Should They Have Called It The ‘Stabilization’ Act?

Jul 16, 2009 4:38pm

ABC News' Yunji de Nies reports: Turns out the $787 billion "American Recovery and Reinvestment Act" (AARA) was not designed for full economic recovery, but rather to "stabilize" the downturn.  That's the word from White House officials today, who held off-camera briefings with reporters on how the AARA is working so far. "This legislation was designed to cushion the downturn," said White House Press Secretary Robert Gibbs. "That's why we have always talked about this as one function of economic recovery." When pressed about the change in terminology, Gibbs said he was not trying to temper expectations after the fact. "I can probably find 15 or 20 occasions when I said this in the lead up," Gibbs said, explaining that he had always defined the AARA as part of a "multi-legged stool."  Senior Economic Adviser Jared Bernstein said that the economy is improving — or at least getting "less bad."  And he said, that's a good thing. "It's always challenging to explain that things getting less bad is actually a necessary path on the way to them being good, but that's the truth," Bernstein said. "The trends have to go recession, stabilization, recovery. Negative, less negative, positive." He continued, "For many key indicators, not all but many, we're in that second stage, we're in that stabilization stage. And it's a fragile place to be, and it's a good thing that this recovery act is a two year plan." Bernstein said the administration will gauge recovery on the basis of job growth, and noted that even when the recession is formally declared over, their work won't be. "When the business cycle dating committee declared the recession over, from the perspective of American families, from the perspective of our administration, that's not the end," Bernstein said. "We've got to have an economy that's not just growing at a percent or two, but that's growing fast enough to bring working families along with it." The White House says ultimately the AARA will save or create 3.5 million jobs over the course of its two year implementation. Ed DeSeve, senior adviser to the president for Recovery Act Implementation, said so far $183 billion has been obligated (contracted) — of that $64 billion had been outlaid (spent).  DeSeve did not draw a distinction between obligated and outlaid money, as he said obligated funds were already having an effect. DeSeve said that 150,000 jobs had been created or saved so far, and that that number will reach 750,000 by the end of the summer.  Some Republicans have been critical of the AARA, saying that job growth hasn’t been quick enough.  Gibbs defended the pace of spending, saying that the White House is pursuing a path that spends the money as quickly, but also as responsibly as possible — not just to create and save jobs, but also to lay a foundation for future economic growth. "If this was a four month, $787 billion dollar program, fire away. It was designed as a two year plan," he said. When asked about a second stimulus, all three left the possibility open. Gibbs said the president "isn't ruling anything in, he isn’t ruling anything out. If there are things that can be done to spur the economy back to recovery faster, they'll certainly be considered." — Yunji de Nies

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