Report: Obama’s Stimulus Is Working
By Leigh Ann Caldwell, NEWS JUNKIE POST Contributor
A new government report reveals that the stimulus is working, just not as quickly as the administration anticipated. Funds are being released slower than expected and job creation has been minimal.
Four months after its passage through Congress, $158 billion has been “obligated” but only $57 billion, less than 10 percent, of the $787 billion stimulus package has been spent, according to the Office of Management and Budget.
A report released Wednesday by Congress’ investigative arm, the Government Accountability Office (GAO), says the bulk of the money will be released in 2010, later than expected due to bureaucratic delays.
Governor Deval Patrick (D-MA) told the House Oversight and Government Reform Committee that Massachusetts needs to see the money.
“No funds [means] no projects, and no projects [means] no jobs,” Patrick said. “Spending the money creates the jobs.”
Despite the criticism of the slow release of funds by the federal government, Patrick said the stimulus has helped Massachusetts meet its budget obligations for Medicaid, education, and health care. For example, he said the money has allowed the state to “continue our pioneering experiment in [universal] health care reform.”
The GAO report also shows that the stimulus has helped states endure their budget crisis by maintaining staff and resources and limiting tax increases. Sixty-three percent of state- devoted funds have gone to meet Medicaid requirements. Another 27% has helped to stabilize state budgets and fund infrastructure projects.
Gene Dodaro, Comptroller General for the GAO, said that “the recovery act is helping the states deal with their fiscal stresses.”
The $787 billion was meant to immediately create or retain hundreds of thousands of jobs, with the potential of creating 3 to 4 million jobs. But job creation goals have not been met. The Office of Management and Budget’s latest number estimate that 150,000 jobs have been saved or created.
U.S. Representative Jason Chaffetz (R-UT) points to last months increase in unemployment to 9.5 percent. Americans lost and an additional 467,000 jobs. “I still do not understand how you can justify that it is slowing the windfall,” Caffetz said.
Robert Nabors, Deputy Director of the Office of Management and Budget, said he is “not happy” with June’s unemployment numbers but noted that the first quarter of 2009 saw 670,000 people lose jobs per month.
Nabors also said the severity of the recession was unpredictable. “The economy was going to be bad, I don’t think anybody predicted it was going to be as bad as it was,” Nabors said.
Pennsylvania Governor Ed Rendell offered his own predictions. He says job creation will pick up in his state very soon – by summer’s end. “You will see unbelievable amounts of people coming back to work on the infrastructure portions of this and orders going into factories over the country,” Rendell said.
Despite discussion on Capitol Hill about a second stimulus, OMB’s Robert Nabors said that “no one in the administration is discussing a second stimulus right now.”