Stung by jobs data, White House defends stimulus

Slides
Photos

(Agencies)
Updated: 2009-07-17 08:44

WASHINGTON: Amid worsening jobs figures and continuing criticism about the speed of its economic recovery plan, the White House on Thursday defended President Barack Obama's efforts to lift the United States out of recession.

Some five months after Democrats pushed the president's $787 billion economic stimulus package through the US Congress, the package - which spans two years - has had limited impact on rising unemployment figures.

On Wednesday, the Federal Reserve forecast that the unemployment rate would stay above 9.5 percent in 2010.

White House officials stressed on Thursday that the stimulus package, which Republicans criticized for being too expensive, was not meant to solve the nation's economic ills in a matter of months.

"The act is intended to cushion some of the blow, not to fully offset the deepest recession since the Great Depression," said Jared Bernstein, chief economic adviser to Vice President Joe Biden.

"It's a good thing, as the president has stressed, that this is a two-year plan," he said, adding the economy was in a "fragile" stabilization phase.

Biden has said the Obama team had misread how bad the economy was when it took office, though Obama, in a subsequent interview, corrected him, saying "rather than saying 'misread,' we had incomplete information."

Republicans are eager to paint the stimulus program as a failure ahead of mid-term elections in 2010, which could change the balance of power in the US Congress. Democrats now have big majorities in both the Senate and the House of Representatives.

White House spokesman Robert Gibbs said the administration's actions had prevented the economy from going over a "steep cliff" but declined, again, to speculate on whether another stimulus package was necessary.

"We don't rule anything in, we don't rule anything out," he said. Asked whether the Fed's unemployment projections affected the White House's implementation plans for the stimulus program, Gibbs said the administration had not had enough time to digest the latest Fed projections.