The economy took a dive in late 2007, and the administrations of Presidents George W. Bush and Barack Obama have struggled to reverse the loss of jobs. Since Obama took office in 2009, various government programs and bailouts have been instituted to stimulate the economy, including Cash for Clunkers and a tax credit for home buyers. In February 2009, Congress passed the American Recovery and Reinvestment Act, a stimulus package infusing $787 billion into the economy. But unemployment still soared. The average unemployment rate for 2008 was 5.8 percent. In 2009 the average annual rate shot up to 9.3, topping out at 10.1 percent in October. In 2010, the unemployment rate has hovered around 9.7 percent, dropping to 9.5 percent in June and July. Obama and others have touted the stimulus as preventing a depression. Republicans, however, characterize it as wasteful, inefficient, and ineffective government spending at a time when the national debt continues to soar.
Democrats have continued to introduce smaller stimulus packages and unemployment benefits extensions, with limited success. Crossover votes from moderate Republican Sens. Susan Collins and Olympia Snowe have allowed some legislation to pass. In August 2010, the two were the only Republicans to vote with Democrats on a bill to give $10 billion to prevent layoffs of teachers, firefighters, police officers, and others. In 2011, Bush-era tax cuts are set to expire, sparking a debate over whether they should be extended. Republicans want to keep all the tax cuts in place, but Democrats prefer to let the cuts for people in the top tax brackets expire. Republicans argue that these taxes also catch many small businesses, which create jobs.
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