Obama Says Economic Stimulus Plan Worked as Intended
By Edwin Chen
July 11 (Bloomberg) -- President Barack Obama said his $787 billion stimulus bill “has worked as intended” as he pushed back against Republican criticism that his recovery program has failed to rescue the economy.
“It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession,” Obama, who is traveling today in Ghana, said in his weekly Saturday radio and Web address. “It has delivered $43 billion in tax relief to American working families and business.”
Obama spoke after stocks fell for a fourth week on concern that an economic recovery will be delayed. A government report last week showed that employers cut 467,000 jobs in June and the unemployment rate rose to 9.5 percent, the highest since 1983.
The weakening labor market is taking a toll on Obama’s popularity. A survey by Hamden, Connecticut-based Quinnipiac University released July 7 showed 49 percent of Ohio voters approved of Obama’s job performance, down from 62 percent in a May 6 poll. The disapproval figure for Obama was 44 percent, up from 31 percent in May.
Obama, in his speech, said the stimulus program is helping state governments save jobs. Were it not for the program, the president said, “state deficits would be nearly twice as large as they are now, resulting in tens of thousands of additional layoffs -- layoffs that would affect police officers, teachers, and firefighters.”
Republican Response
In the weekly Republican response, House Minority Whip Eric Cantor of Virginia said the stimulus bill was “full of pork- barrel spending, government waste and massive borrowing cleverly called ‘stimulus.’”
“The plain truth is that President Obama’s economic decisions have not produced jobs, have not produced prosperity, and have not worked,” Cantor said.
He said the Republicans want reductions in tax rates that he said would help middle-class families.
In asking for public patience, Obama said the recovery act “wasn’t designed to restore the economy to full health on its own, but to provide the boost necessary to stop the free fall.”
Enacted in February, the bill “was designed to spur demand and get people spending again and cushion those who had borne the brunt of the crisis,” the president said.
Obama said the measure “was not designed to work in four months -- it was designed to work over two years.”
The spending plan will “accelerate greatly” through the summer and autumn, creating “thousands more infrastructure projects” that will lead to additional jobs, he said.
‘Right Direction’
“We’re moving in the right direction,” Obama said. “We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.”
The Standard & Poor’s 500 dropped 1.9 percent this week to 879.13, the lowest level since May 1. The measure has now retreated 7.1 percent since June 12. The Dow Jones Industrial Average fell 134.22 points, or 1.6 percent, to 8,146.52.
Sears Holdings Corp., the largest U.S. department-store chain based in Hoffman Estates, Illinois, lost 8.2 percent after an index of consumer confidence dropped more than forecast. Exxon Mobil Corp., the world’s biggest oil company based in Irving, Texas, slid 4.9 percent as crude tumbled on concern the recession will keep sapping demand.
In a Bloomberg interview last month, the president said he expected unemployment rates to exceed 10 percent.
In his radio address, Obama also renewed his commitment to comprehensive health-care legislation that expands insurance coverage while cutting costs. He also vowed to address long-term entitlement overhaul.
Earlier this week, Vice President Joe Biden also defended the Obama administration’s efforts to rebuild America’s economy, while expressing frustration with those who say progress is too slow.
“Remember, we’re only 140 days into this deal,” Biden said in a speech in Cincinnati. “It’s supposed to take 18 months.”
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