White House: Economic Recovery ‘Is Going To Take an Enormous Amount of Time’
(CNSNews.com) - White House Press Secretary Robert Gibbs said at Tuesday's White House press briefing that the economic recovery “is going to take an enormous amount of time,” and when asked to clarify what that meant, he said, “it’s going to take several years.”
President Barack Obama's term of office expires in 28 months, a little more than two years.
Gibbs’s dim projection comes more than 20 months after Obama’s top economic advisers predicted that if Congress enacted the president’s economic stimulus package (which it did in February 2009 at a cost of $787 billion), the national unemployment rate (7.7 percent in January 2009) would drop to 7.0 percent by the fourth quarter of 2010. Today, the national unemployment rate is 9.6 percent, and the Congressional Budget Office is predicting it will remain above 8 percent until 2012.
At Tuesday’s briefing New York Times reporter Sheryl Gay Stolberg asked Gibbs whether the president thinks “people are simply frustrated at the state of the economy, or does he think that they are frustrated with him personally and his handling of it?”
“I don’t doubt that people are frustrated that the pace of our economic recovery has not been faster under the president’s watch,” said Gibbs. “But what is undeniable and that you heard the president reiterate yesterday is if you look at where we were and look at how far we’ve come, we’ve not come as far as the president would like--not by a long shot--but we’re adding jobs: eight months of private sector hiring, positive economic growth. Again, all of which is going to take--this is going to take an enormous amount of time. No one in this administration ever said that this was going to be easy or that it wouldn’t take some time.”
Later in the briefing, Steven Thomma of McClatchy news asked Gibbs to specify what he meant by an “enormous mount of time.”
“On the economy,” said Thomma, “you said earlier this is going to take an 'enormous amount of time.' How long?”
“Well,” said Gibbs, “I think it’s going to take several years from--I think getting through a recession as deep as the one that we were faced with, the sheer amount of job loss, the shock to the system, shock to our financial system, the change in our housing market. We’re dealing with, in many ways, if you look at what happened and what cascaded downward all at a certain period of time, you’re dealing with sort of the perfect storm.”
Neither The New York Times nor McClatchy reported on Gibbs comments regarding the pace of the economic recovery.
At the briefing, CNSNews.com followed up with a question about the unemployment rate. “The CBO has projected that unemployment will remain above 8 percent until at least 2012,” asked CNSNews.com. “Does the administration have any kind of projections as to when it might go below 8 percent?”
“I assume in the Mid-Session Review there are some of those figures,” said Gibbs. “I don’t have those in front of me. I don’t know.”
In fact, the White House Mid-Session Review of Obama’s fiscal 2011 budget, sent to Congress by then-Office of Management and Budget Director Peter Orszag on July 23, predicted that unemployment would average 9.7 percent this year and 9.0 percent next year. At the same time, OMB predicted economic growth would be 3.2 percent this year and 3.6 percent next year.
The nonpartisan Congressional Budget Office published more bearish projections. Its August Budget and Economic Outlook predicted real GDP would grow by only 2.8 percent this year and 2.0 percent in 2011. CBO predicts the unemployment rate will be 9.5 percent this year and 9.0 percent for next year.
The CBO report also said that these GDP growth rates are lower than the rates that historically would be expected after a severe recesssion. “Such rates are well below historical norms from a recession; for example, following the deep recession of 1981 and 1982, real GDP surged by nearly 8 percent in 1983 and by 6 percent in 1984,” said CBO.
At a policy seminar in Washington, D.C., last week, CBO Director Douglas Elmendorf said the CBO also believed unemployment will remain above 8 percent until 2012.
“CBO expects that the economic recovery will proceed at a modest pace, leaving the unemployment rate above 8 percent until 2012,” said Elmendorf’s presentation.
Back on Jan. 10, 2009, before Obama took office, but when he was already pushing his stimulus proposal, Christina Romer, who had been appointed to chair the president’s Council of Economic Advisers, and Jared Bernstein, the top economic adviser to then-Vice President-elect Joe Biden, authored a report entitled, “The Job Impact of the American Recovery and Reinvestment Plan.”
“The U.S. economy has already lost nearly 2.6 million jobs since the business cycle peak in December 2007. In the absence of stimulus, the economy could lose another 3 to 4 million more,” the report said. “Thus, we are working to counter a potential total job loss of at least 5 million. As Figure 1 shows, even with the large prototypical [stimulus] package, the unemployment rate in 2010 Q4 (fourth quarter) is predicted to be approximately 7.0%, which is well below the approximately 8.8% that would result in the absence of a plan.”
Gibbs comments on the economy at Tuesday's White House briefing came after two of Obama’s top economic advisors--Romer and Orszag--had left the administration, and on the same day that National Economic Council Director Larry Summers announced he would be leaving the administration by the end of the year.