Sheikh Zubair’s Blog

Obama set to sign stimulus plan

Posted on February 17, 2009. Filed under: finance, politics |

US President Barack Obama is due to sign his hard-fought economic stimulus plan in Denver, after Congress approved the $787bn (£548bn) package last week.

The unusual ceremony is being held at a Denver museum, away from the partisan tensions still gripping Washington.

The plan got no Republican support in the House of Representatives and just three Republican votes in the Senate.

Republicans say the tax cuts are insufficient, and that the economy will be saddled with debt for years to come.

The signing of the massive stimulus measure is designed to start the flow of federal money toward infrastructure projects, health care, renewable energy development and conservation programmes.

The approved version of the plan is split into 36% for tax cuts and 64% percent in spending and money for social programmes.

STIMULUS PACKAGE $240bn in tax breaks for individuals and businesses $140bn for health care $100bn for education $48bn for transportation projects Source: Associated Press Battle exposes partisan rifts Send us your comments

Protectionism

The bill also includes a controversial “Buy American” provision that, despite being watered down, has angered US trading partners.

On Monday, Brazil’s Foreign Minister, Celso Amorim, threatened to challenge the legality of the clause at the World Trade Organization (WTO).

“It’s a complex legal analysis, but we’re doing it,” Mr Amorim told state television. “[Going to the WTO] is a real option,” he added.

The approved plan stipulates that public works and building projects funded by the stimulus use only US-made goods, including iron and steel.

The EU and Canada had earlier said that provisions favouring American-produced materials for government projects risked provoking retaliatory protectionist measures.

Earlier this month, Brazil’s President Luiz Inacio Lula da Silva told the BBC that in the good years, the rich countries had talked a lot about free trade and the market.

Now they had created a crisis they shouldn’t turn to the protectionism which had so often held the world back, President Lula said.

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