Some Leaders Wonder if Stimulus Will Work

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WASHINGTON -- The recession is hitting home.

A new report shows Americans' net worth has plunged since the economic downturn began.

Click the player to watch the report from CBN News Washington Correspondent Jennifer Wishon followed by comments from Gordon Robertson.

President Barack Obama says the economy is causing a lot of families "incredible pain and hardship," but the government is providing them help.

Obama spoke to reporters in the Oval Office Friday after getting an update from his economic advisor Paul Volcker.

The President said his administration is working on both short-term help and long-term economic recovery plans.  He maintains the capacity of American workers and industry is undiminished.

Obama said the goal is a new "post-bubble" economic model.  He says the days of relying on an inflated housing market and maxed-out credit cards are over.

The President continues to sell optimisim, but some remain skeptical his stimulus plan is working.

Americans' Net Worth Down

For Americans who needed a statistic to realize their bank accounts are shrinking here's the proof.  A report from the Federal Reserve reveals Americans' net worth plunged nearly 18 percent last year.

The decline is the sharpest since the Fed started keeping track of net worth in the 1940's and not everyone believes Washington has a handle on the problem.

"The American people are concluding that Washington D.C., doesn't understand, in a very real sense, what they're dealing with," said Rep. Mike Pence R-IN.

How Long Will The Recession Last?

With household net worth down, that could mean less consumer spending and smaller corporate earnings.  But for now, the stock market is rallying, after some slightly better news from businesses this week.

Even so, some wonder how long it will last.

"If you do have a plan, you haven't persuaded us yet and until you persuade us, U.S. confidence won't come back," said Sen. Lamar Alexander R-TN.

Obama: Stimulus Plan Will Work

Over the long term though, President Barack Obama says the $787 billion stimulus package passed earlier this year will work -- cautioning lawmakers and business leaders not to live by daily climbs and dips in the market.

Today the President will learn just how optimistic he can be. He is meeting with Paul Volcker, the man leading his economic advisory board, who will offer the President a progress report on the stimulus.

"I did not come here to pass our problems on to the next president or the next generation," Obama said. "I'm here to solve them."

Both GOP and Democrats Asking When?

But Republicans aren't buying it.

In a meeting with Treasury Secretary Timothy Geithner, some Democrats revealed they are also getting antsy - wondering when their constituents will feel relief.

"I'm meeting with small business people in my state frequently," said Sen. Benjamin Cardin D-MD. "The credit is just as tough as it was four months ago."

"I agree with that," Geithner replied.

"Wait And See"

Despite rumblings on Capitol Hill of a second stimulus bill, House Speaker Nancy Pelosi is taking a wait and see approach.

"I don't think you ever close the door to being prepared for what eventuality may come, but I think that is its not a near, near thing," she said.

It's important, Pelosi says, to let the first stimulus play out. A second one so soon she says would only further erode American confidence.

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CBN News
Jennifer Wishon

Jennifer Wishon

CBN News Washington Correspondent

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