Obama to sell stimulus package to a wary Savannah

By Michael A. Fletcher
Tuesday, March 2, 2010; A03

SAVANNAH, GA. -- To hear President Obama tell it, his plans for reshaping the nation's economy are aimed at helping people like Ray Gaster, whose small chain of lumberyards here has been walloped by the recession.

Gaster's business has plummeted by more than two-thirds since 2006. At the same time, health insurance costs are becoming an increasingly heavy burden. Yet Gaster has nothing but skepticism for Obama policies designed to lighten that load. He says the economic stimulus package has been all but invisible to his business, and he fears the White House's renewed effort at overhauling health care would only make a bad situation worse.

"You know what it's like working with the government. It's just impossible," he said. "The health-care system we have now isn't perfect, but at least it works."

Obama plans to visit this charming coastal city on Tuesday to lead a day of meetings aimed at highlighting his economic policies and shoring up support for his ambitious but endangered domestic agenda. Success could ultimately turn on his ability to reshape perceptions of a stimulus plan that the White House says has pumped more than $130 million into the local economy, but many here grumble about what they see as its lack of effectiveness.

In Savannah, as elsewhere, that view is feeding a broader distrust of government that threatens to undermine the president's ambitions and political support.

"I think that people don't see the impact because it is not there," said Rep. Jack Kingston (Ga.), who like nearly every Republican in Congress voted against the stimulus measure a year ago and opposes much of the rest of Obama's domestic agenda.

Even some supporters of the president's policies complain that the stimulus money is not flowing fast enough. "The speed in which the applications have been approved has really been a little frustrating," said Savannah Mayor Otis S. Johnson (D), who nonetheless praised the plan for saving teaching and other public service jobs while providing funding for long-overdue projects.

"We are at the end of the first year of the stimulus, and we would think that more of the money would be out now," the mayor said.

Such criticism frustrates the Obama administration. It calls the stimulus plan an unqualified success, bringing $21 million in infrastructure money, $38.5 million in education funds, $4 million in transportation aid and $20 million in small-business loans to Savannah alone.

"The Recovery Act put 63,000 people back to work in Georgia, provided tax cuts to nearly 3.5 million Georgia families and made it possible for more than 1,200 small businesses to grow and hire," said Amy Brundage, a White House spokeswoman.

Obama has defended his economic policies -- from the bank and auto bailouts to the $862 billion stimulus plan, health-care reform and a cap-and-trade system to limit greenhouse gases -- as aimed at helping the nation recover from the severe downturn while seeking to rebalance an economy that has gotten out of whack.

The president frequently notes that the economy has tilted toward giving too many of its rewards to top income earners and relying too heavily on unbridled consumerism. The government can pave the way toward a more prosperous and equitable future, he says, by investing in education, infrastructure, health care and renewable energy. But if the attitudes of small-business people and others here are any indication, convincing people that government is up to the job will be difficult.

"To many people, government is not seen as a problem solver, but a problem causer," said Charles S. Bullock III, a University of Georgia political scientist.

Trey Cook, the genial chief operating officer of Savannah Tire, a car-repair firm that has been in his family for three generations, counts himself firmly in the camp of the wary. "What's that old line -- 'Hi, I'm the government. I'm here to help'?" Cook said. "I don't buy that."

Still, he feels the pain of the economic downturn and the skewed economics of health care. His company runs several locations around Savannah, and it has 125 employees, down 25 over the past two years. His payroll is down $30,000 a week over that time. Ask about the impact of the stimulus plan and he says: "I haven't seen where it has added any jobs."

His firm offers health insurance to workers, which costs the company $425,000 a year, even though only two-thirds sign up for it. Other employees are covered by their spouses, and maybe 10 percent, Cook estimates, go without.

He wants health-care reform, but he does not want government to play a big role in the final product. "The things we heard about health care as a business owner are scary," he said. "That puts the brakes on decision making. You certainly aren't going to make any decisions to expand."

Cook said the best way to get business people like him to hire more workers is to have government lower taxes while easing up on mandates and regulations. "I know people laugh at the term 'trickle-down economics,' " he said. "But it works. I hire more people, they get to spend money, and so on."

His is a common refrain among business owners in Savannah. "The stimulus plan has had only a negligible, if any, effect on the local economy, outside of government," said Gaster, who flew Chinook helicopters in Vietnam and built his business from scratch, starting in 1985. " What we need is an increase in the volume of business. Period."

Asked whether the stimulus's weatherization provisions have helped him sell business supplies, he feigned disbelief. "If I had to depend on weatherization," he said, "I'd be out of business."

Even amid the complaints, the economy here has held up better than most. Savannah's unemployment rate is 8.4 percent, well below the national rate of 9.7, thanks to the throngs of tourists who wander the city's sprawling historic district, the bustling port and the city's proximity to major military installations, including Fort Stewart, Ga., and the Marine Corps installation at Parris Island, S.C.

The stimulus plan has played a role, too, although not everyone recognizes its impact. The plan provided $33 million to perform maintenance dredging and spoil containment in the port, millions more to keep teachers on the payroll, money to weatherize some public housing units and demolish others, support for people thrown out of work and tax breaks for 95 percent of workers and many small businesses.

"The president's challenge is to come up with an explanation for his policies that people can understand and see," said Pete Liakakis, a Democrat who chairs the Chatham County Commission. "A lot of people don't know what's happening or understand what's happening. But they hear people talking about trillions and trillions of dollars, and they wonder, 'Who's going to pay for that?' "

Jan Macchi, the local branch manager for Loomis, a cash-management firm, struggles to reconcile what she hears about the economy with what she sees before her. Although unemployment is high, she said she spends an undue amount of time trying to find reliable armored-car drivers and other employees for jobs that offer up to $14 an hour to start, plus benefits.

Turnover in her branch has been 80 percent since May, she says. "It's like people don't want to actually do the work once they get a job," she said.

Her experience has led her to conclude that the president's plan to intervene in the economy is unnecessary. She also said it has left her afraid to spend. She is planning to add a half-bath, roof shingles and a new air conditioning unit to her home at the Landings, a gated waterfront community just south of Savannah. She said she has the money, but she is still waiting.

Asked for what, she hesitated before saying: "All this Obama stuff has me concerned."

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