Stimulus: One year later





NEW YORK (CNNMoney.com) -- Wednesday marks the one-year anniversary of the stimulus bill, and from here on out the pace of spending should pick up, according to administration officials.

The federal government expects to spend more money on projects -- such as high-speed rail -- rather than payments to states and individuals, according to Vice President Joe Biden, who released his annual stimulus progress report Wednesday.

On Feb. 17, 2009, Congress passed a $787 billion economic stimulus program -- the largest in the nation's history -- and it has elicited both praise and scorn.

The White House is mounting an all-out campaign this week to tout the benefits of the Recovery Act, saying the package has largely lived up to its promises of stemming job losses and boosting economic growth. Administration officials are touring the nation to highlight stimulus-funded work and detailing where the money has been spent in the past 12 months.

Through the end of January, some $334 billion in spending has been approved, of which $179 billion has actually left federal coffers. Another $119 billion has gone to tax cuts.

"Our work is far from over, but we have rescued this economy from the worst of this crisis," said President Obama on Wednesday, though he noted many Americans may not feel the Recovery Act's impact because they remain unemployed.

Detractors, however, counter that stimulus has been a waste of money and produced few jobs. And few Americans believe the stimulus program is really working. Only 36% of respondents said the Recovery Act is helping the economy, according to a recent CNN poll.

"In the first year of the trillion-dollar stimulus, Americans have lost millions of jobs, the unemployment rate continues to hover near 10%, the deficit continues to soar and we're inundated with stories of waste, fraud and abuse," said Senate Minority Leader Mitch McConnell, R-Ky. "This was not the plan Americans asked for or the results they were promised."

Shifting the mix

In the coming months, the pace and mix of spending will change, senior administration officials said. Until this point, the bulk of the spending has been on tax relief and direct aid -- such as unemployment benefits -- in order to stop the economic freefall.

Going forward, the government will distribute $32 billion in Recovery Act funds per month, up from an average $27 billion a month over the past year, according to Biden's annual report.

To date, only $31 billion has been spent on projects -- such as infrastructure, high-speed rail, broadband and health technology. But in the second phase of the act, the amount of money going to these initiatives will more than double to $7 billion a month as the work ramps up. The administration views this spending as setting the stage for a lasting expansion.

"Many projects are just now getting underway, and will be creating jobs throughout 2010 and beyond," said Biden, noting that the administration will announce an additional $1.5 billion of surface transportation projects Wednesday. "Work on many Recovery Act projects will accelerate in the spring and summer months as weather conditions permit work on roads, bridges, water projects, and Superfund site clean ups."

Payments to states and individuals will fall to $11 billion, from $14 billion, per month. Much of this spending -- such as Medicaid funding and additional unemployment benefits -- was meant to stabilize the economy during the recession.

The administration will reach its goal to disburse 70% of the Recovery Act funds, or $551 billion, by Sept. 30, senior administration officials said.

The Congressional Budget Office recently hiked the cost estimate of the Recovery Act to $862 billion, though the administration still uses the original $787 billion figure.

Shortcomings highlighted

Republicans, however, were quick to point out stimulus' shortcomings, stressing the nation's stubbornly high unemployment rate, which stands at 9.7%.

"Taxpayers aren't getting their money's worth from the trillion-dollar 'stimulus' and struggling families and small businesses are rightly asking, 'Where are the jobs?'," said Rep. John Boehner, R-Ohio, the House's top Republican.

Republican Whip Rep. Eric Cantor, R-Va., said states have lost a total of 2.9 million jobs between the bill's enactment last February through December, though the administration projected stimulus would save or create 3.5 million positions.

In the final quarter of last year, the Recovery Act funded 595,263 direct jobs, according to Recovery.gov. The figure is based on about 160,000 reports from state, local and corporate recipients who have spent $57.9 billion in stimulus money.

It does not tally jobs created indirectly through companies buying supplies for stimulus projects, people spending their tax cuts, increased unemployment benefits and the like.

In total, the economic stimulus program has boosted employment by 1.5 million to 2 million jobs, the president's chief economic adviser said in mid-January. That number is derived from a mathematical formula based on how much money has flowed out the federal door.

A week ago, the president's top economic adviser praised the Recovery Act, calling it the "great unsung hero of the past year." Council of Economic Advisers Chair Christina Romer reiterated that the program has funded up to 2 million jobs and helped turn the economy around.