White House touts impact of stimulus package
The economic-stimulus legislation will help encourage $280 billion of investment by private industry and local governments, creating jobs,
By Seattle Times news services
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WASHINGTON — The economic-stimulus legislation will help encourage $280 billion of investment by private industry and local governments, creating jobs, according to an administration report released Wednesday.
The White House asserted that the $862 billion stimulus package has been even better for the country than previously advertised.
Updating the estimate of its impact, the White House now projects that the vast spending act has created or saved between 2.5 million and 3.6 million jobs.
"This isn't big government spending, this is about getting the economy growing through seed money," Vice President Joe Biden said as he issued the report at the White House.
The analysis, by the White House Council of Economic Advisers, estimates that about $100 billion in government grants, loan guarantees, interest subsidies and tax breaks will be matched almost three-to-one by other spending on clean-energy projects, economic development and building construction.
"The Recovery Act appears to be stimulating private investment and job creation at a time when the economy needs it most," Christina Romer, chairwoman of the Council of Economic Advisers, says in testimony prepared for a hearing of Congress's Joint Economic Committee later today.
According to the administration, about 72 percent of the program's funds have been spent or obligated. The effect of the program has raised the nation's gross domestic product by between 2.7 percent and 3.2 percent from "what it otherwise would have been," the report said.
In the latest CBS News poll, almost three-quarters of Americans said the stimulus had not improved the economy. A new poll by The Washington Post and ABC also found that more than half of respondents said the government should not provide additional stimulus.
"More debt only subtracts capital from the private markets that could be used for loans, to hire more people and create more jobs," Sen. Lamar Alexander of Tennessee, the chairman of the Senate Republican Conference, said in an interview.
He said the administration's proposals on health care, regulation, energy and trade had discouraged private-sector growth.
To shore up support for the stimulus program, the White House has been promoting what Biden has called the "summer of recovery."
The new estimate says the act is on track, if it hasn't already reached, the promise that it would save or create 3.5 million jobs by the end of 2010.
A growing body of independent economic analysis suggests the stimulus package has boosted jobs and kept people off the unemployment line. Yet exactly how many jobs is a matter of dispute, particularly at a time when the national jobless rate continues to hover perilously close to 10 percent.
Much of the stimulus money went to programs such as as tax breaks, Medicaid and unemployment insurance that don't lend themselves to easy head counts.
The report used historical data and statistical modeling to arrive at the estimate of jobs saved or created, but Romeracknowledged that there was some uncertainty over the job estimates, which rely on reporting from recipients of federal aid.
"I suspect the true effects of the act will not be fully analyzed or fully appreciated for many years," she said, adding that most experts agreed that the stimulus had had a "significant, beneficial impact on employment and output over the past year."
Biden acknowledged public frustration over the economy but noted that the crisis predated the administration. "Before we walked in the West Wing, we were handed a deficit, a bill for that year, for over $1 trillion," he said.
Real GDP started growing in the second half of last year, and private sector payrolls have increased by nearly 600,000 since their low point in December. But that has been barely enough to keep pace with the normal rate of growth of the work force.
President Obama has traveled the country telling voters that as bad as things are, they'd be worse without the stimulus. He acknowledges that message is a tough sell. Obama travels Thursday to Michigan to promote batteries for electric cars, one element of his agenda to create jobs.
Compiled from Bloomberg News, The Associated Press and
The New York Times
