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Cabinet to discuss stimulus spending aimed at jobs

world Updated: Jun 08, 2009 11:27 IST

President Barack Obama is ramping up his stimulus program this week even as his advisers are ramping down expectations about when the massive $787 billion spending plan will have an impact on job creation.

Obama and Vice President Joe Biden are scheduled to meet Monday with Cabinet members to discuss specific plans over the next several months for spending stimulus money. Obama wants to make sure agencies remain focused on the push to put billions into contracts, programs and grants designed to stimulate the U.S. economy, administration officials said.

The White House meeting comes days after the government reported that the number of unemployed people continues to rise, now at 9.4 percent, the highest in more than 25 years. Hundreds of thousands of Americans continue to lose jobs each month, although fewer were lost last month than expected.

Just how much of an impact Obama’s recovery program had on the pace of job losses is up for debate. His advisers say the stimulus is beginning to work and his Cabinet’s increased focus on recovery efforts this summer will have an even greater effect on the economy.

Republicans remain critical of the stimulus spending, slamming it as a big government program that ultimately will do little for recovery. With only a fraction of the federal money spent thus far, it’s premature to give the stimulus plan credit for economic trends, congressional Republicans said last week.

“I think the economy is just as likely to begin to recover on its own, wholly aside from this, before much of this has an impact. So I’m very skeptical that this massive sort of spending binge that we’ve engaged in is going to have much of an impact,” said Senate Republican Minority Leader Mitch McConnell.

Obama offered his stimulus plan as a way to put people back to work, a promise that 3.5 million jobs would be saved or created. The administration’s predictions that unemployment would rise no higher than 8 percent already have been shattered, leaving Obama’s advisers to caution that job growth takes time, even as recovery spending intensifies.

Federal agencies will release billions of stimulus dollars to states in the coming months. At the same time, the U.S. unemployment rate likely will continue to increase, said Austan Goolsbee, a member of the White House Council of Economic Advisers.

“I don’t think there’s any question it’s going to be a rough patch not just in the immediate term, but for a little bit of time,” Goolsbee said Sunday, “because you’ve got to turn the economy around, and jobs and job growth tend to come after you turn the economy around. So it’s likely going to be a little higher.”

Obama senior adviser David Axelrod argues that the stimulus program is working and points to fewer jobs lost in May than the month before as a hopeful sign of economic recovery. Improvements in unemployment numbers naturally come later, he said.

“It’s going to take some time for these unemployment numbers to turn around, for the momentum to completely stop and turn in the other direction,” Axelrod said Sunday. “It feels as if we’re moving and the stimulus package now is not nearly done, it’s just really at its beginnings.”

Goolsbee spoke on “Fox News Sunday”; Axelrod was interviewed on CNN’s “State of the Union.”