On Lou Dobbs Tonight, Ed Henry reported that a "study" from the Congressional Budget Office "was suggesting that a lot of the spending proposals in the original [economic stimulus] plan would not really take effect for a couple of years, so it wouldn't clearly help create jobs in the first two years of the president's administration." However, the director of the Office of Management and Budget stated in a letter that his agency's "analysis indicates that at least 75 percent of the overall package ... will be spent over the next year and a half" -- which Henry did not report.
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On the January 23 edition of CNN's Lou Dobbs Tonight, White House correspondent Ed Henry referred to a "study" from the Congressional Budget Office that Henry claimed "showed" that President Obama's economic stimulus package "may not really stimulate the economy." Henry later asserted that the study "was suggesting that a lot of the spending proposals in the original plan would not really take effect for a couple of years, so it wouldn't clearly help create jobs in the first two years of the president's administration," a claim Republicans have promoted recently in opposing the plan. However, Henry provided no response from the CBO or the Democratic leadership. In a January 22 letter, Office of Management and Budget director Peter Orszag -- who formerly headed the CBO -- refuted the Republican claim based on the purported study that most of the money would not be spent until after 2010. Orszag stated that the CBO "analysis, however, did not assess the overall package." He added: "Our analysis indicates that at least 75 percent of the overall package (including its tax component and the other spending provisions that were not analyzed by the Congressional Budget Office) will be spent over the next year and a half."
As Media Matters for America noted, Democratic leaders responded to the purported CBO analysis by noting that the CBO ignored faster-moving provisions in the stimulus, providing a misleading impression of the plan's effects. A January 20 Washington Post article reported: "House Democrats and administration officials said that by leaving out the tax cuts and spending on the poor, the CBO report focuses on the slowest-spending parts of the proposal. Even there, small changes to the measure could have a huge effect, they said." Similarly, a January 21 Dow Jones article (subscription required) reported that "Senate Majority Leader Harry Reid, D-Nev., told reporters that Senate Appropriations Chairman Daniel K. Inouye, D-Hawaii, called the report 'wrong' and 'misleading.' According to Reid, Inouye said that 'because of the financial markets, the economic problems we've had, the money's going to go out much faster than that.' "
From the January 23 edition of CNN's Lou Dobbs Tonight:
LOU DOBBS (host): Good evening, everybody. President Obama today declared his massive economic stimulus package is on target, as he put it, to be passed by Congress by mid-February. The president appealed to congressional Republicans to support that economic stimulus package, which will cost taxpayers an estimated $1 trillion.
After a meeting at the White House, Republican leaders declared the package to be too expensive and to take too long to have any effect. Those Republicans are demanding much deeper tax cuts than the president's, and Ed Henry now reports from the White House with the very latest for us. Ed.
HENRY: Well, good evening, Lou. The president wants urgent action because his aides are saying that this financial crisis could get worse before it gets better. So that's why for the first time in his presidency he called in leaders from both parties to sit down and try to hash this out, trying to push them on this $825 billion economic recovery plan.
And what was most interesting is that this was the president's most optimistic comments yet about that package, saying that despite the differences the two parties have over those tax cuts you mentioned -- Republicans saying they want more of them focused for small businesses, for example, the concerns Republicans have for the growing price tag of this plan. Nevertheless, Mr. Obama said he is confident that it will be passed and signed into law by mid-February.
OBAMA [video clip]: I know that it is a heavy lift to do something as substantial as we're doing right now. I recognize that there are still some differences around the table and between the administration and members of Congress about particular details on the plan. But what I think unifies this group is a recognition that we are experiencing a unprecedented, perhaps, economic crisis that has to be dealt with, and dealt with rapidly.
HENRY: Despite those comments, Republicans are still expressing some concerns and skepticism, pointing to a Congressional Budget Office study earlier this week that showed that some of the money in this stimulus plan may not really stimulate the economy. Two hundred million dollars, for example, for the national mall, some of it to buy it some new grass. Republicans are wondering if that's really going to create a lot of new jobs. Part of the reason why the president next week is now planning to go up to Capitol Hill for the first time as president and reach out and meet behind closed doors with the Republican members of Congress to try to convince them to sign onto this plan, Lou.
DOBBS: Well, whether this be the president's plan or the congressional leadership or a combination thereof or a bipartisan plan, a couple of things if we may, Ed. One, how many jobs will it create, and by what time?
HENRY: The president has vowed that this plan would create 3 to 4 million new jobs during his first two years in office. So that's a standard we're going to have to hold him to. And that's why Republicans are raising concerns that what they've seen so far from the Democratic leaders in Congress -- they're skeptical that it will really create that many jobs, Lou.
DOBBS: That's more than $200,000 a job in an economy that generates just about one and a half million jobs a year anyway. So it's hard to understand the mathematics there.
HENRY: Well, part of what they point to here at the White House is the fact that a large share of it will be infrastructure money. They think it will create a lot of construction jobs, for example. They've also talked about school construction, which they think will have two effects: creating jobs to rebuild those public schools, but also to try and help make schools better obviously for education for long-term benefit. But obviously there's a lot of skepticism, Lou.
DOBBS: Yeah, I'm less skeptical than I am concerned that we don't clearly understand the impact of the president's proposal, namely, over what period of time it will take effect. Because obviously public investment in infrastructure is a remarkably sound public policy. It is not one, however, that can be carried out in a timely fashion to reverse a recession, or at least never has been in history. At what point will we be out of this recession based on the addition of $825 billion in federal spending?
HENRY: Well, that was another question raised in this Congressional Budget Office study. It was suggesting that a lot of the spending proposals in the original plan would not really take effect for a couple of years, so it wouldn't clearly help create jobs in the first two years of the president's administration. That's part of the reason why they've gone back to the drawing board. They're going through many iterations of this. The White House today -- spokesman Robert Gibbs trying to say that basically this plan has changed a lot already since the CBO did its study. But the problem is, it's going to keep changing and changing as Congress keeps poking away at it, and it's really unclear what the final product is going to be, Lou.
DOBBS: Well, it's clear that there is a remarkable need for a high order of specificity, irrespective of the partisan interests here it would seem. Thank you, Ed Henry, as always, for keeping us on top of these issues.