White House says policies have helped economy

McClatchy NewspapersJuly 14, 2010 

WASHINGTON — Looking to boost his standing in a tough congressional election year, President Barack Obama heads to Michigan Thursday armed with a fresh report that he hopes will help convince people that his economic policies are making life better.

Obama will point to the new report from his own Council of Economic Advisers stating that the $862 billion package of spending and tax cuts enacted last year has added between 2.7 percent and 3.2 percent to the economy and saved or created about 3 million jobs.

More specifically, he'll visit a battery plant in Holland, Mich., to showcase his argument that $94.8 billion in stimulus spending on clean energy will save or create 827,000 jobs by 2012.

Republicans dismissed the report as political posturing based on false assumptions. "The stimulus has failed," said Rep. Tom Price, R-Ga.

However, independent economist Mark Zandi said the White House estimate is in line with his own and those from other private sector economists.

"They're reasonable estimates," said Zandi, the chief economist for the consulting firm Moody's Analytics. His analysis estimates that the economy is about 3 percent larger and that there are about 2.6 million more jobs now than there would have been without the stimulus.

The argument is critical for Obama and his Democratic Party heading into this November's elections for control of Congress. With unemployment stuck at 9.5 percent — 13.2 percent in Michigan — many voters are skeptical of Obama's policies and wary about the debt piling up to pay for them.

Obama worked Wednesday to set the stage for his trip to Michigan, seeking advice about how to create more jobs in high-profile meetings at the White House with billionaire investor Warren Buffett, then with former President Bill Clinton and a group of business executives.

The White House announced Obama's meeting with Clinton and the executives hours before it was to begin, billing it as a discussion of new ways to create clean-energy jobs.

The U.S. Chamber of Commerce jumped into the debate as well, with a public letter to Obama acknowledging that earlier, unnamed policies did stabilize the economy and prevent a depression, but warning that new tax increases and massive deficits "are needlessly prolonging the economic agony of the recession for millions of Americans and their families."

The business group urged Obama to extend Bush-era tax cuts for households with incomes above $250,000 at least temporarily. Obama proposes to let them expire as scheduled on Dec. 31, saying he'd use the extra $379 billion over 10 years to reduce the federal deficit.

The Chamber also worried that the deficit will sap economic growth, but urged Obama instead to cut entitlement spending and increase revenues by allowing more oil and gas drilling and timber harvesting on public lands.

White House aides attacked the Chamber letter as a political move from a group gearing up to help Republicans win back control of Congress this fall. The Chamber has set a goal of raising $75 million to spend on this fall's elections, and historically most of its efforts go to support Republicans.

Ultimately, Obama's defenders look to the jobs report to shore up the president's standing as he goes on the road trying to convince Americans that while still painful, the recession could have been much worse without his help.

As of July 1, about $480 billion of the stimulus package money has been distributed — $257 billion in spending and $223 billion in tax cuts, the report said. Another $147 billion already has been committed to specific projects.

The biggest single recipient of stimulus cash is clean energy, which will get a total of $94.8 billion in spending and tax credits.

The report said that's expected to create a total of 827,000 jobs by the end of 2012, at a per-job cost of $114,631.

They won't all be jobs making energy efficient windows or new car batteries or doing research in a lab or university. Some will be temporary, including work building factories or retrofitting homes and businesses to make them energy efficient.

So far, the report said, the stimulus spending and tax credits have created or saved 190,700 clean energy jobs, still far short of the 827,000 the government predicts.

Christina Romer, the chairwoman of the Council of Economic Advisers, acknowledged in a call with reporters that voters don't give the government credit for jobs saved.

She said they like individual parts of the huge program, such as building a bridge or retrofitting a school. They balk at the overall program, however.

"What people are noticing in their lives is that things are still tough," Romer said. "I am confident that when studies are written years from now . . . it will be viewed as a success."

Voters go to the polls on Nov. 2.

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For more McClatchy politics coverage visit Planet Washington

McClatchy Newspapers 2010

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