Video: Obama: Stimulus plan staved off catastrophe

  1. Closed captioning of: Obama: Stimulus plan staved off catastrophe

    >> maceda, thanks.

    >>> now we switch our coverage back to washington tonight where one year ago today president barack obama signed the economic stimulus package into law, a plan he said was crucial to saving the economy and jobs. today he and democrats on capitol hill defended that record, while many others have a different view. our report tonight from nbc's lisa myers .

    >> reporter: today the president said that the much-maligned stimulus package staved off economic catastrophe.

    >> one year later, it is largely thanks to the recovery act that a second depression is no longer a possibility.

    >> reporter: many economists agree that the $787 billion package of infrastructure spending, tax cuts and aid to states has created jobs and helped pull the economy out of a deep recession. three economic research firms estimate that 1.6 to 1.8 million jobs have been created so far, with more gains projected this year. and painful job losses have slowed dramatically. last january the economy was hemorrhaging jobs at a rate of 780,000 a month. that slowed to 20,000 last month. economist mark zandy who advises republicans and democrats says the stimulus was absolutely vital, but not perfect.

    >> the stimulus was effective. it helped the economy. we are out of recession into recovery, but it wasn't as effective as it could have been. bang for the buck was not as large as it should have been.

    >> reporter: the white house forecasted the stimulus would keep unemployment from going above 8%. instead, the jobless rate soared to 10.2% last fall and stood at 9.7% last month. economist kevin hassett says the costly package hurts in the long run.

    >> the administration decided to give us a sugar high last year rather than fix something that was broken. the problem is that we still have to fix the broken things and now we don't have any money.

    >> reporter: critics ridiculed some projects as wasteful. $1.6 million for free water taxi rides. $1 million to improve security on dinner cruises in eight cities. and studies about how honeybees learn and the sex drive of rats on hard drugs. the president acknowledged that despite progress, this doesn't feel like a recovery to millions of americans, so he is pushing to spend another $100 billion this year to try to create more jobs soon. lisa myers , nbc news, washington.

    >>> still on the economy, a

updated 2/17/2010 4:40:52 PM ET 2010-02-17T21:40:52

President Barack Obama hailed Wednesday's one-year-old economic stimulus law as a solid accomplishment that staved off another severe economic depression and kept up to 2 million Americans on the job.

Still, with millions still out of work and losing patience, Obama acknowledged that to them, "It doesn't yet feel like much of a recovery."

The Obama administration has been feeling considerable political pressure of late, in part because of the stunning upset of its favored candidate in the special election to fill the Senate seat vacated by the late Sen. Edward Kennedy, a Democrat who held the post for decades. Earlier this week, a leading Senate Democratic moderate, Indiana's Evan Bayh, joined an increasing number of lawmakers who have announced they will be leaving Congress. This has come amid rising public anger over joblessness, high deficits and Washington partisanship.

These developments have energized Republicans ahead of the November elections in which one-third of the 100-member Senate seats are at stake. Some Republicans think Americans are so disappointed with Washington lawmakers they might be able to win control of the Senate from the Democrats, who with their allies have a 59 to 41 majority.

Marking the anniversary of the $787 billion American Recovery and Reinvestment Act, Obama aimed his message at people skeptical about the expensive relief measure and Republican lawmakers who voted against it and continue to hammer him about it.

To the public, Obama explained, as he has many times before, that the stimulus plan was composed of tax cuts for most Americans along with help for state governments, extended social service benefits and huge investments in energy, education and infrastructure.

"One year later, it is largely thanks to the recovery act that a second depression is no longer a possibility," Obama said, alluding to the severe ecnomic downturn in the U.S. in the 1930s known as the Great Depression.

To his Republican critics, who say the bill was a costly, debt-financed blunder that has not delivered on the promise of job creation, Obama challenged them to take up the case with people who have stayed employed or have found help solely because he and the Democratic-run Congress acted.

Obama even delighted in recounting a section of his State of the Union address last month in which he talked of the tax cuts from the stimulus plan and watched Republican lawmakers fail to applaud the idea.

"They were all kind of squirming in their seats ... It was interesting to watch," Obama said.

Vice President Joe Biden, who heads implementation of the stimulus package for Obama, asserted that taxpayers have "gotten their money's worth" out of the $787 billion stimulus program that Congress passed during the depths of the recession.

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Video: Is Congress broken beyond repair? In a broadcast interview, the vice president, like Obama, defended the program against accusations by Republicans critics that it has not been the job-manufacturing machine the administration promised to the American people.

He argued that money invested in both private and public-sector initiatives, and said, "I don't think they realize it." Biden said the program was designed to be implemented in two stages, saying "we've only been halfway through the act."

Christina Romer, who heads the White House Council of Economic Advisers, said in a separate interview that one component of the stimulus program had worked especially well. "State fiscal relief really has kept hundreds of thousands of teachers and firefighters and first responders on the job," she said.

"We have seen productivity surge," Romer said. "And that, at one level, is a good sign out the economy. But absolutely, we've got to translate GDP growth into employment growth. Right now, the employment numbers look basically stable. We think we're going to see positive job growth by spring."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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