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. Will-South Dakota

    Right...GOP had 8 years to fix things under their control 8 YEARS!!!
    They GOP is sufffering from memory loss.........8 YEARS!

    July 8, 2009 02:31 pm at 2:31 pm |
  2. Wolves 4 Palin Charlotte, NC

    GOP ideas and suggestions = 0

    GOP procedures so far = complain; vote no; complain; vote no; complain.....

    July 8, 2009 02:32 pm at 2:32 pm |
  3. Fair is Fair

    Michael M, Phoenix:

    Methinks you have TARP mixed up with the porkulus package. A lot of the financial institutions that were helped by TARP are trying to pay back the money.

    Porkulus, on the other hand, is much more like your leaky pipe.

    July 8, 2009 02:32 pm at 2:32 pm |
  4. annie s

    This bill is only 5 months old and funds are still in the earliest stages of being doled out. Projects take time to be approved. From day one, analysts projected that jobs were to be created over a two year period, with the highest concentration coming in 2010 – and that it's biggest immediate boon to the economy would be in saving some existing jobs. My only concern with this bill is the same as Paul Krugman's – that it wasn't big enough and that it was too deeply weakened by the concessions to the Republicans & conservative Democrats. Lighten up Republicans, you can't keep hoping the Unites States economy will fail just so your guys can get elected in 2010 – we're all supposed to be in this together.

    July 8, 2009 02:32 pm at 2:32 pm |
  5. MartiM, Plano, TX

    Mercy. Everyone seems to be forgetting the FIRST stimulus package that former president Bush's administration passed that went straight to finance and insurance companies, with NO accounting for expenditures, and AFTER the decision to let Lehman Brothers fail, which accelerated the entire financial crisis. Thank you for remembering the facts, everyone!

    July 8, 2009 02:33 pm at 2:33 pm |
  6. Catty

    How can someone with a competent brain sit there and say, "this is STILL bushes fault"?!?! Obama has INCREASED the federal deficit By more than 40%!!! Bush didn't do that...your precious god and his wacked out economic staff did. And now they want MORE????? Are you serious? There is no more! There wasn't any to begin with!! the democrats and libs on this site are disgusting!

    July 8, 2009 02:33 pm at 2:33 pm |
  7. history repeats

    who listens to these people still?

    July 8, 2009 02:33 pm at 2:33 pm |
  8. gl, From Pittsburgh

    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."

    Look American this is what the Repubicans play was hoping and praying President Obama Stimulus plan fail so they can win back the White House at the expense of American people. Repbulicans only care about power and would rather see the President fail, which me we all fail, just to prove a point. Fear is not of GOD? It may not have been the best plan, but it was more than what the Repubicans would have done which is tax cuts. It have only been six months, the Repubicans are pointing their figures when took 8 years to get here.

    Fear is all the Repubicans party have. Anybody that believe that any President can get us back on track after six months, live a dream world.

    July 8, 2009 02:33 pm at 2:33 pm |
  9. Melissa

    Just more white noise whining from the Republicans who can't learn to keep their mouths shut and lose credibility every time they open it to scream about nothing.

    July 8, 2009 02:33 pm at 2:33 pm |
  10. A Democrat

    I guess it is our turn (democrats) to continue screwing up the country. My only regret: I wished I had voted for John McCain.

    July 8, 2009 02:33 pm at 2:33 pm |
  11. chris

    Doom and gloom, doom and gloom... with no ideas to offer of course.

    July 8, 2009 02:34 pm at 2:34 pm |
  12. Tom L

    @Sharon and Laverne
    You really need to catch up on current news. The democrats have controlled congress for 2+ years now. You can stop blaming the republicans for everything. The hard, cold truth that you don't want to face is that this stimulus package was an absolute joke. A bad joke. We were told that the stimulus bill had to pass immediately otherwise our economy would never recover and now we find out that over 90% hasn't even been implemented. Bottom line, as much as you want and need the government to take care of you, they can't. They are inefficient by nature. The best way to stimulate the economy is to let the people do it.

