One Year Later: The $862 Billon Stimulus Bill Still Sucks!

One year ago today, President Barack Obama signed the Democrats’ $787 billion stimulus bill into law. Well, actually, it costs $862 billion, since the Congressional Budget Office revised its estimates last month. The cost surpasses $1 trillion when interest payments on the debt taken out to pay for the legislation are included.

When the bill was signed, the administration made expansive promises of its effects. Christina Romer, chair of the President’s Council of Economic Advisors made a representative claim, saying on Feb. 12, 2009, “From the very beginning, the president has said as his goal that he wanted to be sure it created between three and four million jobs. And we absolutely think it’s going to do that.” Vice President Joe Biden said within 18 months, the bill would “create 3.5 million jobs.” Larry Summers, director of the National Economic Council, said, “Yeah, the plan will create 3 million to 4 million jobs . . . .” And Senate Majority Leader Harry Reid told reporters, “This bill creates 3.5 million jobs.”

But even the most optimistic job estimates from the administration claim they’ve created 2 million jobs, as Joe Biden does in an op-ed for USA Today. Of course, these numbers are questionable, given extensive reporting on the Obama administration overstating the number of jobs the stimulus created. Indeed, back in October, the AP found “[a]n early progress report on President Barack Obama’s economic recovery plan overstate[d] by thousands the number of jobs created or saved through the stimulus program.” And ABC News famously discovered that the administration was reporting stimulus money was creating jobs in nonexistent congressional districts and zip codes.

Another key promise from the Obama administration last year was that the stimulus bill would hold down unemployment. Romer famously produced a graph showing that with a stimulus bill, unemployment would not exceed 8% and would be around 7.6% today. Last year, President Obama wrote, “If nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits.” And Press Secretary Robert Gibbs told CBS, “[T]he economic team believes that this bill will help us stay away from those double-digit economic unemployment numbers.”

Yet for much of the fall, unemployment was 10%. And unemployment today stands at 9.7%, not 7.6%.

Further, new reports continually crop up of stimulus money failing to reach those places where it’s needed most. Back in October, The New York Times reported, “Businesses with federal stimulus contracts have created few jobs in states with the worst unemployment rates, according to data released Thursday by the federal government.”

On top of that, throughout the year, reports surfaced of stimulus dollars financing dubious and even wasteful projects. A list of just 15 of the worst includes things like $390,000 to study malt liquor and marijuana consumption, $219,000 to study the sex lives of female college freshmen, $3.4 million for a turtle tunnel in Florida, $54 million in stimulus funds used for the Napa Valley Wine Train, and $30 million for a spring training baseball complex for Major League teams.

Senate Republican Leader Mitch McConnell summed up the problems, saying this morning, “In the first year of the trillion-dollar stimulus, Americans have lost millions of jobs, the unemployment rate continues to hover near 10%, the deficit continues to soar and we’re inundated with stories of waste, fraud and abuse. This was not the plan Americans asked for or the results they were promised.”

 Representative Mike Pence, Chairman of the House Republican Conference, summarized the opinion of House Republicans,"One year later, one thing is clear: the stimulus bill has failed. One year later, not one net job has been created as unemployment rose from 7.6 percent to nearly 10 percent nationwide. Mr. President, millions of Americans are asking, 'where are the jobs?' It is time for Washington to take a new approach to get this economy moving again based on time-honored solutions: fiscal discipline in Washington, D.C. and immediate tax relief for working families, small businesses and family farms. Let's put American families first, set aside the big government schemes on health care and energy and take decisive action to get this economy growing again."

Given everything Americans have seen about the stimulus bill over the past year, it’s little wonder that last week’s New York Times/CBS News poll found that only 6% of Americans think stimulus bill has created jobs. And for the first time, more people now believe that the stimulus hasn’t—and won’t—create jobs, than believe it has or ever will.

The stimulus has failed to live up to the promises Democrats in Congress and the Obama administration made when they sold it to Americans a year ago, and the public has clearly recognized this. When the administration makes promises about its policies on health care and energy taxes, Americans would do well to keep the results of the stimulus in mind.  In Summary: One Year Later: the $862 Billion Stimulus Bill Still Sucks!

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