Senators in Washington say have reached agreement on a huge economic stimulus package designed to revitalise the U.S. economy
Members of both houses of Congress have reached a deal over U.S. President Barack Obama’s economic stimulus plan. The package, worth $789 billion, includes tax cuts and spending aimed at rescuing the U.S. economy. And it is composed of 42% tax cuts and 58% new government spending. Though, there have been a series of meetings to try to find a compromise position to debate a pared-down version of the original $900-billion plan to revive the States’ economy.
Senate majority leader Harry Reid, a Democrat, said the stimulus bill should create 3.5 million jobs. He added that more than one-third of it would be dedicated to tax cuts and incentives for middle-class Americans. Besides, Obama added that the deal “bridged differences” between an $820-billion House version of the bill and a $838-billion Senate version.
“The middle ground we have reached creates more jobs than the original Senate bill and costs less than the original House bill,” highlighted Reid.
Meanwhile, U.S. Treasury Secretary Timothy Geithner has unveiled a comprehensive bank bailout plan worth at least $1.5 trillion, which will have to be reconciled with the House of Representatives version.
Under the bank bailout plan, the size of a key Federal Reserve lending program will be expanded to $1 trillion from $200c billion. In addition, a public-private investment fund of $500 billion will be created to absorb banks’ toxic assets and could be expanded to $1 trillion.
On the other hand, new US employment figures were released on last month showing that nearly 600,000 jobs were lost in January, pushing the unemployment rate to 7.6%, its highest in 17 years. Consequently, oil prices have again fallen last month since the rising of U.S. unemployment has led to further fears of weakening demand for oil among US consumers.
The economic slowdown has curbed demand for fuel around the world. Its current price is more than $100 below the record price of close to $150 a barrel seen last July.
Officials from the producers’ cartel, the Organization of the Petroleum Exporting Countries (OPEC) have said that current price level is too low for its members to make enough revenue or encourage investment in new supply.
Last January, OPEC agreed to cut a further 2.2 million barrels per day (bpd) in a bid to increase the price, on top of the two million bpd scale-back it put in place in September, last year.
It was distinguished that Obama faces one of the worst economic crisis and, for him, one of the hot issue which has to be changed is energy as Americans spend $41 million per hour to get foreign oil.
Furthermore, Obama has made it clear that national energy policy needs to be taken in a new direction.
“We send a billion dollars to foreign nations every single day and we are melting the polar ice caps in the bargain,” said Obama. “That has to be changed.”
U.S. President’s goal is to have two billion gallons of cellulosic ethanol in use by 2013. He plans to use tax incentives, government contracts and cash prizes to help this industry mature and specifically wants to encourage farmer-owned refineries. He would like renewable fuel standards to increase, such that 60 billion gallons of advanced bio-fuels are in the fuel supply by 2030.
A National Low Carbon Fuel Standard is a mechanism that Obama plans to use that requires fuel suppliers to decrease carbon emissions from fuels by 10 per cent by 2020 and he specifically wants to encourage non-petroleum fuels to reach this target.
“The only way we are going to seriously reduce the price of gas is if we actually start investing in alternative fuels and we raise fuel standards on cars,” said Obama.
By 2025, Obama would like 25 per cent of U.S. electricity to be generated from clean, renewable sources including wind, solar and geothermal with a Renewable Portfolio Standard. Obama calls for $150 billion to be invested over 10 years in clean energy and infrastructure to support it. Investment in a national digital electric grid would allow greater amounts of renewable energy to be utilized and make plug-in hybrids more environmentally sound.
“For the sake of our security, our economy, our jobs and our planet, the age of oil must end in our time,” said Obama.