U.S. stimulus gave large jobs boost, CBO says

MSNBC Politics, Wednesday, November 24, 2010, 4:35am (PST)

By Reuters

WASHINGTON - The massive U.S. stimulus package, widely viewed by voters to be ineffective, put 1.4 million to 3.6 million people to work between July and September, the nonpartisan Congressional Budget Office said Wednesday.

The American Recovery and Reinvestment Act also boosted national output by between 1.4 percent and 4.1 percent during that period, CBO said in its latest estimate.

CBO's estimates have consistently shown that the $814 billion package of tax cuts, state aid, construction spending and enhanced safety-net provisions has blunted the impact of the worst U.S. recession since the 1930s.

But it has failed to prevent the unemployment rate from rising above 8 percent, as the Obama administration promised when it was crafted in 2009.

The unemployment rate, currently at 9.6 percent, would have been between 10.4 percent and 11.6 percent without the Recovery Act, CBO said.

Voters by wide margins say the stimulus has been ineffective, and they handed a big victory to the Republicans who opposed it in the Nov. 2 elections.

Republicans have proposed rescinding the $12 billion that remains unspent when they take control of the House of Representatives in January.

The Recovery Act has already had its greatest impact on the economy and its effects will continue to wane into 2011, CBO said.