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. Casy

    As dysfunctional as the MSM want us to think the GOP are, Obama will be the reason why the GOP regain power. The GOP don't have to do much because Obama and the Dems are doing it for them and Obama and the Dems are too arrogant or stupid to realize this!

    July 8, 2009 02:39 pm at 2:39 pm |
  2. gl, From Pittsburgh

    "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."

    Nobody like progress, but want things to happen over night. That why people sell drug, it bring them quick money, but look at what cost. Just last month, if I recall, when the Republicans thought things was looking better they were screaming that a Stimulus wasn't necessary.

    Now today it a different story since the progress is not fast enough. Give it time becasue it took time for us to get her.

    July 8, 2009 02:39 pm at 2:39 pm |
  3. Simmy

    Republicans would rather plot and scheme to win, than cooperate with the administration to heal our country. The 'good old boys' got together and planned their reign of obstruction even before President Obama took office.....They spin and lie 24/7 and use any token they can to counter the good, and highlight their non-agenda.......If they ever win a majority again, Democrats will be losers in more ways than one.....I hope that day never comes.

    July 8, 2009 02:39 pm at 2:39 pm |
  4. history repeats

    mike

    if unemployed began after obama took over i can understand you blaming this on obama. however an economy does not crash overnight. it takes yrs of deregulation and bad practice. repubs have been pushing deregulation since the clinton admin. but you ADD republicans think dems came in 2006 and destroyed everything. if we didnt start 2 wars and were smart after 9/11 we would have plenty of money to handle this situation. but we dont. and we are still paying these wars WHILE the economy is still crashing. its time to come to terms with the fact that you voted for a moron TWICE!! just admit it already.

    July 8, 2009 02:41 pm at 2:41 pm |
  5. Tom L

    @Will-South Dakota
    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 facts straight.

    July 8, 2009 02:44 pm at 2:44 pm |
  6. history repeats

    what is going to happen is the repubs will continously blame the dems and obama until people just start believing it. this country is super gullible. if you say something over and over and over again these people start actually agreeing!! its an amazing thing. in 10 yrs everybody will forget. well thats if we are still as priviledged as we are today!

    July 8, 2009 02:44 pm at 2:44 pm |
  7. Frank, Las Vegas

    What a shocking story, the GOP whining and complaining about President Obama and what America voted for. The new GOP should learn to get on board or get out of the way.

    July 8, 2009 02:44 pm at 2:44 pm |
  8. Fla.

    Please. If the GOP had their way, Republicans would create Hooverville all over again with another DEPRESSION.

    The GOP seems to have less concern for average Americans suffering during challenging times, only ridiculous "tax cuts" for their wealthy interests. History has shown their failed ideology does NOT "trickle down." Give me a break.

    In addition, recent projections indicate our economy should be out of the recession by the second half of this year, which means the stimulus is attributing to some cautiously optimistic signs going forward.

    Godspeed, Mr. President.

    July 8, 2009 02:44 pm at 2:44 pm |
  9. donttreadonme

    The uniformed will blame George Bush and the Repubs for all of this. The facts paint a different picture.

    When the dems took over congress in 2006 Bush was in office for 6 years and the unemployment rate was 4.6 and gas was $2.10 a gallon. Now with the dems in control for 2 1/2 years unemplyment is at 9.5% and gas is back at $3.00 and climbing.

    Barney Frank and Chris Dodd were major players in the Housing market colapse.

    As far as the bail outs it was the dems who voted with George Bush to pass the first bail out. Intially the Republicans had blocked it the first time.

    July 8, 2009 02:46 pm at 2:46 pm |
  10. Brennan

    Uh... The GOP have no room to talk! Do i need to remind them of the $3 Trillion dollar war they authorized for Bush to conduct, and the economic downturn that started in '06 on their watch!

    July 8, 2009 02:46 pm at 2:46 pm |
  11. David Newport, OR

    read the story right above this how the money is supporting cash-strapped states. If you lived in one of these state, as I do, I am 100% confident you would appreciate it.

    July 8, 2009 02:48 pm at 2:48 pm |
  12. Will

    Ideas, sure, they should have cut corporate taxes to encourage businesses to hire new employees and keep their workers. This was McCain's position in the election. It worked for Reagan in the 80's, there is no proof that government spending gets you out of a recesssion historically. Unfortunately we just burned into the defecit another trillion and anything done now would only further burden us. Obama and the Democrats had one bullet and they wasted it. It wasn't a stimulus plan, it was spending 800 billion of the things the Democrats wanted to do for the past 8 years, what a sham.

    July 8, 2009 02:49 pm at 2:49 pm |
  13. Dustin, OR

    Oh there's a surprise. The GOP is slamming Obama. You're going to have to do a lot better CNN. We already know that the "Party of No" slams the president every chance they get. They are a bunch of sore losers who will be out of power for a very long time. Why?

    Because when they're in power wasteful spending is okay, when they're out of power they're crossing every T and dotting every I. I'm not buying it. The GOP hates the government and wants to see it stay underground, since their leader George Worst President Bush ran the government in the ground.

    The GOPers will never get my vote. President Obama is doing a fine job and he can take all the time he needs to put this country back together, after the hatchet job GW did–I can wait.

