RANCHO MIRAGE, Calif. – The costly $787 billion spending bill that President Barack Obama signed into law soon after taking office boosted the economy and helped avoid another Great Depression, the White House said in a status report on Monday’s fifth anniversary of the law’s enactment.
Republican leaders in Congress took note of the anniversary, too, but argued that the bill spent too much for too little in return.
White House economic adviser Jason Furman said the American Recovery and Reinvestment Act made other targeted investments that will pay dividends for years to come.
By itself, the stimulus bill saved or created an average of 1.6 million jobs a year for four years through the end of 2012, Furman said in a White House blog post.
Half of the total fiscal support for the economy, or about $689 billion, from the recovery act and subsequent measures was in the form of tax cuts directed mostly at families. The remainder was spent on such things as rebuilding roads and bridges, preventing teacher layoffs and providing temporary help for people who lost their jobs or needed other assistance because of the poor economy.
The report said recovery act spending will have a positive effect on long-run growth, boost the economy’s potential output and ultimately offset much of the law’s initial cost.
More than 40,000 miles of roads and more than 2,700 bridges have been upgraded, nearly 700 drinking water systems serving more than 48 million people have been brought into compliance with federal clean water standards and high-speed Internet was introduced to about 20,000 community institutions.
“While these figures are substantial, they still nevertheless understate the full magnitude of the administration’s response to the crisis,” Furman wrote.
He noted that the report focused solely on the effects of fiscal legislation. It did not evaluate other administration policies that aided the recovery, such as stabilizing the financial system, rescuing the auto industry and supporting the housing sector.
Republicans were in less of a mood to celebrate.
“The ‘stimulus’ has turned out to be a classic case of big promises and big spending with little results,” House Speaker John Boehner, R-Ohio, said in a written statement. “Five years and hundreds of billions of dollars later, millions of families are still asking ‘Where are the jobs?'”
Senate Minority Leader Mitch McConnell, R-Ky., argued that Obama could put the nation’s finances on a more solid footing and create jobs by taking steps to roll back regulations and finally approve the Keystone XL pipeline project from Canada to the Gulf of Mexico.
“Five years later, the stimulus is no success to celebrate,” said McConnell. “It is a tragedy to lament.”
Furman said the economy is “undoubtedly in a stronger position” because it has grown for 11 straight months, although not at a pace that would be considered robust. Businesses have also added 8.5 million jobs since early 2010. Obama initially sold the stimulus as an investment that would produce a dramatic decrease in unemployment that ultimately did not materialize.
Unemployment remains high, at 6.6 per cent in January, though it has fallen considerably since reaching double-digit highs early in Obama’s administration. Some of the decline, however, is due to people dropping out of the workforce. People aren’t considered unemployed if they aren’t looking for work.
“While far more work remains to ensure that the economy provides opportunity for every American, there can be no question that President Obama’s actions to date have laid the groundwork for stronger, more sustainable economic growth in the years ahead,” Furman said.
Obama planned to discuss the economy Tuesday at a suburban Washington distribution centre for the Safeway grocery store chain. On Wednesday, Vice-President Joe Biden will mark the recovery act’s fifth anniversary during a visit to America’s Central Port in Granite City, Ill.
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Recovery act report: http://1.usa.gov/1gWSc97