EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON D.C. 20503
FOR IMMEDIATE RELEASE: July 8, 2009
Contact: OMB Communications, 202-395-7254
Opening Statement of OMB Deputy Director Rob Nabors
House of Representatives Committee on Government Oversight and Reform
Washington, DC — Chairman Towns, Ranking Member Issa, Members of the Committee, I appreciate the opportunity to speak with you today about the status of our economic recovery and, more particularly, the Recovery Act’s role in restoring sustainable economic growth to our country.
To understand where we are, it is important to recognize how dangerous a path our economy was on just a few months ago. We are working to come out of the worst economic crisis since the Great Depression. For the fourth quarter of 2008, the United States experienced a negative growth rate of 6.3 percent, the worst since the recession of 1982. Employment fell in every month of 2008. The economy has lost a record 5.7 million jobs over the past year and 6.5 million since the recession began in December 2007.
After a long and unprecedented boom, housing prices have fallen 11 percent since their peak in April 2007, and, over the same period, residential investment has fallen by more than 40 percent.
$9.8 trillion of wealth has been lost in the market. The financial crisis has choked off lending, contributing to further economic decline. And some of our most prominent businesses have closed, merged, or been forced to take drastic steps to stay afloat.
In January and February, when Congress and the President worked in concert to approve the Recovery Act, all of us knew the economic situation was bad; none of us anticipated just how weak the economy truly was.
The financial meltdown contributed mightily to this situation, but so did deficiencies in the foundations of economic growth: infrastructure, health care, education, and clean energy.
When we have failing drinking water systems, crumbling roads and highways, inland waterways that cannot handle today’s capacity, sub-standard or non-existent broadband service, bridges that are graded as dangerous for travel, wastewater treatment plants in poor condition, schools that are overcrowded and falling apart, thousands of dams labeled as high-hazard or unsafe – the picture is clear. While these deficiencies are not the only cause of the economic problems we face, it is a significant contributing factor. It places substantial strain on state and local governments and inhibits the ability of businesses to compete.
From the moment he was elected, the President has put the economy front and center. Working with Congress, the Administration has stabilized the financial markets and started to see stabilization on housing. We are slowing the economic freefall. As a nation, we are moving from a long period of economic slowdown to a time of new industry, opportunity, and innovation. The Recovery Act is an important part of that effort.
The Recovery Act is designed to help millions of families weather this downturn, create new jobs, and spark the engines of long-term growth.
It’s a work in progress, but it’s steady progress. Just this month, eight days into July, the Department of Education is helping states with their increasing budgetary pressures by accelerating more than $2.7 billion in Recovery Act funds well ahead of schedule. The Administration opened competition on more than $15 billion in high-speed rail, smart grid, and broadband programs. All 50 states obligated at least half of their highway funds before the July 1 deadline. As a result, right now, there are more than 1,900 highway projects underway across the country.
Also this month, the Department of Energy moved forward with more than $460 million for cutting-edge emission-reduction projects that will be central to the nation’s innovative clean-energy future. The Interior Department pressed forward with another $134 million for critical water reclamation projects in the West. The Department of Veterans Affairs completed $500 million in Recovery payments to approximately 1.9 million Veterans and beneficiaries to help them keep pace with their bills.
Overall, as of June 30, more than 20,000 Recovery Act projects have been approved. Almost $201 billion of all Recovery Act funding has been obligated or distributed. This includes $157.7 billion of obligations and $43.2 billion of tax relief.
These are many of the things on which the Recovery Act focuses.
More importantly, the Recovery Act invests in people. Within a few weeks of the Act becoming law, we implemented the broadest tax cut in history. The Recovery Act provides $288 billion in tax cuts and incentives to families and businesses. We extended and expanded unemployment benefits and medical coverage for people who are still looking for work. We have modified the first-time homebuyers’ tax credit so it can be used for a down payment or closing costs, helping to stabilize the housing market. To date, nearly 1.1 million new homeowners have claimed the $8,000 credit.
And the Recovery Act does more, focusing on improving the skills and abilities of the American people so we can build better products more efficiently and effectively. That means improved schools and teachers, specialized training for cutting-edge industries, and financial help for those men and women ready to start their own business.
The American people know that getting out of this economic hole will not be easy or quick. And they also have every right to know that these investments are making a difference. To that end, the Administration has put forward an unprecedented transparency effort that is reliable, accurate, and open. This has never been done before at the federal level. Beginning in October, as Congress mandated, the American people will be able to see how dollars are being spent at their local community: Who is getting the funds? For what project? When will the project be finished? And what is the benefit to the community?
The Recovery Accountability and Transparency Board, led by Earl Devaney, has the responsibility to act as the people’s auditor. OMB is working in full partnership with the Board to make sure that dollars are invested smartly and to stop waste, fraud, and abuse. Our mission is simple: fund projects that can make a difference today with new jobs and opportunities, while building strength for the economy for many years to come.
Is this easy? No.
Is our work complete? Not even close.
But we are on the right path.
Last month, the economy lost 467,000 jobs. Let’s be very clear about this: 467,000 jobs lost in a month is 467,000 too many. But it is also much slower than the pace we saw in the first quarter, when the average monthly job loss was 691,000. We are making progress, but we still have a long way to go. A nine-and-a-half percent unemployment rate simply is not acceptable. Neither are the daily struggles and hard decisions for millions of families.
Without question, Congress and the President are not satisfied -- and will not be satisfied -- until we are adding jobs again, providing Americans with the dignity of a job and a dependable income. That’s why we will continue to do whatever is necessary to put Americans back to work.
Mr. Chairman, we know that, in times of past economic crisis, the government did not make the solutions. Rather, government gave the American people the tools to fix what was broken. Government catalyzed private investment and innovation. Government energized people and opportunity. That is what we are working to accomplish again today.I thank you, again, for this opportunity, and I look forward to answering any questions you might have.