CHAPTER 12:WOULD PRESIDENT OBAMA REVERSE THE CYCLE OF HYSTORY?

HISTORICAL ASPECTS By: Tessa Satterlee

20081. Troubled Asset Relief Program (TARP)

• Signed by Bush to restore the stability of the financial system.

• Treasury Department to buy or insure $700 of ‘troubled asset’s’ from banks so they could balance their books and avoid any more losses.

• Under Obama almost all of these loans and grants were repaid by 2010

• Decreasing the actual cost to $30 Billion

2. Election of Barack Obama• Won by a landslide• Most one-sided Democratic Victory since 1964• Joe Biden as Vice President against John McCain

and Sarah Palin• Within his first year, Obama made great progress in

fulfilling his campaign promises.• But had not made significant progress in creating

jobs or in decreasing foreclosures.• Won Nobel Prize for Peace in Fall 2009

20091. Tea Party began

• The tea party has been around doing protests, but it wasn’t until February 19th that they had their first national protest that made national news, and they became noticed.

• Grassroots movement that calls awareness to any issue which challenges the security, sovereignty, or domestic tranquility of our nation.

2. General Motors Bailout/force sale of Chrysler Corporation• Sales declined form $15 million to $8 million cars per year.• Obama invested directly into Gm with the TARP funds, which then

brought the governments ownership to 60%• ‘Cash for clunkers’ program. To encourage people to buy new

vehicles.• Convinced Fiat to buy a significant share of Chrysler. GM and

Chrysler to restructure and build more fuel efficient cars.• BY spring 2010 GM moved from huge losses to making profit.• This saved many peoples jobs.

3. American Recovery and Investment Act (the Stimulus Plan) (Feb) • Disguised social welfare program • $787 billion went to welfare programs in trying to create and

maintain jobs and increase economic efficiency.

4. Race to the Top Fund $4.29 billion (July)• Obama and Secretary of Education Arne Duncan • Proposed to replace the No Child Left Behind Act. • States were allotted a certain amount of points based on certain

aspects like,  satisfying certain educational policies, such as performance-based standards for teachers and principals, complying with Common Core standards, lifting caps on charter schools, turning around the lowest-performing schools, and building data systems.

• These points added up would then allot them money based on their placement

20101. HIRE Act (Hiring Incentives to Restore Employment) (March)

• Provided tax credits to small businesses that would hire new workers.• Wanted $150 billion but was encountered Republican opposition. • Funding of $17.5 billion after gaining 13 Republican Senators support.

2. Patient Protection and Affordable Care Act (Obama Care)(March)• Help give insurance to 32 million additional Americans by 2014

3. Dodd-Frank Wall Street Reform and Consumer protection Act of 2010 (July)• Biggest overhaul of financial services industry since the 1930’s • This was to promote financial stability in the US. • This was done by improving accountability and transparency in the financial in order to protect the American taxpayer by

ending bailouts, protecting consumers from abusive financial service practices, along with many other purposes.

4. Midterm Elections • By this point Obama lost significant support because unemployment still remained near double digits, Republican criticism of

the Stimulus Plan, TARP and rescuing GM had decrease the Democratic popularity. • Confusion happened with the TARP and the Stimulus plan, voters didn’t know the banks had repaid the their amounts of TARP

investments. • Administration failed to state the positive outcomes of the Stimulus Plan • Obama had failed to receive credit for his health care and financial reforms because these policies would not be fully enacted

for year to come.

5. Middle Class Tax Relief Act (Mid December)• Basically a second round of stimulus • Package would provide $858 billion of stimulus to the economy. • Most of the money would go to middle class families.

WHICH POLICY WAS ACTUALLY A SOCIAL WELFARE PROGRAM IN

DISGUISE?

A. The HIRE Act

B. Troubled Asset Relief Program (TARP)

C. Race to the Top Fund

D. American Recovery and Investment Act (the Stimulus Plan)

ANSWER D