Despite the skepticism about the effectiveness of the five-year-old stimulus act, Vice President Joe Biden said Wednesday the money should have been spent with or without a recession.
“Folks, these are the kind of investments we should do no matter what, even if we had never gone through recession,” Biden said.
When President Barack Obama signed the $770-billion bill on Feb. 17, 2009 in Denver, he said it was “the beginning of the end” of America’s economic troubles. The cost of the stimulus has since ballooned from $770 billion to $830 billion.
Five years and two days later, it was Vice President Joe Biden, not Obama, marking the anniversary of the American Recovery and Reinvestment Act at America’s Central Port at Grant City, Ill. Obama is in Mexico meeting with his Mexican and Canadian counterparts.
“It’s been five years since this god-awful recession, the worst recession since the Great Depression,” Biden said. “The only thing that kept it from being a great depression is – as most economists now agree – is the bold decision by the president to invest in recovery.”
In January 2009, the administration projected that passing the bill would bring unemployment to 5 percent by the end of 2013 and ensure that it didn’t surpass 8 percent.
Unemployment was at 8 and 9 percent for much of Obama’s first term. It reached 6.7 percent at the end of 2013 and 6.6 percent in January. The Congressional Budget Office projected earlier this month that unemployment would be roughly the same by the end of 2014, and will drop to 5.8 percent by 2017.
Still, Biden cited a White House report released Monday that hailed the effort as a success.
“I’m proud the administration released its final report to Congress this week detailing the most successful economic recovery legislation since the New Deal era,” Biden said. “The report notes that the recovery act saved or created 1.6 million a year between 2010 and 2012. It also helped save us from a depression.”
The White House report also stated that the recovery act and “subsequent fiscal measures” resulted in $689 billion in tax relief for lower income households. Moreover, the recovery act “will have a positive impact on long run growth, raising the economy’s potential output and ultimately offsetting much of the Act’s initial cost.”
The White House report said the stimulus improved 40,000 miles of road, 2,700 bridges and brought 693 drinking water systems into compliance with the Clean Water Act. It also helped launch the Race to the Top education grant program.
Biden called the recovery act the biggest public works project since the interstate highway was built.
“There is no way the states or the private sector could complete infrastructure projects like this,” Biden said. “It’s not all the federal government, but without it providing the seed money, there is no reasonable way it could have been done.”
Though the legislation was sold largely as an infrastructure program, employment for construction has even declined by more than 500,000 workers, according to the Bureau of Labor Statics. Just 10 percent of the stimulus money went to infrastructure, according to the Wall Street Journal.
In June 2011, the nonpartisan FactCheck.org stated: “CBO’s high estimate is still short of the 3.5 million jobs that Obama had said would be created by the end of 2010, so it’s accurate to say the stimulus has failed to live up to initial expectations.”
Obama made Biden the point man for preventing waste, fraud and abuse in the stimulus.
Stimulus money went to boondoggles such as a $535-million loan to the now-bankrupt solar power plant Solyndra, and $250 million for the A123 car battery company that also went bankrupt. Both companies were politically connected.
The Republican National Committee marked the anniversary by sarcastically declaring: “Even ‘Sheriff Joe’ couldn’t stop wasteful stimulus spending.’”
Among Energy Department spending alone, the department’s Officie of Inspector General launched more than 100 investigations into how stimulus money was spent on projects. Meanwhile, the Department of Education inspector general found that states were frequently misusing grants to schools.
Biden minimized problems, saying a congressional probe found “less than 1 percent of recovery act investments were found to be fraudulent and wasteful. No other program in the history of the United States of America over $800 billion can meet that test. And now it’s the standard for all of our programs.”
Follow Fred Lucas (@FredVLucas3) on Twitter