WASHINGTON (CN) – The American Recovery and Reinvestment Act has increased the national GDP and has created millions of jobs by funneling public funds into transportation and other projects, Vice President Joe Biden said Wednesday at the White House.
“The economy has been growing at a rate of nearly 4 percent in the last three quarters,” Biden said. “We would be barely growing at all had [the Act] not been passed in the first place.”
According to a report released Wednesday by the President’s Council of Economic Advisers, the Recovery Act has saved or created between 2.5 million and 3.6 million jobs and has raised the GDP by between 2.7 and 3.2 percent since it was enacted in February 2009.
“We will reach the president’s goal of 3.5 million jobs created two quarters earlier than estimated,” said CEA Chair Dr. Christina Romer, who oversees the council’s quarterly report to Congress.
More than $100 billion of the $787 billion stimulus package has been leveraged by outside funds, creating more than $380 billion of total investment spending at a rate of $3 of outside investment for every dollar of public funds. Public spending alone accounts for 800,000 new jobs.
Romer said this quarter’s report was especially positive. “It’s not every CEA release that gets a vice presidential unveiling,” she said.
Romer said the latest report showed that “well-designed and well-engineered policy can not only put people back to work, but can reenergize private investment.”
“Barack and I are not fooling ourselves,” Biden said. “The only way back is through the free enterprise system in the private sector.”
Although private industry created 600,000 jobs in the first six months of 2010, the economy is still struggling from the loss of more than 6 million jobs in 2008 and 2009.
“I don’t know of any economists who thought we could lead world in the 21st century without building something beyond the economy that existed,” Biden said. “We need to create whole new industries.”
Biden cited a slate of clean energy companies that are benefitting from federal investment through the Act. Using clean energy manufacturing tax credits included in the Act, companies with 70 percent of the capital for a clean energy project can apply to the government to put up the remaining 30 percent.
The Act has awarded funds to 14,000 basic transportation infrastructure projects, such as roads and bridges, but is also supporting LED lighting, lithium ion battery, electric car manufacturing and smart-grid projects.
“This isn’t about big government spending,” Biden said. “It’s about getting the economy going through seed money. Once these companies see government jumping into clean energy, they are much more likely to jump in themselves.”