WASHINGTON (CNN) - Congressional Republicans tore into the Obama administration over its implementation of the economic stimulus plan Wednesday, arguing that the White House is mishandling the distribution of the money while dramatically overstating the ability of the package to create jobs.
Among other things, they criticized the White House for constantly referring to the number of "jobs created or saved" by the $787 billion package - a metric, they claimed, that is impossible to verify.
The White House Office of Management and Budget defended the plan, arguing that every federal dollar spent has, by definition, helped to ease the pain of the worst economic crisis since the Great Depression.
The Republican and Democratic leaders traded their arguments during a contentious hearing before the House Oversight and Government Reform Committee.
"In selling the stimulus package, the administration promised the American people that (the) legislation would create or save 3.5 million jobs and prevent the U.S. unemployment rate from rising above 8 percent," said Rep. Darrell Issa, R-California.
"I believe that the discredited Keynesian theory behind the effort is misguided, and I am convinced that it won't work," said Issa, making reference to the theories of economist John Maynard Keynes. "Unfortunately, recent economic data has validated my opposition."
The economy has shed 3.4 million jobs over the past six months, according to the Department of Labor. The unemployment rate rose for the ninth straight month in June, climbing to 9.5 percent while hitting a 26-year high.
"From the moment he was elected, the president has put the economy front and center," countered Rob Nabors, deputy director of the White House Office of Management and Budget.
"We are slowing the economic freefall (and) the recovery act is an important part of that effort. ... It's a work in progress, but it's steady progress."
Nabors said that the recently reported loss of 467,000 jobs in June was disappointing, but it nevertheless represented an improvement from the 691,000 jobs lost on average in the first three months of the year.
Republicans also criticized the use of stimulus funds for initiatives such as the extension of unemployment insurance.
That kind of spending, while beneficial in some ways, does not "dollar for dollar, create or save a job," said Rep. Jason Chaffetz, R-Utah.
"I don't see how you can say that," Nabors replied. "We believe that any dollar spent in the federal system will create or save a job, because what's going on is we are putting dollars into people's pockets to spur demand."
Congressional Democrats offered mixed reviews of the implementation of the stimulus package, arguing that the package was necessary, but improvements could be made in its implementation.
"Frankly, there is good news and bad news," said the committee's chairman, Rep. Edolphus Towns, D-New York
"The good news is that money is flowing from the federal government to the states at a faster rate than the Congressional Budget Office predicted at the beginning of this year." The bad news is a General Accounting Office finding of "significant shortcomings in the targeting and tracking of recovery act spending."
Stimulus money should be primarily directed toward economically distressed areas, Towns noted, but there are "substantial variations among states as to what constitutes" such an area.
While many leading Republicans say the stimulus plan has been a waste of money, some economists - like Nobel Prize winner and New York Times columnist Paul Krugman – have argued the original measure was too small.
Vice President Joe Biden said Sunday that the administration "misread how bad the economy was," but he told ABC's "This Week" that the pace of the stimulus program would be increasing.
Speaking on NBC's "The Today Show," Obama on Tuesday said "rather than say 'misread,' we had incomplete information."
He also told ABC's "Good Morning America" that "there's nothing that we would have done differently.
"We needed a stimulus and we needed a substantial stimulus," he said.
Democratic leaders in Congress are now kicking around the idea of another stimulus.
House Majority Leader Steny Hoyer said Tuesday he would consider supporting a second economic stimulus bill, but added that people need to give the package that passed in February more time to work.
The president said he's not taking the idea off the table, and one of his top economic advisers has already called for one.
Republicans, however, have accused the White House of not getting its story straight.
"They said the stimulus was necessary to jumpstart the economy. Yet now, with about a half million jobs lost every single month, they've started to admit that they simply 'misread' the economy. These were costly mistakes, and we can't take them back," Senate Minority Leader Mitch McConnell said Tuesday.
Despite a tough year for Republicans, GOP strategists say the economy is part of the party's road to recovery.
"Nothing has really galvanized the Republican Party more than the stimulus vote," Republican strategist Doug Heye said. "One thing that we've seen is that the president's popularity, while he's still popular throughout the nation, really is taking hits in key states."
– CNN's Deirdre Walsh contributed to this report.
Tom L July 8th, 2009 2:44 pm ET
I believe it is you who is suffrering from memory loss. The democrats have controlled congress for the last 2 years of Bush's presidency. Let's get the factsstraight. "
No, Tom, you need your facts straight. The Democrats had a slim majority from 2007, but Bush vetoed every bill they sent to him that wasn't already rubber-stamped by him (or he added a signing statement negating the bill.) That is hardly CONTROL by Democrats. Had we been in control, Bush and company would be under indictment now.
We are still awaiting the GOP Alternative Plan...you know something we can get our teeth into. Seems that their(GOP) PLAN in the last Administration help to create this monster of debt and a PHONY Economy. Frankly, the issues of today may have gone back as far as Clinton's Administration. Where have these good GOP legislaters been over the past 6 to 7 years ???? I guess they were not pulling together solutions...................just taking "pass the buck" pills ??? They ought to be ashamed of themselves. If any of these GOP idiots are representing my district .....they need not count on this Moderate Republican's vote. How dare they blame an eight month old administartion for this..They are nothing but a bunch of do nothing HYPOCRITES... counting on the uninformed lazy voters ballots.
