Obama’s budget czar pleads for patience on economic recovery
The political problem the White House faces is simple. The unemployment rate has been rising despite the big price tag for the American Recovery and Reinvestment Act. That lets Republicans argue the program was a mistake.
Speaking to the Council on Foreign Relations, Orszag said a program that would boost economic activity over several years was the right choice.
A multi-year approach
“The economic situation we inherited was so severe that we needed to assure producers and consumers that aggregate demand would be boosted not just for a few months, but for a sustained period. That is why we envisioned a Recovery Act that would ramp up rapidly in 2009, have its peak impact in 2010, and lay the groundwork for further growth thereafter,” he said.
Orszag, Director of the Office of Management and Budget, said that from a policy maker’s point of view, “implementation of the Recovery Act is on schedule.”
A less than rosy outlook
But he was forced to acknowledge that more bad news lies ahead. “The bottom line is that we expect the unemployment rate to remain stubbornly high over the next few quarters even if economic activity itself picks up steam. So, we will have to be patient. We will have to be vigilant in looking for opportunities to help,” Orszag said.
Of course, patience in the halls of Congress gets tougher to find as the next election draws closer and constituents are hurting.
In short, Orszag said, “the road ahead of us is long.”