July 8th, 2009
01:07 PM ET
5 years ago

GOP slams Obama stimulus as ineffective, wasteful

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.


Filed under: Uncategorized
soundoff (116 Responses)
  1. awaitingliberalizationbyCNN

    It was horrible from the beginning, the congress didn't read it, even though they realized those that wrote it were complete fools. It will be discussed at the TEA parties which unfortunately those who rely on the MSM for their information will know nothing about because the libs tell them to pay no attention to the ever growing dissent and unhappiness the Obama administration has caused.

    July 8, 2009 02:09 pm at 2:09 pm |
  2. Jimmy the Greek

    Obama:

    "Unemployment won't exceed 8%"

    ....

    "Uhh... it won't go higher than 9%"

    ...

    "Look – things are going to get worse before it gets better..."

    ....

    "We underestimated the ... umm... IT'S ALL BUSH'S FAULT..."

    I'm beginning to believe being a community organizer was above his paygrade – much less being president!!

    July 8, 2009 02:10 pm at 2:10 pm |
  3. Michael M, Phoenix AZ

    Well of course they are slamming Obama....it was the Republicans who rammed the bailout money through to begin with and the only stimulus that came out of that was AIG and Goldman, Sachs with the auto companies getting hurt real bad. Now, that was real trickle down economics ala Reagan, except that it was the job losses that flooded not trickled. Trickle down economics worked like a leaky pipe, it dripped slowly until the pipe finally broke, but no water came out!

    July 8, 2009 02:11 pm at 2:11 pm |
  4. Johnny DC

    Why do the Democrats feel they are on a free-roll here? How much longer can they play with house money? That's been Obama's contention the entire term thus far - that at the very least, he can simply blame the prior situation for the mess.

    Maybe that was the case, but you've dug your own massive hole now, Mr. President. I believe the country is starting to realize that making things worse isn't a viable answer, and your legacy is not sacred enough to pretend the GOP got us this far. They handed you the keys, but you drove the car over the deep end.

    July 8, 2009 02:12 pm at 2:12 pm |
  5. Laverne

    The GOP always call themselves slamming the Dems, with no real input or real alternatives. The Dems are not always right, but the repubs are obstructionist and I have such a lack of respect for them as a whole. They screwed up the past 8 years and now want to pretend they have all the answers. I am confident they won't prevail in the end, there is something bigger going on here than what they can see!

    July 8, 2009 02:12 pm at 2:12 pm |
  6. Sharon Kitchen

    I find it very strange that the GOP,that created this mess is so Fast to judge..............................I know they "think" they sit up with the angles and can dp no wrong......but in fact they have done this country and it's people a WORLD OF HARM.

    They need to re-group.
    After they find themselves.....
    and then what they stand for......
    then speak.

    July 8, 2009 02:14 pm at 2:14 pm |
  7. Doug, New Jersey

    Those who voted for this didn't even read what was in it. Just like sheep libs they went along with it without knowing any details.

    It is just crazy that a Democrat will attack someone for pointing out this major fact. Why? Do you really think it is better that we just give Obama a rubber stamp for anything he wants without understanding the details? Does lib now consider reading to be a hate crime? Lib Democrats just slobber their hate, lies and division, that's obvious when the lib calls you a racist for using the term "Keynesian" to describe Obama's economics, they are so programmed to ignore facts and call people racists that they don't care about what the term really means, it just has to be about Obama's father being from Kenya-LOL! How can any thinking person who has an ounce of good in their heart support these libs?

    July 8, 2009 02:14 pm at 2:14 pm |
  8. Truth

    MICHAEL – You are completely incorrect. WHile it is true that Bush was at the helm when the first stimulus bill was passed, every single Republican Senator voted against it and every Republican Rep in the House, with the exception of just 2 of them, also voted against it. Good try though.

    July 8, 2009 02:15 pm at 2:15 pm |
  9. Will 18E

    New flash GOP * years of Bush crippling.

    July 8, 2009 02:15 pm at 2:15 pm |
  10. FEMALES FOR FEMALES

    Remmber how all this stimulus business started. It started with George Jr. giving three trillion dollars in escrow that Bill left back to the masses then declared war on Iraq. He was one smart fellow wasn't he. Another thing. Why do we have to refer to etnic groups as African Americans the other as other and so on. The african americans are no more african than I am an englishman although my ancestors came from there. Why not one classfication for all. AMERICANS (check the blank) ILLEGALS (Check the Blank. You're either an american or you're not. If not then get the hades out of this country.)

    July 8, 2009 02:16 pm at 2:16 pm |
  11. Tim in NC

    Listen to them, Obama!

