Monday is Presidents Day, but to President Obama, it’s a red-letter day of another sort: the fifth anniversary of his signing of the American Recovery and Reinvestment Act, a.k.a. the stimulus.
In its final report on the impacts of the stimulus, the White House’s Council of Economic Advisers (CEA) is touting some numbers. On its own, the stimulus saved 6 million jobs, and when combined with additional fiscal measures that followed, 9 million jobs were saved through the end of 2012, the CEA reports.
“The investments made through the Recovery Act will have a positive impact on long-run growth, raising the economy’s potential output and ultimately offsetting much of the Act’s initial cost,” CEA chairman Jason Furman said in a blog post Monday.
The stimulus was initially priced at $787 billion, but later revised upward to $830 billion. According to the CEA report, the Recovery Act alone raised the level of gross domestic product by between 2 and 3 percent from late 2009 through mid-2011.
Addition fiscal measures signed by the president that also contributed to the recovery, the CEA says, include a temporary payroll tax cut, extensions of emergency unemployment compensation, and expanded business tax incentives.
According to the CEA, when the stimulus and subsequent fiscal measures are combined, half of the total fiscal support for the economy, or $689 billion, came in the form of tax cuts, mostly directed at families. The remainder went to rebuilding roads and bridges, funding teacher jobs, and emergency unemployment assistance.
Mr. Obama signed the Recovery Act less than a month after taking office, amid the nation’s worst economic crisis since the Great Depression. Four million private-sector jobs had been lost, as had trillions of dollars in household wealth. No House Republicans voted for the Recovery Act, and in the Senate, only three Republicans voted yes. The stimulus – as well as the bailouts of Wall Street, housing, and the auto industry – is seen as a driving force behind the launch of the tea party movement.
Republicans call the stimulus a waste of taxpayer dollars.
“If you recall five years ago, the notion was that if the government spent all this money – that, by the way, was borrowed – that somehow the economy would begin to grow and create jobs. Well, of course, it clearly failed,” Sen. Marco Rubio (R) of Florida said Monday in a video statement.
Obama often notes that the economy is still not where it needs to be, with January unemployment at 6.6 percent and job creation still weak. But his administration argues that the strides made would not have been possible without the Recovery Act.
“While far more work remains to ensure that the economy provides opportunity for every American, there can be no question that President Obama’s actions to date have laid the groundwork for stronger, more sustainable economic growth in the years ahead,” Mr. Furman writes, adding that the economy has grown for 11 straight quarters and businesses have added 8.5 million jobs since early 2010.
On Tuesday, Obama will travel to Upper Marlboro, Md., for remarks on the economy at a Safeway distribution center.
On Wednesday, Vice President Biden will mark the fifth anniversary of the stimulus by traveling to America’s Central Port in Granite City, Ill., where he will call for continued investment in infrastructure.