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Welch: Stimulus package step in the right direction

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MONTPELIER – U.S. Rep. Peter Welch has a message for Vermonters: Emergency fiscal help is on its way.

Democratic leaders of the U.S. House unveiled an $825 billion economic stimulus package Thursday and Vermont's sole congressman said the funds will bail out the struggling state budget and help Vermonters who are suffering in this economy.

The emergency package contains $550 billion in investments in clean energy development, education and science, repairs for roads and bridges, increased unemployment benefits and health care initiatives. The remainder of the package is dedicated to tax cuts.

Welch, who started his second term in Washington this month, said the American Recovery and Reinvestment Plan meets his two goals to help out Vermont: Property tax relief for residents and investments to retain and create jobs.

"A big component of this plan is green energy tax credits and tax credits for renewable energy," Welch said during a telephone interview Thursday afternoon. "These will be essential in Vermont and give us a big boost as we move ahead."

It's not clear yet how much federal assistance Vermont may receive from this package if it is approved by Congress.

A small state minimum was not included, Welch said, because the funding will be coming to the states through existing federal formulas and programs – which he said will make it easier and quicker to send out the assistance.

"Generally, Vermont has done very well with these formulas," Welch said.

Some of the money will also go directly to municipalities, he said, to allow them to immediately begin local infrastructure and improvement projects.

Welch said this assistance won't solve all the country's economic problems, but he noted the federal economists warn that without this help, the United States would fall much further into its already year-old recession.

"This is an essential step, but it is not a cure," Welch said.

Democrats originally hoped to have the package approved and waiting for President-elect Barack Obama to sign on next Tuesday's inauguration day. But Welch said he didn't think that was ever a viable plan, noting that Obama's advisors "don't even have a place to hang their coats yet."

Welch said he anticipates that the House will approve the package by the end of January and the Senate will approve it by mid-February. If that timeline works out, the assistance should start going to the states immediately, he said.

"The money will go out right away," Welch said. "We know we need to act quickly."

Vermont officials began preparing this week for their economic bailout. Gov. James Douglas, who as the vice-chair of the National Governors' Association pressed Obama last year to quickly approve a stimulus package, set up the Vermont Federal Recovery Office.

The new office, directed by Jim Bush, the assistant director of program development in the Vermont Agency of Transportation, will act as the single contact point for the federal government to flow money down to the state.

During his weekly press conference Thursday, Douglas said he is setting aside his usual insistance that state budget holes not be filled with one-time assistance from the federal government because the economic situation for the state and the country are so dire.

He added that he has been in contact with Republicans in the U.S. Senate – many of whom are not yet on board with the stimulus package and worry about the mounting debt facing the country as the result of this new spending.

"I'm telling them that we need this support," Douglas said.

Welch said a key component of the proposal includes $30 billion for highway and bridge construction projects – with the requirement that the states match the federal funds waived, a boon for Vermont where state officials have $78 million of projects ready to go.

The idea of waiving the state matches was suggested by Sen. Susan Bartlett, D-Lamoille, the powerful chair of the Senate Appropriations Committee, during an economic roundtable hosted by Welch at the Statehouse late last year.

"That was an incredibly useful suggestion," Welch said. "We knew that needed to be included."

The proposal also includes $87 billion in aid to the states for their Medicaid programs, also with a waiver of the state funds match, and additional funding for schools' special education programs – another move that Welch said will provide property tax relief for Vermonters.

The bad news underlining the stimulus package is its affect on the national government's deficit. The Congressional Budget Office estimated this month that the federal government's budget deficit – essentially the country's credit card bill – would climb to $1.2 trillion.

"We are deficit spending," Welch said. "I am a big proponent of pay-as-you-go, but this is an emergency."

The incoming Obama administration has also vowed unprecedented transparency in how these funds are spent. House leaders said Thursday that once the package is approved, people can visit a special Web site to review how much money went where and why.

"This is taxpayer money, so transparency is key," Welch said. "We'll want input from citizens as to what is working and what isn't."

Contact Daniel Barlow at Daniel.Barlow@timesargus.com.