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. judy

    Where were they when their leader Bush was squandering money and reputation. The word "republican" is now an insulting description for anyone!

    July 8, 2009 02:22 pm at 2:22 pm |
  2. gl, From Pittsburgh

    I am sick of CNN being the mouth piece for the Repubicans Party.

    July 8, 2009 02:22 pm at 2:22 pm |
  3. J.P.

    What, you're shocked and surprised that pouring more gasoline on the fire is NOT putting it out?

    Please, someone, ANYONE, tell me how my life is going to be better with the government stealing EVEN MORE MONEY from me?

    John F. Kennedy proved this nearly 45 years ago... lower tax rates spur investments, grow businesses, create jobs, grow an economy and spread prosperity. Bush and Barry's $200 "stimulus" checks are merely a sugar buzz. Where's the Beef?

    July 8, 2009 02:22 pm at 2:22 pm |
  4. Mike b

    Why are the GOP crying now, are they upset about what they created.

    July 8, 2009 02:22 pm at 2:22 pm |
  5. Angela in LA

    People stop bellyaching!
    Its not like a few billion in spending was going to plug this hole that has been around for over 15 years.

    The GOP cry when he spends, and would cry if he didint. They would cry if he cut taxes, and would cry if he didint.

    Hey, Im pissed too. Im one of those people who has been without a job for near a year, and I want the president to get off of TV and start laying down some hard policies that can get pushed through without being watered down like all that that has passed thus far.

    I want to see the bailout that started under Bush, and that Obama continued stopped, and the regulations that they need to be into place because there is no such thing as 'free market'.

    I want a serious look at new industry in this country, because what they fail to tell us in school is not everyone can/ or wants to be a lawyer or a ceo, and genuine blue collar jobs are just as valuable. This new industry should be green, but it need to happen now.

    Everyone on both sides is blaming everyone else and Im just sick of it as an American. Just get some stuff done! They dont have to worry about it, they have jobs, but there are many of us out here who are sick of both sides. I dont care what party you are affiliated with, be pro active and WORK!

    July 8, 2009 02:23 pm at 2:23 pm |
  6. Russ

    All I can say to you poor, poor Republicants.....Whaaaaa, Whaaaaaa, Whaaaaaaa. Don't you ever get tired of whining? Even my 3 year old eventually quits crying and moves on. Maybe you should all follow Palin's lead and just quit. Your worthless for the most part anyway.

    July 8, 2009 02:23 pm at 2:23 pm |
  7. Billy

    The GOP is really good as slamming people and ideas but no so good with coming up with them.

    July 8, 2009 02:23 pm at 2:23 pm |
  8. David from WI

    "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!"

    Oh thank God for the Dems they are so much better than the GOP right. The only difference is that when they want you to bend over and take it you don't mind as much and when thier ideas don't work they can blame the other party.

    Both parties will rear end the American people only the ignorant still think one party is better at it than the other.
    Oh you are a Dem not a GOPer. Ill get the lube.

    July 8, 2009 02:24 pm at 2:24 pm |
  9. Paul Lowell

    It should be remembered that the DEMS created this economic mess. Schumer, Frank, and Obama pressured Fannie Mae and Freddie Mac to make high risk loans to people with no chance to pay them back. The housing bubble and lack of oversight is on the DEMS. They created this mess and they are only making it worse.

    July 8, 2009 02:25 pm at 2:25 pm |
  10. Wisconsinite for the Grand Old Party

    This is the GOPs best weapon against Obama. If they can brush aside gay marriage and the abortion issue by leaving those choices up to the states, they can win every debate in the 2012 campaign.

    Ironic that the economy issue killed McCains campaign, and now it is poised to kill Obama's presidency.

    July 8, 2009 02:25 pm at 2:25 pm |
  11. Hugo

    How could anyone believe the stimulus anything but a failure, just wait for the long term effect! Liberals, the government must keep at least 50% of the population under their thumb, dependent on their handouts. This allows them to push their agenda, be it either right or left. It doesn't help you, it hurts you, if you take their "bribe" for your vote then you are not FREE! Who of the employed that gets their paycheck from other than a tax payer funded source did not see what an economic train wreck we were headed to? How can an elected official in Washington DC getting an uninterrupted $ 200K plus paycheck even have a clue as to what is going on in the private sector? Once elected, they get their salaries and healthcare benefits for LIFE, where is that in the private sector?! Until they share in the pain such as a cut to THEIR paycheck and/or benefits, Washington elitists just wont get it! CLEAN HOUSE 2010, 2012! BRING COMMON, PRACTICAL SENSE TO A NEW FORM OF POLITICS! TERM LIMITS, CAMPAIGN FUND REFORM, VOTER REFORM!

    July 8, 2009 02:25 pm at 2:25 pm |
  12. Len in Washington

    Hey Folks! It was the BUSH Administration that started all this.
    REMEMBER??????
    So to all you Republicans and "Tea Party Whiners" out there I simply say.....Quit your complaining and start helping!
    Your constant rhetoric of disatisfaction is getting old.

    July 8, 2009 02:26 pm at 2:26 pm |
  13. Zach K

    The GOP doesn't deserve the White House for 20 Years, or even more.

    The package is only a small slither of what the deficit Bush gave us.

    July 8, 2009 02:26 pm at 2:26 pm |
  14. dave

    the free market system is not a good model for medicine.

