TRAVERSE CITY, Mich. (AP) -- President Barack Obama's economic recovery plan will be good for Michigan even as it pushes the federal government further into debt, Gov. Jennifer Granholm said Wednesday.
Granholm, a Democrat and close ally of the president, defended his program during a town hall meeting in Traverse City as anti-tax protesters waved placards outside. The governor is making a series of stops around the state to discuss what the initiative will mean for Michigan, where the recession is hitting especially hard because of the auto industry's woes.
About $18 billion in federal money would flow to Michigan if the Obama plan were enacted, including $11 billion in tax cuts and the rest in spending on education, transportation infrastructure, law enforcement and other areas. It would create an estimated 109,000 jobs over the next two years, Granholm said.
"It's really important for citizens to see it, touch it, feel it and realize it's going to help Michigan," she said, adding that Northern Michigan will be helped especially by funding for road projects. "Any time you see that recovery act logo, you'll know that taxpayer dollars through the recovery act are putting people to work."
During the meeting, several local residents described how they had been helped by programs that would be expanded under the stimulus package, such as the Earned Income Tax Credit, food assistance, disability payments and retraining for jobless workers.
Granholm acknowledged the program would not be enough to repair Michigan's battered economy, saying it was important to continue efforts to wean the state away from excessive reliance on auto manufacturing by promoting new industries such as alternative energy.
That's why selected industries with strong growth potential, such as filmmaking, are getting tax breaks when others are not, she said in response to a questioner who argued that all business taxes should be lowered. She told another audience member that state government had made deep spending cuts and was constantly looking for ways to operate more efficiently.
In a brief interview, Granholm described red ink as a short-term price the nation would have to pay to escape the downturn. Federal budget deficits will shrink as the economy picks up, she said.
"You have to be able to treat the most significant problems first and the most significant problem is an economy in recession," she said. "And the way you deal with that problem is to get money into the economy, and that means spending."