    The GOP are the experts on wasteful spending.

    July 8, 2009 02:17 pm at 2:17 pm |
  12. Dutch/Bad Newz, VA

    GOP definition of stimulus = Tax cuts for the rich

    It's been PROVEN that when you give the wealthy tax breaks, the money doesn't reach the bottom to the people who need it the most. So the GOP can do all the slamming, blasting or whatever idiotic verb you guys want to call it when it comes to the stimulus bill.

    July 8, 2009 02:18 pm at 2:18 pm |
  13. Kevin in Ohio

    Keep on spending us to oblivion, liberals...... that makes your demise in 2010 more and more likely by the day. For those who say republicans/conservatives have no ideas.... 1)you won't listen anyway, and 2) our entire philosophy is to put money in the hands of THE PEOPLE (Rich AND Poor) where it will increase GNP....not in the hands of government where it has little or no impact on GNP.

    July 8, 2009 02:18 pm at 2:18 pm |
  14. Doug, New Jersey

    Think about it, the average Democrat wants the Obama government to monitor all actions and phone calls of Americans who went to a tea party, but were foaming at the mouth for Bush monitoring terrorists.

    They complained about Bush's spending but when Obama has out spent every president who has come before him COMBINED they defend it.

    Do you think that ultra blue states that elect Frankens would not elect Osama Bin Laden if he had a little d next to his name?

    July 8, 2009 02:18 pm at 2:18 pm |
  15. Tony

    Please show me what this stimulus did...............

    Where are the jobs......................

    July 8, 2009 02:18 pm at 2:18 pm |
  16. Enough

    Yup, that about sums it up, ineffective just like the entire Obama presidency to date. The blame Bush grace period has expired. This is Obamas economy and he owns it and everything he is doing to destroy it. Biden saying they under "estimated" the economy ..............ya think! Economic lesson, throwing money around does NOT stimulate the economy!

    July 8, 2009 02:19 pm at 2:19 pm |
  17. Republican

    Stimulus to be spent in 2010, 2011, and 2012 will do nothing in 2009. That is the stimulus they gave us and now they want more. More spending do get us deeper in dept to get the country closer to failure. Is that what this administrations wants? NO MORE SPENDING OF MONEY YOU DO NOT HAVE!!!!!!!!!!!!!!!

    July 8, 2009 02:19 pm at 2:19 pm |
  18. Trade Freedom for Security, Lose Both

    Hard to know if it is ineffective because very little of the stimulus money has been put into action – only 14% last I heard. And the states used they have received so far to reduce their budget deficits since many states fiscal years end on June 30. So the money hasn't really gotten into the economy yet. But I am sure that is Bush's fault too.

    July 8, 2009 02:19 pm at 2:19 pm |
  19. Cyberthugin

    Things were better when bush was in office, I'm sorry to say but I have that feeling things are not getting done.

    July 8, 2009 02:20 pm at 2:20 pm |
  20. Jackson

    what has a republican done for you today?

    July 8, 2009 02:20 pm at 2:20 pm |
  21. Texas Observer

    GOP = Part of 'NO'

    Case closed!

    July 8, 2009 02:20 pm at 2:20 pm |
  22. Andrew

    All this rabble rabble from the right and only 10% of the money has been spent. talk about jumping the gun.

    July 8, 2009 02:20 pm at 2:20 pm |
  23. phonix86

    Michael M and Ms. Kitchen,

    The only part of the government spending that is working has been the TARP, which is showing signs of opening up the credit markets once again.

    The Porkulus package that Obama, Pelosi and Reid rammed through was a disaster. Republicans correctly said that it would do no good. It hasn't. Now, dems want to spend more.

    Say what you want about Bush, but Obama's plans have resulted in 2 million ADDITIONAL unemployed.

    Don't blame Bush because you were duped in the election.

    July 8, 2009 02:20 pm at 2:20 pm |
  24. Don

    I have said it all along, you can not spend money you do not have. You do not need to go into dept by borrowing money that you can not pay back. Americans will be trying to pay this debt back 10 years from now that is if we still have an America that is not under Muslim control.

    July 8, 2009 02:21 pm at 2:21 pm |
  25. GINA, OHIO

    what ideas do the " grand ole party" have! none!!!!!!! they have not given one idea whatsoever! why can't they fix the economy? because they dont know how either!!!!!! if they did they would have stuck their old stodgy noses in and done so! i am so disappointed in the gop! i think this party is becoming obsolete! prepare for extinction gop!!!!!

    July 8, 2009 02:21 pm at 2:21 pm |
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