"The White House Office of Management and Budget"
Now thats what you call the ultimate oxymoron..
GOP complains. Bears poop in the woods. The pope wears a funny hat. Blah blah yackity shmackity.
Dennis July 8th, 2009 2:39 pm ET
Bush left a problem no doubt, but Obama has magnified the problem exponentially. Doing nothing would have been abetter option
Please explain how doing nohing was a better option?
It doesn't take a brain surgeon to figure out it didn't work. Gotta love the Liberal responses here that just can't admit Obama is clueless when it comes to the economy..........or anything else for that matter. Their only words are Bush's Fault, Bush's Fault. The Bush's Fault grace period has expired and Obama owns the economy and he is destroying it faster than you can blink.
PS The economy was booming for most of the Bush presidency and anyone who wanted a job had one. The housing mess started under Clinton policy. Do a little research and get away from your college brainwashing where facts aren't relevant.
Republicans are nothing but crybabies and liars. They take no responsibility for what they have done to this Country. They only want to denegrate any attempt to right the ship of State that they have caused to list so severely.
No ideas. No morals. No ethics. No common sense. No leaders. No No No.
The party of STUPID lives on in a very vocal 25% minority.
Thank God the solid majority is intelligent.
What really gets us all sick is the constant complaining by the GOP "not so faithful"
1. These people never said a sneevling word when spending was going totally out of control. Remember the first 2 stimulus bills were authored by the Bush Administration (i.e. tax cuts in 07, bank bailouts in 08). None of these now conscientious, yet pathetically hypocritical GOP pee ers said a word.
2. When the prior administration spent billions to save banks ($700 bn) in 2008, what kind of sense would it make to let them fail early in 2009.
3. How do tax cuts work for people without taxable incomes and/or out of work?.....as if, according to the GOP buttheads, that was our only option.
Pathetic! Well now the course of action is to blame Obama. Hopefully every voter will think this is all his doing when elections come around.
America's current woes can be traced back to exactly Nov 2006. Congradulations again to the progressive liberal..
they havent CONTROLLED congress!! the republicans LOST control of congress. repubs have been in control of congress for more than a DECADE ! it became even in 2006 and NOW the dems have control!
I am waiting for a clear alternate plan from the Republicans...still waiting...
@ Phat Elvis, wh oasked "And the GOP's brilliant idea for economic recovery is….??????"
Their plan is simple. Do nothing. The economy is a magical fairyland that regulates and fixes itself because the people in it are super trustworthy and not out to horde as much money and assets as possible at the expense of those who either need their products and services or can be manipulated by deceitful and fraudulent actions into accepting credit to buy things they don't really need.
Well I know we have asked this before but its been a couple weeks (for me at least)
Republicans, conservatives, all who bash Obama's attempts to fix the economy, aside from tax cuts, which has proven inefficient, what is your plan B? Personally, i think that if spending needs to be cut back, it should be cut back in different areas over different times. cut spending on defense for a month, then cut spending on health care for a month, then cut spending on the department of transportation for a month. Shut down the FDA for a week every month. Suspend designs of high tech new prototypes for a few weeks, I bet if the money we spent on prototypes that didn't work went to paying more people to join the millitary, we could actually stay safe while saving money.
I can't believe the Republicans are even saying anything about what this administration is trying to do and for the folks on this board complaining about the spending question ...what would you have the President do? Not try to stop the economy from tanking? Not try to show China (the country that has most of our debt) that we still have a viable economy? You folks don't get it. I don't care how much they spend as long as they get things going back on track. The folks you should blame are the coporation that are constantly sending your jobs overseas and still making fat profits for the CEO's who all believe in the Republican economic theory of the strong will survive and small business is the way to economic growth...PLEASE!!! Oh yeah...I do blame BUSH because if he hadn't started that bogus war in Iraq we would have had those Billions of dollars to do something!!! You idiots need to get a life!!!
Who came up with using the adjective 'slamming" anyways ?
Rather childish reporting if I say so myself ...
The big recession of 1981, during the Reagan administration, took several years to recover from. Reagan tried to ignore it until he finally had to admit it in October of 1981. Reagan vastly increased government spending. To combat this recession, Reagan raised taxes on corporations in 1982. These are facts that the G-No-P don't want to Americans to remember.
Obama inherited an economy in recession, a recession that the Bush administration had been trying to slow down, once by sending Americans stimulus checks and a second time by bailing out Wall Street. The actions by Bush and Obama have kept us from dropping us into a depression, but recovery will not be quick. Republicans would have us think that the government doing nothing would have been the best way to go because their constituency is wealthier and thus better able to withstand hard financial times.
Finally, by doing their best to blame this economy on Obama, Republicans are hoping that American voters are dumb enough to forget what the economy was like during the last years of the Bush administration.