Obama speeds up stimulus spending

By AFP

July 15, 2010 Updated Jun 8, 2009 at 3:01 PM CDT

Acknowledging that the US economy remains in a "very deep recession," President Barack Obama announced plans Monday to accelerate stimulus spending to save or create 600,000 jobs over the next three months.

Obama's candid assessment of the state of the economy followed the loss of another 345,000 jobs in May, which pushed the US unemployment rate to 9.4 percent, a 26-year high.

"It's a reminder that we're still in the middle of a very deep recession that was years in the making and that's going to take a considerable amount of time for us to pull out of," said before meeting with his cabinet.

Obama said the job losses were less than expected, a sign that his 787 billion dollar economic stimulus plan was moving in "the right direction," but not quickly enough to ward off concerns of a "self-reinforcing" downward spiral.

"Our whole task here with the recovery act is to reverse that negative cycle into a positive cycle and it's going to take some work," he said.

Obama said the government was ready to accelerate stimulus spending with the goal of creating of saving 600,000 jobs over the next 100 days through summer youth programs, school and public works projects.

In a statement, the White House said the 600,000 jobs represented "four times the number created or saved in the first 100 days" since the plan was signed into law on February 17 -- approximately 150,000 jobs.

So far, 135 billion dollars have already been obligated under the stimulus plan, which Obama has said would create or save more than three million jobs over two years, a number critics have charged is difficult to verify.

A new Gallup poll released Monday showed that while 67 percent of Americans viewed Obama favorably, only 45 percent approved of his handling of federal spending -- with a 51 percent majority disapproving.

The 10 new projects announced included improvements on 98 airports and over 1,500 highways, federal funding for 135,000 education jobs and maintenance work at 359 military bases and other facilities.

"The only measure of progress is whether or not the American people are seeing some progress in their own lives," Obama said.

"And so although we've seen some stabilizing in the financial markets and credit spreads have gone down, we're seeing a reduction in the fear that gripped the market just a few months ago," he said.

Obama's plans have been criticized by some economists, who accuse him of increasing an already record public deficit, and by his Republican foes, who doubt his plans will effectively turn the tide on the economic slump.

"I'm very skeptical that the spending binge that we're on is going to produce much good and, even if it does, any time soon," Politico.com quoted Republican Senate Minority Leader Mitch McConnell as saying.

White House economic adviser Austan Goolsbee warned that the unemployment rate was likely to continue to rise as more stimulus projects receive federal funding.

"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," he told "Fox News Sunday."

"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."

Under the plans detailed Monday, federal agencies would release billions of dollars to help fund projects to shore up the ailing job market.

Some 1,129 health centers would expand their services to about 300,000 patients, while the Interior Department would begin work on 107 national parks, the Labor Department would create 125,000 summer youth jobs and improvements would be undertaken at 90 veterans medical centers.

About 5,000 law enforcement officers would also keep their jobs or be hired, while the Department of Agriculture would start 200 new waste and water systems in rural areas and the Environmental Protection Agency (EPA) would begin or accelerate cleanup at 20 hazardous waste sites.

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