jobs, and the best way to do that is by encouraging investment and letting Americans and small businesses keep more of what they earn,” says House Republican Leader John Boehner of Ohio.