Obama Pledges to Flood Economy With Stimulus Money

President Obama pledged Monday to pump stimulus money into the economy over the next several months as part of a plan to create or save more than 600,000 jobs this summer, though the administration admits that at least 125,000 of those jobs are temporary.

The administration decided to renew support for the $787 billion recovery plan by accelerating the release of funds from federal agencies. Money will be tapped to open up health centers, increase airport construction, keep teachers and law enforcement employed and make available 125,000 "summer youth jobs."

"I'm not satisfied. We've got more work to do," Obama said from the White House, where he met with his Cabinet to discuss the plan for agencies to pump billions into the economy.

But asked whether these jobs are sustainable, Press Secretary Robert Gibbs conceded student jobs aren't permanent.

"You want me to concede that a summer job won't be here in the fall? Yeah, I concede that," he said.

Bernstein, said that the 125,000 are not being counted as part of the 3.5 million jobs the administration pledged would be created or saved as a result of the recovery bill signed into law in February.

"The 3.5 million jobs are, what economists call, 'full-time equivalent' jobs. So those 125,000 would not count as a full 125,000. Two part-time jobs count as one full-time equivalent job," 
said Jared Bernstein, Vice President Biden's chief economist and economic policy adviser.

The president announced the stepped-up effort following a report Friday that showed the jobless rate hit a staggering 9.4 percent in May, the highest in more than 25 years, 1.4 percent higher than the worst estimates predicted for job loss by the new administration when it promoted the stimulus package in January and February.

"It's a reminder that we're still in the middle of a very deep recession that was years in the making, and it's going to take a considerable amount of time to pull out of," Obama said.

He stressed the fact that the number of jobs lost in May -- 345,000 -- was far less than in prior months, and said the trend signals the economy is "moving in the right direction" and that, "the key is for us to build on the modest progress that has been made, in the months to come."

Obama defended the execution of the stimulus package so far despite the high unemployment figure -- more than 2.7 million jobs have been lost since the start of the year -- arguing that most economists believe the country could have gone "into a tailspin" had the administration done nothing.

"We've done more than ever, faster than ever, more responsibly than ever to get the gears of the economy moving again," Obama said.

Bernstein added that the unemployment rate is 1.5 percent higher than the administration predicted it would be because the fourth quarter of last year contracted far more than was expected.

"And so at the time, our forecast seemed reasonable. Now, looking back, it was clearly too optimistic," Bernstein said.

"The plan was always predicated to have that number be, as Jared said, 1.5 to 2 percentage points less than, in the absence of a recovery," added Gibbs.

Obama spotlighted billions in federal agency spending planned this summer in an announcement designed to draw attention to his stimulus program. Much of the spending he announced already was in the works, including hundreds of maintenance projects at military bases, about 1,600 state road and airport improvements, and federal money states budgeted for 135,000 teachers, principals and school support staff.

Health and Human Services will provide funding for 1,129 health centers to provide expanded service for 300,000 patients; Interior will begin improvements on 107 national parks; Veterans Affairs will start work on 90 medical centers in 38 states; the Justice Department will fund 5,000 law enforcement jobs; the Agriculture Department will begin 200 new rural waste and water system projects; and the Environmental Protection Agency will begin or accelerate the cleanup of 20 Superfund sites.

Obama's promise to create large numbers of jobs quickly drew criticism from opponents and economists who have argued his stimulus plan thus far hasn't delivered.

"Today's announcement is an acknowledgement that the Democrats' trillion-dollar stimulus is not working, and the American people know it," House Minority Leader John Boehner said in a written statement. "These policies are harming middle-class families when they can least afford it, and adding to the massive debt we're passing on to future generations."

"These numbers are a joke," added former Bush White House Deputy Press Secretary Tony Fratto. "The Obama administration is continuing to fabricate job creation projections related to the stimulus. ... Their so-called models would not stand the light of day. They are not seasonally adjusted. They are not based on real data collection. And they don't even change to account for evolving economic data."

"I think these estimates are overly optimistic," said Arpitha Bykere, a senior analyst with RGE Monitor. Bykere said it likely will be later this year before any meaningful job creation occurs from stimulus spending.

The administration had always viewed the summer as a peak for stimulus spending, as better weather permits more public works construction and federal agencies had processed requests from states and others.

Bernstein said the amount of money obligated to projects is about $135 billion of the $499 billion for spending in the package. But he said only about $44 billion has so far been spent so far. He would not predict how much acceleration of disbursements would occur after the next 100 days.

Just how much of an impact Obama's recovery program had on the pace of job losses is up for debate. Obama has claimed as many as 150,000 jobs saved or created by his stimulus plan so far since Congress approved funding for the program in February.

The Associated Press contributed to this report.