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First is stimulus 2.0 coming soon.
I'm Jennifer Griffin in for Greta Van Susteren 787.
Billion dollars later some Democrats say.
We need another one to save the economy Republicans see it as a mid term election rallying cry so -- -- right we have both sides covered first senator Richard Shelby is here with me in Washington.
He's the ranking Republican on the senate banking committee he opposes any talk of any more -- -- senator thanks for being here thank you.
Now I remember what you said about the first stimulus he said it was a disgrace I can only imagine what you think about this talk of a second stimulus.
Why is this not a good idea.
Well it's not a good idea of a lot of reasons but one.
Of this stimulus we have put together that -- most of the money has not even been spit you know in other words a stimulus.
Has not been implemented yet.
And now they're talking about another one.
In I think it's a dumb idea I think that you will not work for most economists I wouldn't say almost the -- was so overwhelming majority.
Would say we don't need a stimulus.
And even the Washington Post today.
In an editorial you may have seen.
The and in the big win under Obama and now they're talking about another win.
Said basically -- -- wanna quote remark.
-- -- -- They were concerned about the the credit worthiness of our paper down the road no -- -- bonds if we continue to borrow and borrow.
We cannot -- way to prosperity.
Know what I don't understand is why so little of this 787.
Billion dollars has been spent about 10% that has been spent.
And we were told at the time when this was rushed through in February that these work that shovel ready projects why only 10%.
Well just wouldn't say talking about shovel -- obviously a lot of shuttles were ready.
And took to put people back to work to be allow these things.
And there's a lot of politics in this stimulus is we -- know.
Democratic politics I felt that was a mistake I know a second stimulus would be a mistake because we don't borrow that money.
And and he won't turn the economy around.
A lot of things will turn the economy around but -- -- this stimulus will.
-- Treasury Secretary Timothy Geithner was on the hill today he was.
Before an oversight committee hearing here's what he said let's hear your response.
The stimulus package is on its expected path in terms of the rate of change and that in terms of put money in the pockets of taxpayers.
To provide substantial forms of this is to states to reduce the risk that they're forced to fire tens of thousands of teachers workers and firemen.
And that there are very substantial investments in infrastructure products.
-- start to -- -- already started take effect and we'll have their maximum impact on the economy in the second half of this year.
So my own sense is I think this is the consensus of broad base economists that there's been substantial improvements.
What was the worst recession globally we've seen in generations and those are the result of the actions -- congress took.
Administration put in place and complementary actions taken my governments around the world.
To -- help address what is the worst crisis we've seen in a long period of time.
Do you agree that the crisis would have been worse if there hadn't -- the stimulus package.
I don't agree I think it.
That would be -- out there.
Because we are in in.
A world recession you know -- contraction of the economy.
But the sooner.
We face up to the -- and the sooner we straighten out our banks.
That's the key where planes can start lending there's a liquidity crisis in this country even after the tar.
Bill out of the banks a lot of banks aren't lending small medium -- businesses are dying for capital and for credit.
And that hadn't happened yet sector Geithner knows that too.
Well the Washington Post -- reporting tonight that in fact the Obama administration is considering using some of the banking money.
For small businesses -- is that the answer well I don't know it's an answer is something we ought to consider.
If there's money going to be out there in this -- already been appropriating go far that -- so to speak.
Mark for the banks in the banks aren't lending if we can get some money into the hands of a lot of small medium sized businesses.
That's where -- job creation come from and America.
OK thank you very much for being with -- here and we appreciate your thoughts on the stimulus will have to wait and see some economists are saying that.
In essence the economy will turn around by the end of this year but we'll have to see if that is in -- the case but thanks for being -- had eaten -- Okay pencil got the Pennsylvania governor Ed Rendell a Democrat is open to the idea of a second stimulus he joins me.
From Philadelphia governor thanks for being with us.
You even get there.
So tell me why you just heard that senator Shelby he's obviously opposed to a second stimulus why do you think we need one.
-- personal I'm not the point where I think.
We need a second stimulus understand.
Senator -- makes a point.
We haven't seen the crux of that this first stimulus put into action yet.
And when we do we'll be able to judge how successful it is at that point we can make a decision on whether we have a second stimulus the president is exactly right.
He's not for a second stimulus yet.
But he's not taking it off the table and given the mercurial nature of the economy.
That's the right position to take let's see how it works it's starting to work fairly well in Pennsylvania and I think we're going to see.
An explosion of new jobs created in July August September October November.
We've already stopped the loss of jobs that was appointed Tim Geithner made.
Had we not gotten the state of Pennsylvania's government had not gotten the stimulus money that we got.
To help us on Medicaid and help -- collections.
We would probably about to lay off five to 101000 state county and municipal workers.
And in fairness to President Obama the Congressional Budget Office did say that.
About a quarter of the stimulus money.
Was expected to be paid out by the end of this year they weren't expecting all -- -- to come in at the beginning of this year was going to be over two years.
Is that the right way for it to come out slowly I mean we make a big point about this 10% being spent.
Well it's not really.
So as you pick for example in Pennsylvania we had our transportation plan approved by the federal government on March 12 pretty soon after the stimulus aside.
It's now four months later and we have over 50% of our projects we have 242 projects from the stimulus money.
131 of them work has begun and hiring on those projects has started it will ramp up dramatically.
The other half of our projects.
Were almost all be under way by Labor -- so it's going to be much faster in the infrastructure side.
Then two years we're gonna see the impact of that.
In the first six to nine months and if we do have another stimulus Jennifer and I love to -- senator -- is not online.
But I think everyone agrees Republican and Democrats.
That the best stimulus is infrastructure building bridges roads highways things that we actually need wastewater systems.
And they know everyone knows those produces British jobs.
And they produce orders for Pennsylvania an American factories steel factories asphalt concrete lumber.
So if we haven't had a second stimulus.
Programs that are social programs are long range programs -- -- a tight stimulus 20253.
And a million dollars.
-- the American infrastructure that will produce jobs orders for US factories.
Well I guess what I don't understand is why weren't those infrastructure projects in the first stimulus package you've got 787.
Billion dollars what percentage of that.
We're supposed to be infrastructure projects.
About a 180.
Billion dollars were infrastructure projects.
Some of them long range infrastructure like building that -- the electricity grid which is vitally important but isn't gonna happen quickly.
I think the reason is.
Billion of it was tax cuts.
And I think the Obama administration prepares tax cuts in in part.
To try to get Republican votes which as we know they virtually didn't get any.
So I think that tax cuts and dominated almost half of the stimulus and that reduce the infrastructure spending but I think we've learned a lesson.
So if there's a second stimulus let's put it all -- the hard infrastructure construction.
Factory's everybody going back to work construction.
Jobs produced how hard infrastructure stimulus.
In the White House has been somewhat coy as to whether there really considering a second stimulus but you.
This that talk began in fact earlier this week when Laura Tyson his economic advisor to the president.
Without in the Singapore do you think the White House was floating that idea through her as she spoke and Singapore.
It's hard for me to say but but I think the president's position is Denon.
It's too early to tell and even as someone like me agrees with that it's much too early to tell whether we need one.
But we can't rule it out I mean we've got to see where the economy is in September -- you're right.
Every economist I've read in and our own consultants in Pennsylvania tell us that in the last quarter of -- we're gonna see growth return.
Not explosive growth but growth -- time so we have to see where everything is before you make that judgment.
OK governor thanks for being with us.
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