White House Adviser: Economy ‘Deep in the Woods’ – but Stimulus is Working

By Caitlin Taylor

May 28, 2009 1:54pm

ABC News’ Rick Klein reports: With the stimulus bill now on the books for more than 100 days, the White House is eager to tout its impact on the economy – even while acknowledging that the nation is still in a recession, with further job losses all but inevitable. On ABCNews.com’s “Top Line” today, Jared Bernstein, the chief economic adviser to Vice President Joe Biden, told us that the unemployment rate is likely to continue to rise this year, despite the approval of the $787 billion stimulus package.  But the package is still on track to “save or create” 3.5 million jobs, Bernstein said. “The economy is still in recession. Let’s be very clear about that. When you’re losing hundreds of thousands of jobs per month, and unemployment is rising — and we expect both those things to continue for months to come — that’s a recession,” Bernstein told us. “We’re not out of the woods. We’re deep in the woods. But there are some signs that suggest the worst is behind us,” he said. Bernstein comments come as the White House continues its effort to convey optimism about the state of the economy. “When you look at the economy right now I think it’s safe to say that we have stepped back from the brink, that there is some calm that didn’t exist before,” President Obama said last night at a fundraiser in Los Angeles.  The White House is also eager to talk up the impact of the stimulus package. Said Bernstein: “The idea here is that, yes, the unemployment rate is rising, but it would be rising more quickly [without the bill]. . . . We’re spending about $1 billion a day — and, by the way, with very careful oversight — and that’s creating, again, economic activity that would not have occurred in the absence of this plan. That’s the essential point.” Obama’s presidential transition team originally predicted that a massive economic stimulus package would help hold the national unemployment rate below 8 percent.  But such forecasts have had to be revised. The latest government jobs report pegged the rate at 8.9 percent and rising, with many economists expecting it to reach double digits later this year.  The White House expects GDP growth to reach positive territory later this year, Bernstein said — but not in a sharp enough turnaround that it’s likely to bring the unemployment rate up. “Positive GDP growth doesn’t mean lower unemployment,” he said. “You have to get GDP growth at trend or above trend to get that unemployment rate down. That’s why it’s key that the plan keeps working through next year.” The president is claiming that the stimulus has already “saved or created” 150,000 jobs, though Bernstein acknowledged that that’s an estimate that isn’t based on reports of actual jobs being saved or created. When that information comes in, he said, it is “going to be part of our estimate.” Bernstein said there are “3,000 construction projects that are out there in the economy underway,” but he said he couldn’t be sure how many projects have actually begun. “It’s such a moving target,” he said. The administration this week said that $116.1 billion in stimulus money has been made available for spending, but that only $31.1 billion had actually been spent. On Wednesday, Biden submitted a report entitled “100 Days, 100 Projects,” touting the stimulus act’s successes.  But not all of those projects have actually begun, and at least some of the descriptions of projects seem overhyped, as ABC’s Jake Tapper reports. Click HERE to see our full interview with Jared Bernstein. We also chatted with Politico’s Jonathan Martin about the Supreme Court battle (or lack thereof), and the continuing controversy surrounding Sen. Roland Burris, D-Ill. Click HERE to see the interview with Jonathan Martin.

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