Washington – Offering further proof that the President’s Economic Recovery Act is working, the non-partisan Congressional Budget Office released estimates Monday showing that economic recovery funds has saved or created between 600,000 and 1.6 million jobs in the third quarter and raised the gross domestic product by as much as 3.2 percent. The CBO findings follow a report from the New York Times, citing leading economists who concluded the Recovery Act “is helping an economy in free fall a year ago to grow again and shed fewer jobs than it otherwise would.” [New York Times, 11/20/09]. In response, Colorado Democratic Party Chair Pat Waak released the following statement:
“This new report offers further proof that the Economic Recovery Act is working. Leading economists have said that the Recovery Act is on track to reach its goal of saving or creating 3.5 million jobs, and now the non-partisan Congressional Budget Office confirms this with its findings that the recovery funds have already saved or created between 600,000 and 1.6 million jobs.
“While we still have work to do to get our economy back on track, it is clear that the Recovery Act has prevented an economic catastrophe. But this success comes no thanks to Representatives Coffman and Lamborn and the Republican ‘Party Of NO,’ who put politics ahead of common sense and voted against the Recovery Act. Colorado Republicans were unanimous in their opposition to the act, preferring to continue down the path of failed Bush economic policies. Representatives Lamborn and Coffman and their colleagues in Congress have shown time and time again that they are more interested in seeing Democrats fail than in fighting for the best interests of Coloradans.
“Despite unrelenting opposition from the Republican ‘Party of NO,’ President Obama and Congressional Democrats continue to promote policies to create jobs, grow our economy and deliver on the change Americans overwhelming voted for last November. It’s time for Colorado’s Republicans to stop playing politics and to start working with us.”
http://online.wsj.com/article/SB125964003843970851.html
Key Point:
“The Congressional Budget Office late Monday said it estimates that the federal stimulus package sustained between 600,000 and 1.6 million jobs in the third quarter, and raised gross domestic product by 1.2 to 3.2 percentage points higher than it would have been without the program.”
CBO: 600,000 to 1.6 Million Employed by Stimulus
Wall Street Journal
NOVEMBER 30, 2009, 11:08 P.M. ET
By JOSEPH B. WHITE
The Congressional Budget Office late Monday said it estimates that the federal stimulus package sustained between 600,000 and 1.6 million jobs in the third quarter, and raised gross domestic product by 1.2 to 3.2 percentage points higher than it would have been without the program.
The CBO said the figures were estimates made “using evidence about how previous similar policies have affected the economy and various mathematical models that represent the workings of the economy.”
CBO Director Douglas Elmendorf, in a blog post, said stimulus recipients have reported that about 640,000 jobs “were created or retained” with stimulus funding through Sept. 30. “However, such reports do not provide a comprehensive estimate of the law’s impact on employment in the United States. That impact may be higher or lower than the reported number for several reasons (in addition to any issues about the quality of the data in the reports),” Mr. Elmendorf wrote. The CBO is required to comment on the figures released by stimulus recipients.
The White House has recently touted the figure of 640,000 jobs tied to stimulus spending, based on the reports from grant recipients, as evidence that the package is effective. But questions about the accuracy of the reports underpinning that figure have prompted criticism by members of Congress from both parties. Republicans have said the $787 billion package of tax cuts and spending hasn’t stopped unemployment from rising to 10.2%. Some Democrats have expressed frustration with the apparent inaccuracies in the job count.
The CBO in March projected that the stimulus would result in 600,000 to 1.5 million more jobs than would have existed without the spending. In his blog post, Mr. Elmendorf says the CBO’s latest estimates reflect a finding that the impact of the package’s tax cuts have been about $10 billion larger than originally projected, while the impact on federal spending because of the legislation “has turned out to be slightly smaller than CBO initially estimated.”
“Economic output and employment in the spring and summer of 2009 were lower than CBO had projected at the beginning of the year. But in CBO’s judgment, that outcome reflects greater-than-projected weakness in the underlying economy rather than lower-than-expected effects” of the stimulus, according to Mr. Elmendorf’s blog post.