Jobs & The Economy: Putting America Back to Work
“It is our generation’s task, to reignite the true engine of America’s economic growth —
a rising, thriving middle class,”
The Recovery Act
President Obama took office in the middle of the worst economic crisis since the Great Depression, at a time the economy was losing over 700,000 jobs a month and in the midst of what we now know was the worst 6-month period for GDP growth in over 60 years. To respond to the crisis, the President took immediate, bold, and effective action, signing the American Recovery and Reinvestment Act into law less than a month after taking office, helping to create jobs and make the investments we need to out-innovate, out-educate and out-build the competition so we can create true economic security for the middle class.
And despite claims to the contrary, these efforts were successful in preventing another Depression, and returning our economy to growth. As of July 2013, the economy has now added private sector jobs for 40 consecutive months, and a total of 7.2 million jobs has been added over that period.
A range of independent estimates have confirmed the effectiveness of the President’s actions. According to the non-partisan Congressional Budget Office, the Recovery Act supported as many as 3.5 million jobs across the country by the end of last year. Princeton’s Alan Blinder and Moody’s Chief Economist Mark Zandi estimate that without the financial interventions and Recovery Act, we would have entered another Depression - there would have been 8.5 million jobs less in 2010, and GDP would have been about 6.5 percent lower.
Through the Recovery Act, which was enacted on February 17, 2009, the President helped deliver crucial support to the economy in three ways.
The single largest part of the Act — more than one-third of it — was tax cuts. Ninety-five percent of working Americans have seen their taxes go down as a result of the Act. The second-largest part — just under a third — was direct relief to state governments and individuals. This funding helped state governments avoid laying off teachers, firefighters and police officers and prevented states’ budget gaps from growing wider. On an individual level, the Act ensured those hardest hit by the recession got extended unemployment insurance, health coverage and food assistance.
The remaining third of the Recovery Act financed the largest investment in roads since the creation of the Interstate Highway system; construction projects at military bases, ports, bridges and tunnels; long overdue Superfund cleanups; clean energy projects; improvements in outdated rural water systems; upgrades to overburdened mass transit and rail systems and much more.
To speed economic recovery and create jobs, every major target of the Recovery Act was reached on time or ahead of schedule. The President’s goal of paying out 70 percent of all Recovery Act funds by September 30, 2010 was a particularly important milestone. In reaching this goal, the Recovery Act put billions of dollars into people’s hands and injected much needed funds into the economy in less than two years.
Effective implementation of the Recovery Act depended on funding projects that would put every dollar to good use. The Recovery Act did not include earmarks. Instead of letting politics dictate which projects were picked, a competitive, merit-based approach that rewarded innovation and effectiveness was used to make decisions.
In addition, many Recovery Act programs attracted additional funding from outside the Federal Government in order to promote economic growth. Overall, about $100 billion in funding will ultimately be matched by more than $280 billion in additional investment from outside the Federal Government, much of it from the private sector. This provided desperately needed money to projects and businesses that otherwise might not have been funded.
And the President’s efforts did not end with the Recovery Act. The President remains focused on jobs even while undertaking a historic reform of health insurance, a large reform of support for higher education, the most sweeping financial reforms since the Great Depression, and pushing for clean energy legislation. After the Recovery Act, the President signed at least six more important jobs bills into law in the following two years: incentives to encourage motor vehicle purchases in the summer of 2009, an expansion of the homebuyer credit and unemployment insurance in the fall of 2009, business hiring incentives in the beginning of 2010, a teachers jobs bill in the summer of 2010, a small business tax cuts and credit expansion bill in the fall of 2010, the tax agreement in December 2011 that included historic tax cuts for American families and businesses, as well as the Payroll Tax Cut.