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Stimulus Figures Questioned Amid Call for Economic Team Firings

A leading Republican economist criticized lawmakers Wednesday for trying to hold up a new report from the budget office he used to lead as evidence that the stimulus is working. 

Amid a GOP push for President Obama to fire his economic team, a Congressional Budget Office report said the stimulus package created or saved up to 3.3 million jobs and boosted the gross domestic product by up to 4.5 percent. 

House Speaker Nancy Pelosi pointed to the study Wednesday as proof that Democratic policies were turning the economy around and that millions of people would have been jobless if not for the Recovery Act. 

But Douglas Holtz-Eakin, former CBO director, said the CBO analysis cannot be taken "at face value." 

The CBO report not only gives a wide range for stimulus impact in the second quarter of 2010 -- saying between 1.4 million and 3.3 million jobs were created or saved and economic growth was somewhere between 1.7 percent and 4.5 percent -- the models used are designed to spit out positive figures, he said. 

"This is repackaging previous analysis at the request of Democrats in Congress," he told Fox News. "This is based on a computer model, and with computer models you get out what you put in, and the kinds of models that the CBO uses is one where the stimulus can't fail to work." 

The CBO, in the preface to the latest report, acknowledged that the numbers are based on "evidence from similar policies enacted in the past and on the results of various economic models." 

Though stimulus supporters say the policy kept unemployment from getting distinctly worse, critics say it's ultimately impossible to gauge what would have happened in its absence. 

The CBO gave a similar assessment in its new analysis, saying that while the office has examined "output and employment" data since the stimulus went into effect last year, "those data are not as helpful in determining (its effects) as might be supposed because isolating the effects would require knowing what path the economy would have taken in the absence of the law." 

Holtz-Eakin said the stimulus "had some impact" but did not address the fundamental problem of how to get businesses hiring and expanding. 

House Republican Leader John Boehner, in a speech Tuesday, said President Obama should throw up his hands and start anew on the economy. He called on the president to accept the resignations of Treasury Secretary Tim Geithner, National Economic Council chief Larry Summers and the rest of his economic team. 

Boehner afterward said he's going to raise $50 million for the fall elections. In a fundraising letter for the National Republican Congressional Committee, he repeated his economic team demand and urged supporters to donate to reverse Washington's "government-as-community-organizer" approach. 

The push for an economic team makeover comes amid fresh signs of economic trouble. The Commerce Department reported Wednesday that new home sales fell 12.4 percent in July, the slowest pace on record. That's after existing home sales dove 27.2 percent, according to the National Association of Realtors. 

Vice President Biden, in a separate economic address Tuesday, defended the administration's approach and the stimulus package's role in saving jobs. 

"Nobody anymore argues whether or not there would be 3 million fewer people working today than there are now working but for the Recovery Act. No serious economist is making that argument any longer. The economy has been growing for a full year," Biden said. 

The vice president accused Boehner of having no constructive ideas and pushing the same economic policies that "ran the economy and the middle class literally into the ground." 

Holtz-Eakin, while disputing the stimulus claims, said calls for economic team firings ring "petty" so close to Election Day. He said lawmakers need to focus on job creation. 

"That should be the focus -- not which faces are standing behind the president when he makes his speeches," Holtz-Eakin.