    Obama/Biden 2012

    Also, any party who thinks Sarah-Never-Read-A-Book-But-Wants-You-To-Buy-Hers-Palin should be the leader of the free world is wacko.

    July 8, 2009 02:49 pm at 2:49 pm |
  14. Susan (Michigan)

    Republicans would not be happy if there were a billion jobs created, nor will they be happy if a hundred are created. Bottom line is, they all agree with Limbaugh and want this to fail, and fast. If the stimulus is a success, they will lose more ground in their plan to take over America. Can't have those awful Dems actually helping the country now, can we? I mean, it would be unthinkable if a black man saved America from the rich Republicans who scream about deficits only when they aren't spending for them themselves.

    July 8, 2009 02:49 pm at 2:49 pm |
  15. Deb in Colo

    ...and the GOP had such helpful ideas about how to get out of the recession/depression.

    "Let's cut taxes on the rich! Maybe they'll be generous and trickle some money to the little guy." Like their Guatemalan maid/nanny.....right!

    July 8, 2009 02:50 pm at 2:50 pm |
  16. DLHanna

    Recessions can't be fixed in 6 months! I've seen stimulus jobs in DC, but people have to be patient. The stream will soon overflow!

    July 8, 2009 02:50 pm at 2:50 pm |
  17. greg

    I need answers.
    Please tell me how Cap'n Trade really helps ME at all.

    Please tell me how government health care makes MY health care better, not worse.

    Please tell me where all the stimulus money is actually going, (other than out of my pocket.)

    Does anyone else suspect that all of this is less about helping America than about taking controll out of the hands of Americans?

    Please tell me that we have not come this far just to sink into the same tyranny that the rest of the world has come to admire us for and to depend on us to avoid.

    July 8, 2009 02:50 pm at 2:50 pm |
  18. history repeats

    Casy

    you say obama and dems are stupid and are giving power back to the GOP. let me tell you something MOST intelligent people see the GOP for what they are now. BABIES only out for political power. the silly ones are people like you. you voted for bush twice and mccain and palin last yr. you and your family sit around hating obama and think because the 20 friends you have are republicans that everyone thinks like you and the country sees obama for what you ALWAYS KNEW he was now. but youre wrong. we might question obama sometimes because dems actiually hold their leaders more accountable than repubs but one thing we will never do is go back to youre moronic idols!

    July 8, 2009 02:51 pm at 2:51 pm |
  19. Jim

    more sensationalizing by the republicans who caused the mess to start with.

    so quick to point fingers away from themselves, and yet, not offer any solutions or even to help coming up with a solution.

    pathetic.

    July 8, 2009 02:51 pm at 2:51 pm |
  20. Cindy PA

    The teleprompter president, Chris Dodd, Barney Frank, every Democrat needs to be investigated, first for tax evasion, then for driving this nation into bankruptcy. The “Porkulus” Spending bill, their budget, this is gross negligence.

    Let’s review,
    higher unemployment
    higher taxes
    higher home foreclosure rate
    auto industry in the tank
    stock market in the tank
    tax evading Democratic Party
    tax evading Obama administration
    the “Porkulus” Spending bill
    out of control budget

    Depressing being an American under the Obama administration.

    July 8, 2009 02:51 pm at 2:51 pm |
  21. Obama Victim

    say what you want.............but un-employment keeps going up...and the market keeps going down..............as many of you know.....I am no genius............but it would seem to me that this thing didn't work

    July 8, 2009 02:51 pm at 2:51 pm |
  22. Michael M, Phoenix AZ

    Michigan Jim,

    No, I said it was the Republicans..... Paulsen and his "have to have the money now" and most everyone in the Congress bought it without knowing all the facts. It has snowballed since, before Obama took office....he just is trying to keep money flowing, but we need to know where the money is actually going. Certainly not to me...I am now an unemployed teacher in Arizona, along with hundreds of other teachers because our legislature cut state funding, and just recently compromised with the Governor, but it is too late for most teachers to recoup their positions.

    July 8, 2009 02:51 pm at 2:51 pm |
  23. citizenjane

    @Jim, Michigan "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."
    -------------–
    The GOP didn't become a minority until Jan. 2007. The election giving the dems control was held in Nov. 2006.

    I'd say it's quite difficult for a minority, dems in this case, to ram the economy to hell without support from the other side as well.

    July 8, 2009 02:52 pm at 2:52 pm |
  24. johnq

    I sincerely question whether the apparent Obama supporters here are US citizens. It sure appears that they are, like Obama, trying to destroy everything this country has been built on. Change – you can keep it.

    For those that want to blame Bush... Do some research folks, the problem came from the democrates with housing and finance.

    Now, we are TRILLIONS more in debt and YOU are going to be paying for it. Obama give the money to big government and it will come out of your paycheck and the cost of things YOU purchase.

    July 8, 2009 02:53 pm at 2:53 pm |
  25. Dutch/Bad Newz, VA

    @ Dennis

    Doing nothing would have been catastrophic. If you think we're in bad shape now, I can only imagine how much worst off we will be if we did nothing and watch the economy collapse. Now's not the time for the blame game. The stimulus bill didn't take effect until 4/1/09. It's only July. Things don't happen overnight.

    July 8, 2009 02:54 pm at 2:54 pm |
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