    July 8, 2009 02:35 pm at 2:35 pm |
  13. Melissa

    Anyone that actually thinks these politicians actually read any of these bills all the way through is an idiot.

    July 8, 2009 02:35 pm at 2:35 pm |
  14. Ohio for Obama- Suburbs

    You Gve Bush 8 years, Give Obama a chance. It's only been 5 months

    By RICARDO ALONSO-ZALDIVAR, Associated Press Writer Ricardo Alonso-zaldivar, Associated Press Writer – 53 mins ago

    WASHINGTON – The nation's hospitals will give up $155 billion in future Medicare and Medicaid payments to help defray the cost of President Barack Obama's health care plan, a concession the White House hopes will boost an overhaul effort that's hit a roadblock in Congress.

    July 8, 2009 02:36 pm at 2:36 pm |
  15. Drooling Liberal

    Well the first one worked out so great, why not?!

    As a drooling li.b.eral, I feel that whatever Obama does, is the best thing for me. Now if you'll excuse me, I've got to go back to not paying taxes and living off the dole.

    July 8, 2009 02:36 pm at 2:36 pm |
  16. history repeats

    Doug, New Jersey

    Keynesian-–i dont think anybody thinks you are talking about obamas father. and keynesian is better than friedmans idea of economics which have been proven an utter failure by everybody besides the rich and their GULLIBLE following.

    July 8, 2009 02:36 pm at 2:36 pm |
  17. JonDie

    From 2001 to 2009,. Republicans stole from the Treasury, mismanaged the economy and let Wall Street bankers rob their customers blind, leading the entire country to the edge of a second Great Depression. Republicans, therefore, have useful or positive NOTHING to offer.

    July 8, 2009 02:36 pm at 2:36 pm |
  18. John

    Republicans, Democrats, what's the difference? The GOP is incidentally right about the stimulus bill but they're still the party of no. Both parties are in the pockets of special interests and corporations anyway. Ron Paul 2012

    July 8, 2009 02:36 pm at 2:36 pm |
  19. David

    I must give the GOP a little credibility here. They are by far the experts on "WASTEFUL"

    July 8, 2009 02:37 pm at 2:37 pm |
  20. Leilani

    Uhhh...You know what?

    The GOP is ineffective and wasteful.

    July 8, 2009 02:37 pm at 2:37 pm |
  21. Bob (Illinois)

    Oh, my goodness. I'm SHOCKED that Republicans would think the stimulus package isn't working.

    Let me ask The Party of NO where a large portion of this mess originated? What's that? That's right: The administration os 'W'!

    July 8, 2009 02:37 pm at 2:37 pm |
  22. Phat Elvis

    And the GOP's brilliant idea for economic recovery is....??????

    yeah that's what i thought. it would have been a $787B tax cut for the rich. as someone once said, "Thanks, but no thanks"

    July 8, 2009 02:38 pm at 2:38 pm |
  23. Michigan Jim

    To Michael M. - your quote: …."it was the Republicans who rammed the bailout money through to begin with."

    Not quite. The GOP has been a minority in both houses of Congress since 2006. I'd say it's quite difficult for a minority party to "ram" anything through without substantial support from the other side.

    Jimmy the Greek - right on.

    July 8, 2009 02:38 pm at 2:38 pm |
  24. Austin

    Don't worry! We have another useless "stimulus" package being discussed by the White House today. Third time is a charm! Or fourth...maybe fifth???

    This is what happens when a far-left liberal community organizer, who has absolutely zero economic knowledge or experience, get ahold of a failing economy. What, did you thinks things would get better?

    July 8, 2009 02:38 pm at 2:38 pm |
  25. Dennis

    Bush left a problem no doubt, but Obama has magnified the problem exponentially. Doing nothing would have been abetter option.

    July 8, 2009 02:39 pm at 2:39 pm |
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