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Obama to hurry recovery effort amid rising doubt
Question of the Day
President Obama on Monday pushed to reinvigorate his $787 billion economic-stimulus program, promising to accelerate efforts to get money out the door, while dealing with critics who said some of his claims to create or preserve jobs have been exaggerated.
Mr. Obama said he was “not satisfied” with the results of the stimulus program so far, though he highlighted some of the achievements he said were the result of the massive spending bill, which he signed into law in mid-February.
He said it was “good news” that $135 billion obligated so far has saved or created “at least 150,000 jobs.”
But with about 2 million jobs disappearing since the bill was enacted, White House officials conceded that their estimates of jobs “saved or created” were at best only blunting the pace of overall losses.
“Less bad is not good enough,” said White House press secretary Robert Gibbs.
A national poll released Monday showed that the public was losing confidence in Mr. Obama’s handling of the economy. But the White House denied that Mr. Obama’s effort to speed up the stimulus spending was a response to either growing anxiety about the program or its lackluster early performance.
Approval of Mr. Obama’s handling of the economy has dropped from 59 percent in February to 55 percent, the USA Today-Gallup poll showed. More significantly, disapproval on the issue has gone up 12 percentage points to 42 percent.
The president, however, remains more popular than either of his two immediate predecessors at this point in his presidency, with a 67 percent overall approval rating.
Still, critics accused the White House with playing with numbers to make the stimulus appear more effective than it’s been.
“The Obama administration is continuing to fabricate job-creation projections related to the stimulus,” said Tony Fratto, a former George W. Bush administration official.
“The Bureau of Labor Statistics - the only government agency counting jobs - cannot tell you how many Americans are working today. They cannot tell you how many Americans were working a month ago. And they cannot even tell you how many Americans, within 50,000, were at work when the stimulus was passed by Congress,” Mr. Fratto said. “Without that information, there is no credible estimate for jobs ‘created or saved.’ ”
Keith Hall, commissioner of the Bureau of Labor Statistics, told Congress last week that it is “a very difficult thing for anybody to substantiate” the Obama administration’s projections of jobs “saved or created.”
Jared Bernstein, an adviser to Vice President Joseph R. Biden Jr., called the Obama’s team measurement “an estimate of how many jobs you believe you created.”
The president’s event at the White House on Monday, as he pivoted back to domestic policy after a trip to the Middle East and Europe, was intended to highlight “10 new major projects that will define the next three months,” the White House said.
The projects include work at 107 national parks, 98 airports and 1,500 highway locations, and hiring or retaining 5,000 police officers - work designed to save or create 600,000 jobs. Mr. Obama said that all those jobs will be created or retained “over the next 100 days.”
The White House said that 125,000 summer jobs for youth will be created in the next 100 days, though they said the positions will not be counted as full-time positions.
Mr. Obama pledged in February that, all told, the stimulus package would save between 3 million and 4 million jobs.
Mr. Bernstein defended the administration’s formula for its job numbers.
“This is an absolute, tried-and-true economic methodology,” he said during a briefing with reporters at the White House. “There is simply no other way to make this kind of estimate.”
But Republicans and conservative groups hammered the president, sensing a political opening.
“Today’s announcement is an acknowledgment that the Democrats’ trillion-dollar stimulus is not working, and the American people know it,” said House Minority Leader John A. Boehner, Ohio Republican.
The White House said its calculations project that every $92,000 of government spending creates one “job-year.”
A May 11 report states that about two-thirds of that “job-year” is a direct or indirect benefit, such as a state worker being retained and not fired because of federal dollars being disbursed to state governments.
About one-third of each “job-year” is an “induced effect,” the White House said, where tax cuts for consumers can create demand for products and allow businesses to hire or retain employees because of that demand.
Republicans pointed to the White House prediction in January that the unemployment rate would stay about 8 percent if Congress passed the stimulus package. The unemployment rate has risen to 9.4 percent.
Mr. Bernstein said that in January they had not yet learned of a massive 6 percent contraction in gross domestic product during the fourth quarter of 2008.
“At the time, our forecast seemed reasonable. Now, looking back, it was clearly too optimistic,” he said.
The White House also faces questions over whether the massive spending program is still needed to stimulate an economy that administration analysts say is already beginning to show signs of recovery. Other analysts, however, warn that the stock market’s recent gains may be a “bear rally,” signaling another downturn ahead.
Some Republican lawmakers say they want to stop all $787 billion from being spent if the economy is on the mend, using the money instead to reduce federal debt and deficit levels.
The national debt is more than $11 trillion, and the deficit for the current fiscal year is projected by the Congressional Budget Office to be almost $1 trillion. The country’s debtors are increasingly anxious about the ability of the U.S. government to pay its debt with interest, and bond buyers have been driving up yields on long-term notes, making it more expensive for the Treasury to raise money.
Meeting with his Cabinet, the president on Monday gave a mixed review of the economy so far, stating that May job losses of 345,000 announced Friday were not as bad as expected but “still far too many.” He also said that the United States is “still in the middle of a very deep recession, which is going to take a considerable amount of time to pull out of.”
It was a different message from the one Mr. Obama offered at the end of May, when he cited the stock market’s stabilization and other indicators as evidence that the economy had “stepped back from the brink.”
Mr. Obama hit back at his critics Monday.
“There’s some who, despite all evidence to the contrary, still don’t believe in the necessity and promise of this recovery act,” he said. “Tell that to the Americans who received that unexpected call saying to come back to work.”
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