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Obama Visits Hard Hit Indiana With Grant Money

Published: Wednesday, 5 Aug 2009 | 1:54 PM ET

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By: AP

Barack Obama
CNBC.com
Barack Obama

Venturing back to a region reeling in deep unemployment, President Barack Obama's latest mission in Indiana is to show that the costly stimulus plan he lobbied for is producing tangible help — $2.4 billion in taxpayer grants to create electric cars and tens of thousands of jobs.

At a recreational-vehicle plant in northern Indiana, Obama on Wednesday will announce the grants as part of a bid to stabilize American confidence. His stop in Wakarusa, Ind., is part of a concerted economic campaign that also will see Vice President Joe Biden and three Cabinet secretaries holding events in four states.

As Congress breaks for the summer, the public message war is on. Obama wants to persuade Americans that his economic agenda is working but also remind them it will take time to produce the numbers that people really want: more jobs.

That matters immensely in the region where Obama is headed, a capital of RV manufacturing. The industry has been crushed by the recession.

Indiana's Elkhart-Goshen area had an unemployment rate of 16.8 percent in June. That's up 10 percentage points from last year. It's also higher than it was when Obama visited in February, although the jobless rate has at least come down from 17.5 percent in May.

This is the same region where Obama made his first bolt outside the Washington beltway as president, three weeks on the job. He was lobbying for the stimulus.

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The resulting $787 billion legislation included $2.4 billion to support a new generation of electric cars. The competition for the money is completed, giving Obama something concrete to offer in his return visit. The money will be split among nearly 50 projects in 25 states, with the biggest shares going to Indiana and Michigan to create job opportunities in the automotive sector.

Grant recipients include Johnson Controls [JCI Loading... () ], of Milwaukee, $299 million to build battery packs and cells for hybrid vehicles at a facility in Holland, Mich.; General Motors [MTLQQ Loading... () ], $241 million to produce battery packs and the develop electric drive vehicles in Michigan and Maryland, and Ford Motor [F Loading... () ], $92.7 million for electric drive components at plants in Michigan and Missouri.

Obama also will be selling his broader, stick-with-it message about building the foundation of a whole new economy. At stake is the kind of public support that could influence his success on related matters such as health care legislation, as Republican criticism mounts and public skepticism of the stimulus looms.

Obama's trip comes as signs of an economic recovery have started to emerge in key areas such as housing and manufacturing.

But jobs are the key to success — for individuals, for families, for politicians — and those haven't been returning yet.

Overall, unemployment in the United States hit 9.5 percent in June, the highest level in 26 years.

New monthly numbers come out Friday, and the White House has been trying for weeks to set expectations that joblessness will worsen before it gets better.

Obama previewed the next jobs report this way: "It's likely to show that we're still continuing to lose far too many jobs. As far as I'm concerned, we won't have a recovery until every American who wants a job can find one. But history does show that you need to have economic growth before you have job growth."

And on that front, there is some positive news.

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The economy shrank at a 1 percent rate in the April-to-June second quarter, new figures show — another contraction, but a sharp upgrade from the 6.4 percent slumps in the first quarter and a 5.4 percent decline in the fourth quarter of 2008.

The president says the progress is due in part to the stimulus effort. Republicans have taken whacks at the stimulus for weeks, contending that it was not worth the cost and has not produced results as the nation keeps shedding jobs each month.

The American public is still uneasy. A total of 79 percent of people describe the economy as "poor," according to an AP-GfK Poll.

And Obama's approval rating on the economy is now at 50 percent, the same poll found, down from 58 percent in April.

The last time Obama was in the Elkhart area, he said, "Recovery will likely be measured in years, not weeks or months."

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Still, the White House is sensitive to the fact that people measure progress in terms of their daily lives.

Obama's spokesman, Robert Gibbs, was asked whether Obama expects a warm reception in Indiana given the continued economic downslide in the region.

"Well, look, I hope that the people there and the people across the country believe that the president is working hard every day to get the economy back on track," Gibbs said last week. "But he understands their anger and frustration. He's angry and frustrated too."

Of the new grants, $1.5 billion will go to the production of batteries and their components; $500 million will go for other components needed for the cars, like electric motors; and $400 million will go toward plug-in hybrid cars, training for technicians and related costs.