    Medicine is about preventing and curing diseases - the profit motive is of no benefit -- how many sick people have been cured by the thousands of health care executives with 7 figure salaries -- NOT ONE - every dime earned by blue cross exectives is wasted

    free markets are great for selling shoes or cars - i do not want to lose lung doctors who change into plastic surgeons to make more money

    do you want several police departments competing in your town. do you want three different fire companies bidding for fire protection on your street

    July 8, 2009 02:26 pm at 2:26 pm |
  15. jim - chicago, illinois

    so basically it boils down to this:

    president obama wants to spend $787 billion on getting this country back on its feet, and republicans are squaking that he's spending too much, too fast, too willy nilly.

    may i remind these republicans of the boondoggle that is iraq, and how a certain republican president was so eager to throw money down that rathole. may i also remind republicans that there are BILLIONS of dollars spent on iraq that cannot be accounted for.

    so it's okay to fritter away billions of unaccounted for money on iraq, but it's not ok to spend billions of accountable money to help jump start this country's economny? i will never understand republicans...

    July 8, 2009 02:26 pm at 2:26 pm |
  16. Real Change

    "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."

    Right right....but please by all means you go right ahead and tell us how ineffective it's been even though the effects are "impossible to verify."

    July 8, 2009 02:26 pm at 2:26 pm |
  17. citizenjane

    The GOP, still stuck on stupid after 6 months, has yet to explain how "slamming" Obama is offering any concrete solutions.

    In all actuality, I blame CONGRESS, all of them, for the mess we are in, and the inability to stem the flow.

    Pointing fingers is utterly childish, and the GOP continues to prove time after time just how out of control they are.

    July 8, 2009 02:26 pm at 2:26 pm |
  18. FreeNLovIt - Romans 1:16 For I am not ashamed (1SPMI) of the gospel, for it is (3SPAI) the power of God for salvation to everyone who believes (PAPMSD), to the Jew first & also to the Greek

    Whatever.... ELEPHANTS must pay back 5 trillion dollars they gave to the last administration before they can slam Obama to pay it all back. We're in these situations because of THEM. They ate all the peanuts and buried the remainder of them.

    July 8, 2009 02:27 pm at 2:27 pm |
  19. GOP = 21st century dodo

    We totally should've gone with the GOP plan.

    Oh wait, the GOP has no plans.

    July 8, 2009 02:27 pm at 2:27 pm |
  20. MoMan

    What gets me, is did everyone really think this economic crisis was going to be fixed in a matter of months? It's way too early to tell if the stimulus package is actually helping or hurting. Has anyone thought about what the consequences would have been had they not passed it? What if they wouldn't have helped the auto industry? More dealerships lost.. more jobs lost.. and not just at dealerships or at the auto plants.. plants that make components.. auto parts stores.. trucking companies that supply the plants and stores... which in turn would lead to more foreclosures as that many more people lost jobs..more people to sign up for government programs costing us even more.. people need to take a broader look at the implications.. there is no quick fix, it will take years.

    July 8, 2009 02:29 pm at 2:29 pm |
  21. Lost in Texas FOREVER

    you know the Reubs just can't wait to say "It's OBAMA'S fault!" even though so far the only answers they can come up with are more tax cuts for folks like Rush Limbaugh and Sean Hannity. I just can't understand ANYBODY who thought this problem was going to go away once Obama took office. I even remember him saying it was not going to be easy, it would possibly get worse before it got better, that unemployment would go up once again before the end of the year, and I also recall him saying he didn't have all the answers and he might even make mistakes. Of course we know the far right and neo-cons NEVER make mistakes.

    July 8, 2009 02:29 pm at 2:29 pm |
  22. Sunny

    The current state of economy is worse than a recission it is a depression. Also no one knew the magnitude of the problem and the fact is that the country is bankrupt. In a depression some has to spend the money to create jobs. If the private sector does not do that then the public sector has to come into picture. The best solution is to invest in infrastructure which will create the maximum jobs. Money given by Bush to Walstreet just vanished in a poof no one knows where. Now Obama the most intellegent President after a long time has taken the charge and wants to invest in infrastructure which is most logical. Results do not come overnight and it will take time. Still money has not been invested or released. Wait and see as the mess is more than what was thought of. Also americans will have to pay more taxes to increase the liquidity of the government otherwise the dooms day won't be far for the US$ which will go crashing down the floor to some of it's lowest value compared to other currency. China is demanding that it's currency should also be used as an international reserve currency. If that happens God can only save the US$. So it is time for Americans to wake up to the reality and mfg. jobs need to be brought back to US to have a strong & healthy middleclass.

    July 8, 2009 02:29 pm at 2:29 pm |
  23. SMP

    It's amazing that the very people who created this situation now have nothing to say except to criticize those who are trying to fix it. What is your plan, GOP? Oh, wait, you don't have a plan. You only know how to shoot down anything and everything our President and the Democratic party are trying to do.

    July 8, 2009 02:30 pm at 2:30 pm |
  24. RT

    Again, waiting for some ideas from the GOP......

    Anyone? Anyone? *crickets chirping*

    July 8, 2009 02:30 pm at 2:30 pm |
  25. mike

    michael-the bank bailout was unfortunate, but necessary. If you ever read an economics book, look up what happens to countries where their banking system freezes. Also, blaming Bush for this is hilarious, the unemployment rate has DOUBLED since the dems took congress. Bush's tax cuts were too heavy toward higher income, but tax cuts work in a consumer economy. We're heading toward 10% unemployment, take some responsibility.

    July 8, 2009 02:31 pm at 2:31 pm |
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