WASHINGTON (CN) – President Obama applauded the Recovery Act as a success on its anniversary Wednesday, crediting it for why “a second depression is no longer a possibility.” “There has never been a program of this scale moved at this speed,” he said.
Obama’s address comes a day after Vice President Joe Biden released his first annual report on the Recovery Act. In it, he said funds have been spent faster than even “ambitious” Congressional Budget Office projections, with roughly $275 billion of the $787 billion out the door.
Despite the administration’s claim to speed, Research Director for the Committee on Economic Development Joe Minarik said in a telephone interview that “the economy would have been stronger if the bill had moved faster.”
“We needed a stimulus bill,” Minarik agreed, but said the bill could have spent faster by relying more on existing programs like Medicaid, food stamps and tax cuts, and less on new programs, like investments in the development of advanced batteries.
Obama said all the spent money can be seen online at recovery.gov, adding that Congress was successful in awarding projects on merit and keeping pork out.
“This program is run cleanly, smoothly, transparently,” he said.
The president took aim at Republicans, who opposed the bill publicly, “even when some show up at ribbon-cutting ceremonies for projects in their districts,” he said.
He suggested that Republicans are taking advantage of the phenomenon uncovered by a CNN poll released at the end of January showing that most Americans overwhelmingly support projects in the stimulus bill, but not the bill itself.
In his report, Biden pointed to a White House Council of Economic Advisers estimation that the package added between 2 and 3 percentage points of economic growth during the second quarter of 2009, increased growth by 3 or 4 percentage points during the third quarter, and contributed 1.5 to 3 percentage points to the 5.7 percent growth during the fourth quarter.
This fourth-quarter growth represents a near 12-point turnaround from the 6 percent contraction the economy experienced during the last quarter of 2008.
The Congressional Budget Office estimated that the Recovery Act, signed a year ago, saved or created 2.4 million jobs, which is more optimistic than that of the White House economic advisers, who claim Act saved between 1.5 and 2 million jobs. Obama said the Act is expected to generate 1.5 million new jobs in 2010.
January saw unemployment drop to 9.7 percent, after hovering at 10 percent for three months.
“The impact of a piece of legislation like this on jobs is unknowable,” Minarik from the think tank said, before adding, “We’re comparing it to somebody’s vision of a world without a stimulus bill.”
In reference to the American Recovery and Reinvestment Act of 2009, Biden wrote in his report, “It is no accident that we have seen the labor market improve dramatically since the passage of ARRA.”
He also pointed to a trending decrease in job losses since a peak in March of last year.
But he noted that such improvements happened with only about $275 billion of the $787 billion Recovery Act spent. More is yet to come, he said, predicting that $551 billion will be spent by next September.
Though the low proportion of spent funds may be surprising, the numbers exceed what Biden called the budget office’s “ambitious projection,” which estimated that only $185 billion would be spent as of September, less than the $195 billion that had been spent at the time.
The Act is not designed to spur job growth and stabilize the economy in just the short-term, but also to build infrastructure, such as high-speed rail networks, broadband and clean energy, that’s important for future economic prosperity, Obama said.
Asian nations were producing 98 percent of the world’s advanced batteries before the Act was signed — the kind used in high-mileage, low-emission cars — but Obama said stimulus funding will give the United States the capacity to manufacture 20 percent of the world’s advanced batteries next year, and 40 percent by 2010 — “an entire new industry because of the Recovery Act,” he said.
Obama also pointed to stimulus-funded projects in 31 states to develop high-speed rail, but noted that
“We’re playing catch up,” he said. “We shouldn’t be.”