WASHINGTON (CN) – Recovery Act funds have been spent faster than even “ambitious” Congressional Budget Office projections with roughly $275 billion of the $787 billion out the door, Vice President Joe Biden said in a report Tuesday on the eve of the act’s anniversary. With figures and graphs, he argued that the money has already created millions of jobs and spurred economic growth.
Biden, who is scheduled to hand in his first annual report on the Recovery Act to the president Wednesday, said the stimulus funds “clearly halted an economic freefall.”
He 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, an increased 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 felt during the last quarter of 2008.
The Congressional Budget Office estimated that the act — signed a year ago — saved 2.4 million jobs, which is more optimistic than that of the White House economic advisors, who claim the act saved between 1.5 and 2 million jobs.
January saw unemployment drop to 9.7 percent, after hovering at 10 percent for three months.
“It is no accident that we have seen the labor market improve dramatically since the passage of ARRA,” Biden wrote in his report, in reference to the American Recovery and Reinvestment Act of 2009.
And Biden pointed to a trending decrease in job losses ever since a peak in March of last year.
But Biden also noted that such improvements happened with only about $275 billion of the $787 billion Recovery Act out the door. Much more is yet to come, and he predicts that $551 billion will be spent by next September.
While the low proportion of spent funds may be a surprise, the numbers designated 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.
With most projects started in 2009 under the Recovery Act still less than half complete, and with the continued spending through 2010, more projects will simultaneously be underway. This includes high-speed rail projects, broadband extension, and health information technology, which are set to begin this year.