Vice President Joseph Biden and House Republican Leader John Boehner both put their partisan spin on the effects of the administration’s economic stimulus spending. But Biden exaggerated, and Boehner got it wrong, according to a report issued later in the day by the nonpartisan Congressional Budget Office.
Upbeat Biden; Downbeat Boehner
Biden gave a relentlessly upbeat speech in Washington, D.C., declaring that the administration’s "investment" was planting "seeds" of future economic prosperity; "we launch entire industries, create hundreds of thousands jobs, and spark new forms of commerce that were once unimaginable, allowing us to dominate the 21st century like we did in the 20th," he said in his prepared remarks. He claimed that "we’ve created 3 million jobs, and we’re adding jobs every month."
Earlier, Boehner delivered a gloomy economic address in Ohio, arguing that the stimulus not only didn’t help the economy, but hurt it. "Right now, America’s employers are afraid to invest in an economy stalled by ‘stimulus’ spending and hamstrung by uncertainty," he declared.
"All this ‘stimulus’ spending has gotten us nowhere," Boehner said. "This is a lose-lose proposition, plain and simple."
The CBO Lowdown
The truth, according to a report issued by the nonpartisan Congressional Budget Office later in the day, is that the stimulus spending has had a positive effect on the economy, though probably not as large as Biden claimed.
It said of the stimulus bill, formally known as the American Recovery and Reinvestment Act (ARRA):
CBO, Aug. 24: CBO estimates that ARRA’s policies had the following effects in the second quarter of calendar year 2010:
They raised real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent,
Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points,(and)
Increased the number of people employed by between 1.4 million and 3.3 million.
As with its earlier reports, the wide range of CBO’s estimates reflects the inherent uncertainty of comparing current economic conditions to what might have happened had there been no government intervention. Biden’s claim of 3 million jobs "created" might be right, but it could almost as easily be half that number according to CBO’s assessment.
But either way, CBO’s report contradicts Boehner’s claim that the stimulus spending has hurt the economy.
Nevertheless, the total number of jobs in July was still 3.3 million below the total when Obama took office, and 7.7 million below the total in December 2007, the best month during the Bush administration. And for the record, CBO now estimates that the stimulus spending will total $814 billion by 2019, somewhat more than the price tag of $787 billion that was estimated at the time of passage.
-Brooks Jackson and Eugene Kiely