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In Midwest, Obama Sings Praises of Stimulus Plan

President Obama spoke at a Caterpillar equipment plant in Peoria, Ill.
President Obama spoke at a Caterpillar equipment plant in Peoria, Ill. (By Bill O'leary -- The Washington Post)
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By Michael A. Fletcher
Washington Post Staff Writer
Friday, February 13, 2009

EAST PEORIA, Ill., Feb. 12 -- President Obama on Thursday touted the $789 billion economic stimulus package nearing congressional approval, telling workers at a huge manufacturing plant here that "a new wave of innovation, activity and construction will be unleashed all across America" once the plan is enacted.

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The stimulus package will help save and create millions of jobs, while providing increased unemployment benefits and health care to people thrown out of work, Obama said.

"It's not just our moral responsibility to help them, it also makes good economic sense: If you don't have money, you can't spend it," he said.

Obama made his remarks before about 250 Caterpillar Inc. workers at a tractor manufacturing plant here. After a banner year in which a strong global economy fueled strong profits, demand for Caterpillar products has dropped sharply in recent months as the recession has spread worldwide.

In recent weeks, the heavy-equipment manufacturer has announced plans to shed 22,000 jobs, and on Wednesday it announced plans to buy out an additional 2,000 workers. With the stimulus plan in place, Caterpillar chairman and chief executive Jim Owens has said the company will be able to rehire some of the laid-off workers.

"That's a story I'm confident will be repeated at companies across the country -- companies that are currently struggling to borrow money selling their products, struggling to make payroll, but could find themselves in a different position when we start implementing the plan," Obama said. "Rather than downsizing, they may be able to start growing again. Rather than cutting jobs, they may be able to create them again."

Jobs appear to be the top economic issue on the minds of Americans. A poll by the Pew Research Center for People and the Press said that the proportion of Americans citing jobs or unemployment as the nation's most important economic problem has more than quadrupled -- from 10 percent to 42 percent -- since early October.

While Owens supports the stimulus plan, he is part of a group of manufacturing executives who had expressed concern that a "buy American" provision in the stimulus legislation could lead to retaliatory actions by other countries. The provision would require infrastructure projects in the stimulus bill to be built with U.S.-made iron and steel.

The final version of the stimulus bill includes the provision, although it says it must be applied in a manner consistent with U.S. obligations under international agreements.

"Absence of that wording would be perceived as violating our trade agreements and risking retaliation by countries accounting for 80 percent of our exports," said Franklin J. Vargo, vice president for international economic affairs at the National Association of Manufacturers. "Even with that language, the provision affects countries not participating in the World Trade Organization agreement or not having a bilateral trade agreement with the United States."

But others applauded the provision, underscoring the ideological tension underlying economic policymaking. Scott Paul, executive director of the Alliance for American Manufacturing, called inclusion of the provision a "major victory for American manufacturers and workers."

Speaking to reporters on Air Force One, Obama press secretary Robert Gibbs said the provision in the bill "is the right compromise that respects the buy-American laws that we've had on our books for many, many years while also ensuring that the language doesn't create unnecessary trade disagreements in a time of economic crisis."

Many manufacturers also believe they would be helped by passage of the Colombia Free Trade Agreement, which Obama has opposed because of labor and human rights concerns.

The ideological strains caused by Obama's economic policies burst into view yesterday when Sen. Judd Gregg (R-N.H.) reversed his decision to become commerce secretary.

Obama's visit in East Peoria was his fourth stop outside Washington this week to promote his stimulus plan, which is on the verge of ratification in Congress despite near-unanimous opposition by Republicans.

The plan, a combination of infrastructure spending, tax relief and social service aid to help low-income people and the unemployed, could be approved as soon as Friday.

John Filson, a machinist who has been with Caterpillar for 14 years, said: "It is not going to help if you give the banks money when people are losing jobs. People need help, too."

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