White House touts stimulus data while pushing new plan to create jobs

The White House said Wednesday that the stimulus is doing its job to
improve the economy but that “targeted ideas” are still needed to
create jobs.

In a briefing with reporters on the stimulus as lawmakers look to craft new jobs legislation, Obama administration officials touted the latest economic data to show that the $787 billion recovery act has helped. Since the stimulus was signed into law in February, monthly job losses have dropped from about 700,000 to 11,000 last month. Estimates by the Congressional Budget Office and independent economists at Moody’s and IHS/Global Insight found the stimulus to save or create roughly 1 million jobs during the first three quarters of 2009. The economy, which was contracting at 6.4 percent annualized rate in the first quarter, grew at a 2.8 percent rate in the third quarter.

{mosads}”I simply don’t believe there’s a credible case to be made against the fact that this recovery act is working,” said Jared Bernstein, the chief economist for Vice President Joe Biden.

Administration officials noted that slightly more than half of the stimulus, $394.5 billion, has been spent or obligated, and that the $392 billion in remaining funds will mostly go toward projects that create more jobs than tax cuts and payments, which made up much of the early stimulus money doled out.

Despite proclaiming the stimulus’s success, Bernstein and White House Press Secretary Robert Gibbs defended President Barack Obama’s push for more measures to spur job creation.

The jobless rate was 10 percent in November, slightly lower than October’s jobs number but far higher than the 8.1 percent rate in February. With economists predicting the rate to remain near 10 percent into an election year, the president and Democrats in Congress have called for new jobs measures, including more infrastructure spending, state fiscal aid, small business loans, new green investments and other incentives for businesses to hire.

“Stabilizing the unemployment rate at 10 percent is not turning the corner,” Bernstein said.

On Wednesday evening, House Democrats, in the last vote before the holiday recess, passed $75 billion in new infrastructure funding and state and local government fiscal aid. House Republicans voted en masse against the package, deeming it “son of stimulus.” GOP lawmakers have blasted the recovery act for adding to the $12.1 trillion debt and for failing to keep the jobless rate from rising into double digits.

Gibbs dismissed suggestions that the new jobs package was a “second stimulus,” instead referring to them as “targeted ideas.”

But he also noted that a larger recovery act wasn’t possible earlier this year.

“We got what we could get,” he said. “$787 billion was the political load we think could be carried.”

Administration officials knew that the stimulus was never going to be enough to fill the economy’s output gap between potential and actual GDP that peaked at $2 trillion during the deepest part of the recession.

“Has anybody ever contended that the recovery act would fill that pothole?” Gibbs said.