News Column

The Road Ahead: The Obama Administration's 5 Key Issues

Page 2 of 1



WASHINGTON--Eight days into his presidency Barack Obama watched the U.S. House pass more than $800 billion worth of spending and tax cuts -- an unprecedented package in scope aimed at resurrecting an economy mired in recession.

His early victory, despite steadfast opposition from House Republicans, showed the potential path ahead for the Democratic president: Mr. Obama can reach out to the GOP as much as he wants, but he doesn't really need their support in the House.

He will need to curry more favor in the Senate, where Republicans hold just enough seats to block any legislation.

Below is a look at the road ahead on five key issues.

Access to Capital

Like the rest of America, Hispanics rank the economy as the top issue of the day. And for many it's personal. They've been denied a loan themselves or worked on a construction project halted due to lack of funding.

Economists agree that the country's dismal financial state will not turn around until banks begin to lend money again and consumer confidence grows.

Congress had hoped its $700 billion bailout package passed last fall would be a magic bullet to spark new lending. But plagued by questions about where and how the money was to be distributed, now lawmakers are trying to reform the Troubled Assets Relief Program by adding oversight of how Treasury doles out the money.

And where nothing existed to bring women and minority-owned institutions into the program before, the House now wants an "Office of Minority and Women Inclusion" established at Treasury.

"We need to look at our procurement processes for Hispanic contractors and we need to make sure they get their fair share," said Rep. Nydia M. Velásquez, D-N.Y., chairwoman of the House Small Business Committee.

Meanwhile, Obama's economic stimulus package would generate nearly $1.2 billion in new loans to Hispanic-owned firms, Velásquez said, based on federal lending trends since 2004.

Education

Obama's pledged social reforms will face the most scrutiny in Congress, where after passing two bills totaling more than $1.5 trillion within six months of each other, lawmakers are eager to show constituents they can exercise some fiscal restraint.

"Everything is going to go through a lot of hurdles just because of the economic situation," said Rep. Xavier Becerra, D-Calif., the top-ranking Hispanic in the House.

But he said that does not mean Democratic leaders will dial back their education agenda.

"It's like a patient following half the orders of a doctor -- that's not how to take care of yourself," Mr. Becerra said.

Business groups support changing No Child Left Behind to decrease dropout rates, invest in English Language Learners, and close the achievement gap facing minority students.

With hundreds of schools still not making the mark and the federal government's 2014 deadline for school proficiency closing in, some education experts have suggested scrapping the 2014 goal and moving away from what has become near-constant federally mandated, standardized testing of students.

The stimulus bill included funding for special education and low-income students, and requires states to maintain their current funding efforts. But education reforms, like new investments in and added accountability for charter public schools, will take a back seat temporarily to economic policy debates.

Health Care

Looking at the debates looming ahead from his new House office is freshman Rep. Ben R. Lujan, D-N.M. Elected with the Obama tide, Lujan is the newest Hispanic representative in Congress and happy to take some cues from the White House. (Puerto Rico's new non-voting delegate Pedro Pierluisi is also Hispanic.)

"Many of the policy recommendations from Obama and Congress are very much in line," said Mr. Lujan, pointing to the first bill the president signed into law guaranteeing equal pay in the workplace and another to expand government health insurance to cover at least 6 million more children.

"Putting women and children first really sets the tone," he said. But he acknowledged the nation's health care woes have been much easier for Washington politicians to diagnose than to treat.

With Hispanics estimated to be nearly a third of the country's 47 million people without health insurance, even the U.S. Hispanic Chamber of Commerce that typically backs market-based solutions said there will be "a need for a strong federal role" in lowering health care costs and expanding coverage for uninsured families.

Energy Markets

From Detroit automakers to California regulators, President Obama was clear from his first week in office what change will mean for energy.

He put the Big Three automakers on notice that they must produce vehicles that get at least 35 miles per gallon by 2020. And he announced the Feds would reconsider allowing California and other states to set tougher air pollution restrictions than the national government -- something the previous administration had not allowed.

But the pressure will be on Congress to finish the energy agenda -- one that completely stalled in the Senate last summer. At the heart of the plan is likely to be a massive cap and trade system that would have polluters pay fines for exceeding carbon emissions caps and allow cleaner companies to sell or trade their unused emissions allowances, generating millions of dollars for investment in wind, solar and geothermal power.

Two Californians will have a lot to say in all of this. Democrats Sen. Barbara Boxer chairs the Senate Environment and Public Works Committee and Rep. Henry Waxman heads the House Energy and Commerce Committee. This year's Boxer bill is expected to be a streamlined version of the package that failed last year.

In the House, lawmakers say the starting point for a climate change bill moved "a little to the left" when Mr. Waxman took the gavel from former chairman Rep. John D. Dingell, D-Mich., who some saw as too friendly to his home state automakers.

Whichever bill helps create the green jobs, Rep. Velásquez knows where she wants them to be. "We have to ensure that the green jobs of the future are located in areas near Latino communities," she said, so Latino workers and entrepreneurs can play a role in the new economy.

Interest Rates

Don't look for interest rates to get any lower -- they're already close to zero. But the Federal Reserve indicated in January it could try other non-traditional methods to further spur the economy.

With the Fed keeping rates in the zero to 0.25 percent range, rates on small business, consumer or home loans are likely to remain low, the bank said.

So what could the nation's central banker do to further aid business? One thing it mentioned as a possible strategy would be to buy long-term government debt.

Buying bonds would inject needed cash into the financial system, ideally loosening up banks that have tightened lending practices in the wake of record home foreclosures.

But the reality is monetary policy is already getting into the area of the creative. As one aide on the House Small Business Committee said, "We're as low as we can go."


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters